Gold Dips 2% as White House Clarifies Gold Tariff Rules

Gold prices experienced a sharp pullback to $3,463 from a record high of $3,530 following an announcement from the White House about potential changes to bullion tariff rules [1]. The move came after a White House official told CNBC that an executive order was expected to clarify misinformation regarding tariffs on gold bars and specialty products [1]. This development introduced uncertainty into the market, prompting traders to reassess risk and liquidity exposure.

The Swiss Precious Metals Association (SPMA) raised concerns that U.S. tariffs on gold bars could disrupt the international flow of physical gold, especially given Switzerland’s dominant role as a global refiner [1]. The association emphasized that the clarification did not apply exclusively to Swiss exports, but rather to all 1kg and 100oz gold bars imported into the U.S. from any country [1]. This detail is critical for market participants, as a significant portion of gold delivered in New York originates from Swiss refineries.

President Donald Trump’s 39% tariff on Swiss exports to the U.S. has already created friction, and the recent clarification from U.S. Customs and Border Protection that 1kg and 100oz bars are not excluded from the tariff has added to the market’s unease [1]. UBS analyst Joni Teves noted that tariffs complicate the logistics of physical delivery for futures contracts, particularly when most refining capacity is concentrated in Switzerland [1]. With additional costs introduced, the traditional mechanisms for hedging and settling positions become less efficient.

The market’s nervousness is reflected in the growing premium for gold in New York relative to London. On August 8, gold prices briefly jumped about 1%, suggesting that some desks were betting the tariff policy might shift [1]. However, the premium soon receded, highlighting the lack of confidence in a stable regulatory environment. Ole Hansen of Saxo Bank pointed out that the evolving tariff agenda could undermine the reliability of U.S. futures markets in providing price discovery [1].

Rob Haworth from U.S. Bank’s Asset Management Group echoed these concerns, emphasizing that the market is still seeking clarity on whether the current rules reflect the intended policy. Traders are reluctant to carry forward contracts with uncertain delivery costs, particularly in the context of a U.S. tariff structure that disproportionately affects physical gold imports [1].

The implications extend beyond New York. If the tariff rules remain unchanged, global flows of gold may shift, and the U.S. could lose its competitive edge in the global gold trade. Higher import costs would affect not just institutional hedgers but also retail investors, as tariffs ripple through jewelry, coinage, and bullion markets [1].

For now, the White House is expected to issue an executive order to clarify the situation, while the market remains on edge. Gold has risen 31% year-to-date amid trade and geopolitical tensions, and while tariffs could push prices higher on paper, they also threaten to strain the physical supply chains that support the global gold market [1].

Source: [1]Gold fell to $3,463 after hitting a record $3,530 as the White House announced plans to clarify bullion tariff rules (https://coinmarketcap.com/community/articles/68966c5355ec7778c0d492b4/)