Gold tariff shocks markets

Another day, another surprise tariff.

The Trump administration blindsided traders this morning by confirming that one-kilo and 100 oz gold bars are subject to tariffs. The news shocked gold investors who had been working under the assumption that bullion would be exempt from the retaliatory tariffs that kicked in yesterday. Gold futures subsequently skyrocketed first thing this morning to yet another record high.

The deets: In response to an inquiry from a gold refiner in Switzerland, US Customs and Border Protection ruled that gold bars imported from Switzerland will be taxed at the country’s tariff rate, which is now one of the highest at 39%. The implication is that gold bars imported to the US from anywhere in the world will also be subject to each origin country’s tariff rate—though the White House has yet to clarify whether or not that will be the case.

This ruling could upend the gold trade, because the market uses physical gold to back its futures market and hedge positions. Gold bars undergird huge swathes of the financial system, particularly central banks, which keep large repositories of the precious metal in order to stabilize their economies. Switzerland in particular is a major international hub for that trade, and is the largest gold refiner in the world, and its extremely high tariff rate puts the entire gold futures market at risk.

The ruling is already having knock-on effects: Bloomberg reported that international gold shipments have been frozen around the world today.

What a year

Even before today’s announcement, the safe haven asset has had plenty of reasons to extend its record run in 2025.

Economic data recently revealed a weaker economy than previously thought, massive tariffs are about to shake up the global economy, the future of the Fed’s independence is currently in limbo, and geopolitical turmoil shows no signs of slowing down. All of that explains why the metal has surged 32.60% this year, on top of its roughly 27% gain last year.

“Should economic and financial conditions deteriorate, exacerbating stagflationary pressures and geoeconomic tensions, safe haven demand could significantly increase pushing gold 10% to 15% higher from here,” wrote the World Gold Council in its mid-year research report last month. “On the flipside, widespread and sustained conflict resolution – something that appears unlikely in the current environment – would see gold give back 12% to 17% of this year’s gains.”

Keep in mind: “The White House intends to issue an executive order in the near future clarifying misinformation about the tariffing of gold bars and other speciality products,” an anonymous White House official told multiple outlets late this afternoon. Gold prices tumbled from their record highs on the news, though it remained up 0.06% through market close—its 26th record close for the year.—LB