Volkswacht Bodensee - Gold futures hit record on US tariff shock, stocks wobble

Oil prices stabilised after declining the previous day on news of a meeting between Trump and Russian leader Vladimir Putin in coming weeks, which raised hopes of a truce with Ukraine.

Gold futures reached a new intraday high at $3,534.10 an ounce after the Financial Times reported that Washington would put tariffs on one-kilo bars, the most traded type of bullion on Comex -- the world's biggest futures market.

It also makes up the largest part of Switzerland's gold shipments to the United States. The FT said 100-ounce bars would also face tolls.

The levy caused "shock and confusion" in markets, said Han Tan, chief market analyst at Nemo.money trading group.

The gold future price pulled back to $3,487.15 an ounce as Wall Street opened for trading.

Spot gold prices sat around $3,400 an ounce.

Saxo Bank analyst Ole Hansen said banks invest in gold futures to protect themselves from price swings in the physical bullion market.

As tariffs threaten to raise prices for physical gold, these "short positions originally intended as hedges suddenly blow up", prompting banks to buy back futures and driving prices higher.

Wall Street stocks opened higher, a day after the tech-heavy Nasdaq finished at a fresh record but both the Dow and S&P 500 failed to hold onto early gains.

EToro US Investment Analyst, Bret Kenwell said "sentiment has been turning more bearish over the last several weeks" despite the S&P being within striking distance of its all-time high.

While part of that can be put down to the latest data suggesting US economic growth is slowing and Trump tariff drama, Kenwell said that it is also normal for investors to catch their breath after a rally that has seen the S&P 500 rise more than 30 percent from April lows.

And while US companies have largely been beating earnings expectations, trading volumes are also traditionally lower in August, he pointed out.

In afternoon European trading, both London's FTSE 100 and Frankfurt dipped while Paris stocks edged higher.

Japanese stocks led the way on a mostly negative day for Asian markets, fuelled by relief that Tokyo and Washington had settled a tariff issue that raised concerns about their trade deal.

"Since the tariff agreement between the US and the European Union, some clarity has emerged, but confusion around its implementation is just beginning to surface," said Jochen Stanzl, chief market analyst at CMC Markets.

"In Japan, there is relief today upon hearing that the various tariffs will not be cumulative," he added.

The Nikkei 225 stocks index jumped nearly two percent after Japan's tariffs envoy said that Washington is expected to revise an executive order that stacked tariffs on top of each other.

"However, it remains unclear whether the same rules apply for Japan and the EU," Stanzl added.

- Key figures at around 1330 GMT -

New York - Dow: UP 0.3 percent at 44,091.47 points

New York - S&P 500: UP 0.3 percent at 6,360.02

New York - Nasdaq Composite: UP 0.4 percent at 21,316.37

London - FTSE 100: DOWN 0.1 percent at 9,091.44

Paris - CAC 40: UP 0.1 percent at 7,720.04

Frankfurt - DAX: DOWN 0.2 percent at 24,150.14

Tokyo - Nikkei 225: UP 1.9 percent at 41,820.48 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 24,858.82 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,635.13 (close)

Pound/dollar: DOWN at $1.3437 from $1.3445 on Thursday

Euro/dollar: DOWN at $1.1651 from $1.1665

Dollar/yen: UP at 147.75 yen from 147.07 yen

Euro/pound: DOWN at 86.70 pence from 86.76 pence

Brent North Sea Crude: UP 0.3 percent at $66.62 per barrel

West Texas Intermediate: UP less than 0.1 percent at $63.94 per barrel

burs-rl/lth

M.Schneider--VB