Trump's tariffs send gold prices soaring beyond $3,400, latest victim of trade tensions
The recent imposition of U.S. tariffs on Swiss gold exports, including large gold bars weighing around one kilogram and 100 ounces, has caused significant disruption in Swiss gold refining exports to the U.S. and resulted in volatility in global gold prices.
The tariffs, part of Trump's reciprocal tariff policy applying a 39% levy on Swiss imports effective August 2025, have caught markets off guard, as gold was previously expected to remain exempt.
Key impacts of these tariffs include a sharp decline in Swiss gold exports to the U.S., market turmoil, and record high gold futures prices. In the first quarter of 2025, Swiss gold exports to the U.S. were about 37.6 billion Swiss francs but plummeted to roughly 1.6 billion francs after the tariff announcement. New York gold futures, which are largely physically settled with Swiss-refined bars, surged to record highs due to the tariff-induced uncertainty and supply concerns.
The U.S. Customs initially created uncertainty by classifying specific gold bars as tariff-subject commodities, despite exemptions for bullion being previously anticipated. This confusion caused some Swiss refiners to reduce or halt exports temporarily.
Despite these developments, the impact of the tariffs has not been directly felt in the UAE markets yet. However, there is a potential for an increase in gold prices, with the price of gold in Dubai reaching Dh378.75 per gram of 22K, the highest since July 21.
It is important to note that traders in the UAE gold markets can still import gold from Switzerland without facing any of the tariffs, according to market sources. However, the tariff could potentially impact the supply of gold to UAE markets, affecting gold shoppers.
The U.S. President's tariffs are affecting gold prices, particularly impacting Swiss exports of 1-kilo gold bars to the U.S. Switzerland is a significant center for global gold trade, processing around 70% of the world's unrefined gold annually. Major refiners like Valcambi, PAMP, and Metalor are based in Switzerland, supplying bullion to banks, ETFs, and central banks worldwide.
The situation remains uncertain and is being closely watched by the market. A Dubai-based gold retailer stated that the best hope is for a trade deal between Switzerland and the U.S. to normalize the situation. The White House has signaled intent to clarify the tariff situation soon, potentially offering exemptions or adjustments, which could moderate market disruption and ease Swiss exporters’ challenges.
In summary, the U.S. tariffs on Swiss gold exports have compressed Swiss gold refining export volumes to the U.S., triggered record highs and volatility in global gold futures prices, and heightened tensions around trade classification and tariff policy. The tariffs reflect U.S. concerns over trade deficits magnified by high-value gold processing, despite Swiss refiners’ limited profit margins from processing activities.
- Given the volatility in global gold prices and the record high gold futures prices, there might be significant ramifications for the finance sector, particularly in terms of investments related to gold.
- The tariffs imposed on Swiss gold exports have raised concerns in the business world, as they could potentially affect the supply chain of movies, where gold is often used in props and sets.
