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Traders and analysts are scrambling to understand the full scope and consequences of the ruling, including whether the CBP would treat larger 400-ounce bars that underpin trading in London in the same way, and what the levies for major gold-producing countries will be.
A US move to put tariffs on imports of gold bars is unleashing fresh turmoil in the bullion market, with prices spiking in New York as dealers brace for a major reordering of global trade flows.
US Customs and Border Protection has clarified that one-kilogram and 100-ounce gold bars are subject to reciprocal tariffs enacted by President Donald Trump, and are not exempted as the industry had initially understood, according to a letter from the agency seen by Bloomberg. The ruling was first reported by the Financial Times.
Gold futures in New York — which are backed by those forms of bullion — surged to a record high, as traders, analysts, and executives across the industry were left reeling. The move threatens to disrupt shipments from Switzerland and other key trading and refining hubs, including Hong Kong and London, where prices are now trading at a big discount to the US market.
Traders and analysts are scrambling to understand the full scope and consequences of the ruling, including whether the CBP would treat larger 400-ounce bars that underpin trading in London in the same way, and what the levies for major gold-producing countries will be. The potential market consequences are so profound that some questioned whether the dramatic change could be an error on the CBP’s part, and suggested it may be subject to legal challenges.
The ruling came in response to an inquiry from a refiner in Switzerland, which plays a particularly crucial role in the smooth functioning of the global market. If prices in London and New York move out of lockstep, Swiss refiners can melt down the larger bars that are traded in the UK capital so they can be delivered against US futures contracts, and vice versa.
US monthly gold imports surged to a high of 43 tons in January this year, as traders raced to ship metal to the US ahead of any possible tariffs. That compares to the average monthly production by gold refiners in the US of 22 tons last year, according to US Geological Survey data.
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Bullion traders had expected gold bars of one kilogram and 100 ounces to qualify for an exemption from Trump’s reciprocal tariffs, including the shock 39% country rate he put on Switzerland. But in the letter sent on July 31 the CBP clarified that those products are classified under customs codes covering semi-processed goods that are subject to levies.