According to The Financial Times, “The US slapped tariffs on imports of one-kilo gold bars.” According to the bombshell article published at approximately 4:30 PM ET, this information came in the form of a ruling letter dated July 31 from the US customs Border Protection agency reportedly received by a Swiss refinery following a formal request for clarification on what types of gold products if any would be exempt from tariffs.
Earlier this month Switzerland was one of the unfortunate countries to be slapped with abnormally high tariff rates. These countries are primarily smaller nations that conducted very little trade with the US economy. However, some countries are big players in certain sectors of global trade such as Switzerland, a global hub for refining of precious metals. Switzerland’s import tax into the United States was raised to 39% on Thursday and bullion is one of their primary exports to the United States.
Switzerland exported $61.5bn of gold to the US over the 12 months ending in June. That same volume would now be subject to an additional $24bn in tariff.
The article discusses the impact of a recent tariff ruling on the Swiss gold trade, highlighting the concerns raised by Christoph Wild, president of the Swiss Association of Manufacturers and Traders of Precious Metals. He indicates that the imposed gold tariff poses significant challenges in fulfilling demand for gold in the U.S. market.
Earlier this year, ahead of the implementation of President Trump's tariffs—referred to as “liberation day”—traders had preemptively increased gold imports into the U.S., resulting in a substantial accumulation of gold on the Comex exchange and a temporary shortage in the London market.
The tariff announcement, however, included exemptions for several commodities, particularly a specific classification of bullion that was understood to include large gold bars. This is crucial, given the typical triangular flow of bullion trading, where large gold bars move among London and New York markets via Switzerland, where they are resized for respective market preferences. The London market favors 400 troy ounce bars, while the New York market opts for kilo bars.
This news helped gold surge by over $50 dollars today. Gold futures closed at $3,482.70 representing a gain of $50.90 or 1.48%. As traders digest this new hurdle in the global supply chain of the worlds most valuable commodity by market cap ($23 trillion). Gold will likely continue rising on this new roadblock to the supply side of the world’s single most valuable asset with the possibility of reaching new record highs in the coming days.
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