By Barbara Kollmeyer
Swiss gold refiners were already under pressure
Is the Trump administration ready to slap gold bars with a tariff. The industry is on the edge.
Gold futures prices soared early Friday on a report the U.S. has ruled that gold bars would be subject to tariffs.
On a continuous basis, gold futures (GC00) jumped $40.40, or 1.1%, to $3,494.40 an ounce, reaching an intraday high of $3,534.20, which takes out the previous April 22 intraday record of $3,509.90 an ounce. The futures price could indicate a new record close to eclipse $3,452.80 reached on June 13.
Sending prices surging, the Financial Times reported that it saw a July 31 letter from the Customs Border Protection Agency stating that one-kilo and 100-ounce gold bars should be classified under a customs code that subjects them to tariffs.
One-kilo bars are commonly traded on Comex, the metals futures marketplace used for hedging and speculation that sets prices globally for precious metals.
“It’s worth noting that the U.S. futures market is often used by bullion banks globally as a highly liquid, round-the-clock hedging tool for transactions in the physical bullion market,” Ole Hansen, head of commodity strategy at Saxo Bank, said in comments shared with MarketWatch.
Short positions originally intended as hedges suddenly blow up, he said.
Among those who short gold are gold producers themselves, who try to lock in a profit between what they mine and when it can be sold.
One-kilo gold bars also comprise the bulk of Switzerland’s country’s gold exports to the U.S. President Donald Trump recently hit the country with higher-than-expected 39% tariffs that the Swiss government has been trying to ratchet down.
“The decision disrupts the established global trade flow, which traditionally involves large bars moving between London, Switzerland, and the U.S.,” said Neil Welsh, head of metals at multiasset brokerage Britannia Global Markets, in a note. “The reclassification means that Swiss refiners and exporters will face higher costs, potentially reducing their export volumes to the U.S. and increasing market uncertainty. Several refiners have already responded by halting or reducing shipments amid the confusion over tariff classifications.”
Bullion was expected by many in the industry to be exempt from tariffs based on the April 2 tariff rollouts, in which the White House said bullion wouldn’t be subject to reciprocal tariffs.
Hansen said similar gold-market dislocations were seen during the COVID outbreak as the trans-Atlantic chain for bullion – chiefly between New York and London – stalled. “For now, it’s worth watching whether another ‘TACO moment’ will emerge. If not, the spread may need to settle at a new level that reflects the tariff landscape,” he said. TACO is an acronym for Trump Always Chickens Out, a market expression for when the president backs down from a threat.
He said much like recent events for the New York copper market, “these developments raise serious questions about the ability of the NY futures markets to offer a stable and trustworthy trading environment that offers the best price discovery-one that increasingly appears vulnerable to being hijacked by Trump’s shifting tariff agenda.”
Besides tariffs, gold prices are being supported by prospects for Federal Reserve easing, and fears of U.S. stagflation, plus continued robust physical demand from China, he said. Over the long run, if the U.S. wants to slap tariffs on gold, it remains to be seen if other centers could step up as alternatives, said Hansen.
-Barbara Kollmeyer
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08-08-25 0515ET
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