Gold closed strongly on Thursday, rising 0.81% to touch levels above the $3,400 mark intraday, and then settled near the $3,396 level.
Prices traded relatively flat during Friday’s Asian session.
Gold futures in NYC indicated a record high spread over the London spot prices, after the US announced fresh tariffs on gold imports.
The Customs and Border Protection agency announced that one-kilo and 100-ounce gold bars should be classified under a customs code subject to levies, rather than in a tariff-free category. Notably, these are deliverable against the majority of contracts traded on the Comex in New York. The spread between NYC gold futures and London gold spot surged to $102, from $6 on July 21.
This spread represents a record high level and indicates that traders are fearing a shortage of gold bars for delivery in the New York City futures.
This generally suggests that traders in NYC who deal with one-kilo bars are placing aggressive bets to get delivery of gold, leading to price increases as the tariffs would increase physical delivery of gold. Gold is considered a haven during uncertain times, which supports its price during periods like these, maintaining its trend intact.
Technically, prices have continued their uptrend, albeit in a choppy market influenced by macroeconomic factors. On the 4-hour charts, prices seem to have retested a breakout from the $3,385 level, rising to about $3,400 thereafter. This support level also appeared to coincide with the 9-SMA level, along with a strong RSI on the same timeframe, suggesting a bullish market structure in the short term.
A decisive move above yesterday’s high of $3,409 could unlock further gains in bullion prices, potentially to the $3,433 - $3,438 range, from the highs reached in late July. On the downside, the 9-SMA on the 4-hour chart near the $3,386 level remains an immediate support.
Gold prices in the UAE are as follows:
24 Carat – RO43.00
22 Carat – RO 40.20
18 Carat – RO 31.80
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