Tariff Exemptions Ease Market Strain, But Gold Rally Persist

Gold extended its historic rally this week, printing fresh all-time highs near $3,600/oz, up roughly $150 week-on-week and now +37% year-to-date. The move came against a backdrop of mounting macro uncertainty, confirmation of tariff exemptions for bullion imports, and continued positioning for a September Federal Reserve rate cut. 

The major catalyst was Friday’s weaker-than-expected US payrolls report (22k vs. 75k forecast), which cemented expectations for at least a 25bp cut at the September FOMC, with markets beginning to price in the possibility of 50bp. Combined with a softer US PCE print, this reinforced the Powell pivot from Jackson Hole and added momentum to precious metals inflows. Futures and ETF participation surged, with thin post-holiday liquidity amplifying the price moves. 

Meanwhile, tariff risk — a major driver of volatility in 2024–25 — eased after the Trump administration clarified that gold bullion and related products would be exempt from country-based tariffs. This follows months of uncertainty after a CBP ruling suggested gold imports could be taxed, leading to elevated EFP spreads and record COMEX inventories. While the tariff exemption removes a structural tailwind, some market participants expect modest price softness as liquidity normalizes. 

The broader macro backdrop remains highly supportive. Long-term government bonds sold off sharply, particularly in Europe and the UK, amid fiscal concerns, reinforcing gold’s role as a haven as investors rotate out of fixed income. With global debt at record highs and yield curves steepening, gold continues to attract capital as a hedge against fiscal dominance, policy uncertainty, and systemic fragility.