Rising gold prices attributed to Trump's unconventional trade strategy.
In the world of finance, the gold market has been a subject of interest, particularly in London where prices remained relatively stable. However, across the Atlantic, events unfolding in the U.S. have shaken up the gold trade, causing market disruptions and heightened trade tensions between the U.S. and Switzerland.
The gold trade between Switzerland and the U.S. has historically been significant, with last year seeing an export of gold worth 61.5 billion dollars from Switzerland to the U.S. This year, the gold trade has taken a turn, with the Trump administration initially exempting gold from tariffs on Swiss imports but later imposing a steep 39% tariff specifically on certain Swiss gold products, such as 1kg and 1-ounce gold bars, in 2025.
The proposed tariffs, if implemented, would significantly impact these exports, imposing substantial duties of around 24 billion dollars. The gold industry and the physical gold trade with the U.S. are a cause for concern for Swiss exporters. Reports from The Financial Times suggest that the U.S. is planning tariffs on gold bars, a move that could reshape global gold trade dynamics, including prices, reserve holdings, and refining strategies.
Switzerland, being the world's largest gold refining hub, processes over two thousand tons of gold per year, often sourced globally and re-exported. The tariff risks disrupting established reserves and trade flows, with gold futures spiking upon announcement of the tariff and then dropping after Trump temporarily reversed it on social media. Swiss refiners claim their profits from refining are relatively small fees on a large volume of high-value gold, arguing the tariff unfairly targets the value of gold itself rather than Swiss-added value.
The dispute highlights Switzerland’s economic vulnerability due to its heavy reliance on exports, including gold refining, which forms a large part of its trade surplus with the U.S. The rise in gold prices in New York, which reached over 3,530 dollars at times, can be attributed to the possible new U.S. tariffs on gold imports.
As the gold trade becomes a political topic, particularly under the Trump administration, it is crucial to monitor these developments closely. The gold market, once a symbol of stability, is now a reflection of the geopolitical and economic tensions between nations, underscoring the interconnectedness of global trade relations and their noticeable effects on markets.
- The proposed tariffs on Swiss gold exports by the U.S., if implemented, could result in substantial financial implications, amounting to around 24 billion dollars in duties.
- The U.S.'s potential tariffs on gold bars could significantly reshape global gold trade dynamics, influencing prices, reserve holdings, and refining strategies, as reported by The Financial Times.
