Gold was tossed back and forth on rumors that the White House would impose import tariffs on the precious metal. First, the U.S. Customs and Border Protection demanded that Switzerland pay for bullion shipments to the United States at the country's universal tariff rate of 39%. Then, U.S. administration officials privately told Bloomberg there would be no gold tariffs. Finally, Donald Trump put an end to the speculation, confirming that the precious metal would not be subject to tariffs.

What was this? Misinformation, as the White House claims? Negligence by the Customs and Border Protection? Or perhaps someone made a good profit on these XAU/USD "roller coasters." After rumors about gold import tariffs, the premium between New York and London surged above $100 per ounce, only to collapse to $60 following Trump's social media comments denying the introduction of tariffs.

Gold premium dynamics between New York and London

The absence of tariffs deprived gold of an important bullish driver. XAU/USD quotes have been unable to break out of the medium-term consolidation range of 3250–3400, where they have spent most of their time since April. Still, it is too early to speak of a collapse.

Investors saw the lack of acceleration in consumer prices in July as evidence that the Federal Reserve will ease monetary policy in September. The futures market has increased the probability of such an outcome to over 90% and is pricing in more than a 50% chance that the central bank will take three steps toward monetary expansion by the end of the year.

U.S. inflation dynamics

As a result, the U.S. dollar weakened against major world currencies, and Treasury yields declined. This created an ideal backdrop for XAU/USD. Gold does not generate interest income, so it cannot compete with debt securities when their yields rise. Since the precious metal is priced in U.S. dollars, a rally in the USD index becomes a headwind. When Treasury yields fall and the greenback heads lower, gold thrives.

Markets are increasingly convinced that the White House intends to devalue the U.S. dollar. To achieve this, Jerome Powell is being pressured, and the FOMC composition is being reshaped according to Donald Trump's preferences. The president has expanded the list of candidates for Fed chair in order to summon them and discuss rate cuts. Something similar happened with Michelle Bowman, who subsequently shifted from a "hawk" to a "dove."

From a technical standpoint, the daily gold chart shows another false breakout above the upper boundary of the medium-term consolidation range of 3250–3400 dollars per ounce. Bulls found support near the fair value of 3350 dollars and counterattacked. As long as the precious metal trades above this level, the focus should remain on buying.