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    Trump clarifies that gold won’t face tariffs, clearing up previous confusion over misleading information.

    by VT Markets
    /
    Aug 11, 2025
    Gold prices on the Comex have dropped by $86.50, a decrease of 2.47%, now trading at $3,405. There was confusion about a proposed tariff, which added to market uncertainty.

    Trump’s Clarification

    In a short post on Truth Social, Trump cleared things up by stating, “gold will not be tariffed.” This suggests earlier news reports may have misunderstood the details. The sharp decline in gold prices is a direct response to the removal of a significant risk premium that had built up over the week. Last week, implied volatility, as measured by the Cboe Gold ETF Volatility Index (GVZ), soared above 25, but is now falling. Traders may find it wise to sell high-cost options, like covered calls, to earn premium as the market stabilizes. We expect additional selling pressure as speculators who bought based on the tariff rumor now need to sell off their positions. The most recent Commitment of Traders report showed a big rise in long contracts held by managed money, leading to a crowded trade. This unwinding could drive prices down toward the next support level near $3,350 in upcoming sessions.

    Market Strategies

    Traders might want to buy put options to safeguard against this possible decline, particularly after failing to maintain the $3,500 level. Gold had an extraordinary rise from above $2,400 in 2024, and this downturn indicates the market is prone to corrections. If prices fall below $3,400, the downward trend could gain speed. With the tariff issue settled, the focus will return to bigger economic factors, such as the U.S. dollar and Federal Reserve policies. The U.S. Dollar Index (DXY) has risen towards 106, creating a headwind for gold. The current key focus is on inflation data and the chances of an interest rate cut, with fed funds futures suggesting a 40% chance of a cut by the November meeting. Create your live VT Markets account and start trading now.

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