Shock as US introduce tariffs on gold imports

Markets have been shocked by news that the US has introduced tariffs on gold imports of certain products, with large potential implications for the gold market.

The Financial Times on Thursday reported that a letter from the Customs Border Protection agency stated that 1 kilo and 100oz gold bars would be subject to a higher tariff code. The move in particular seems to target Switzerland which was hit with 39% tariffs this week and is a huge exporter of gold bars of this size for the COMEX in the US.

Gold has seen volatile trading on the news, with spot price pushing above $3,400 per ounce today, a key resistance point in recent weeks, before pulling back. Futures prices however have traded at a significant premium of around $100, hitting a new all-time high of $3,534.20 earlier before similarly dropping back below $3,500.

The introduction of tariffs has caught markets off guard, and analysts are warning that it could significantly impact the gold market in the near-term. A short-squeeze on the gold futures market could cause the gold price to climb quickly as traders look to unwind their positions early, while physical supply could become tight if imports slow down due to the new tariffs.

Clarification is being sought to ensure that the tariff application by the CBP is correct, but if so then further price gains are likely in the coming days as markets react to the full picture. Silver is also expected to benefit somewhat, both from the general gains in gold, but also from traders potentially pivoting out of gold to silver which still appears to be exempt from tariffs.

If futures prices have temporarily decoupled from spot then they may settle back down in the week ahead, but it is possible spot price will begin to climb today and next week, moving back towards the all-time high of $3,501.27. With the 39% Swiss tariff gold would be over $4,700 per ounce based on the current spot price, a significant premium over the rest of the world that few in the US would be willing to pay.

The precious metals market will now be eagerly awaiting further clarity on this - whether tariffs were incorrectly applied, and whether other products like the Good Delivery 400oz gold bars might also be included. Price volatility is likely to continue in trading today however as traders continue to react to the initial news.