Here's why Gold futures saw a sharp surge to a record high on Friday

Gold futures in New York surged to a record high in early Asian trading on Friday, August 8, after a report from the Financial Times indicated that the imports of one-kilogram bullion bars are now subject to US tariffs.

Contracts for the December delivery surged to trade at a premium of over $102 per ounce over the spot prices, before easing to around $96 an ounce compared to the London benchmark.

According to the US Customs Border Protection letter, accessed by the Financial Times, one-kilo and 100-ounce gold bars, which are deliverable against most contracts traded on the Comex, should be classified under a customs code subject to levies.

Gold was exempted from any tariffs back in April when US President Donald Trump had announced sweeping tariffs across multiple countries and later on other commodities as well.

A major arbitrage trade had ended in April after that announcement, which had pulled nearly 850 tons of metal into New York warehouses as traders raced to capitalize on large price dislocations, with US premium suddenly collapsing following the announcement.

Gold for December delivery traded 1.2% higher at $3,495.5 an ounce.

(With Inputs From Agencies.)