Gold prices tumbled Monday as investors awaited clarity from the White House on potential bullion tariffs, erasing gains from last week's rally and rattling precious metals markets.
December gold futures dropped $80.50 to $3,410.80 in early U.S. trading, while spot gold slid 1.4% to $3,350.94 an ounce. September silver futures fell $0.682 to $37.865, with platinum down 2% to $1,307.70 and palladium off 0.2% to $1,123.43.
The selloff followed Friday's surge, when December futures briefly hit a record $3,534.10 amid reports the U.S. had imposed tariffs on imports of 1 kg bullion bars. The White House later said it would issue an executive order clarifying its position. "Spot gold is tumbling, along with futures, as markets unwind the initial shock from U.S. tariffs potentially plunging bullion flows into chaos," said Han Tan, chief market analyst at Nemo.Money.
Gold has been exempt from U.S. duties since April, but traders remain on edge until the administration's stance is formalized. "We see the various segments of the gold markets behaving in an orderly manner as the industry awaits this potential clarification," Joseph Cavatoni, senior market strategist for North America at the World Gold Council, wrote in a note.
The uncertainty comes ahead of Tuesday's U.S. consumer price index release, with tariffs expected to lift core inflation by 0.3%, pushing the annual rate to 3%, well above the Federal Reserve's 2% target. A softer-than-expected CPI reading could bolster expectations for interest rate cuts by year-end, which typically benefit non-yielding assets like gold. "Lower than expected CPI prints that bolster bets for Fed rate cuts by year-end may restore spot gold above the psychological $3,400 level," Tan said.
Markets are currently pricing in a nearly 90% chance of a September Fed rate cut, with at least one more reduction anticipated before December. U.S. economic data is otherwise light this week, and outside markets showed the dollar index slightly higher, Nymex crude oil steady near $64 a barrel, and the 10-year Treasury yield at 4.26%.
Geopolitical developments may also influence safe-haven demand. The deadline for a U.S.-China tariff deal, set to expire Tuesday, is expected to be extended. Meanwhile, President Donald Trump is scheduled to meet Russian President Vladimir Putin in Alaska on Friday to discuss ending the war in Ukraine. "Rising expectations of a peace deal between Ukraine and Russia, negotiated by Trump, have reduced some safe haven demand (for gold)," SP Angel analyst John Meyer said.
Technically, December gold futures still hold a near-term bullish advantage, with resistance at $3,450.00 and $3,466.30, and support at $3,400.00 and $3,350.00. September silver futures have resistance at $38.56 and $38.875, with support at $37.65 and $37.50.
