Gold Prices Ease After Trump Announces No Tariffs on Bars

Strategic Insights -

The price of gold has stabilised following a tumultuous week, sparked by concerns over US tariffs on bullion exports. US President Donald Trump's announcement that gold would not be tariffed has alleviated investor uncertainty, causing futures to drop 2.4% to $3,407 per ounce. The decision has significant implications for Switzerland, which dominates the global bullion market, with $36bn of exports making up over two-thirds of the country's trade surplus with the US in the first quarter.

Key Takeaways:

  • The price of gold futures dropped 2.4% to $3,407 per ounce after Trump's announcement on Monday.
  • The Swiss Association of Precious Metals Producers and Traders welcomed Trump's statement but called for a "formal" decision to provide certainty for the gold sector.
  • Ross Norman, chief executive of Metals Daily, stated that the crisis was averted, bringing relief to the bullion markets, as the potential for disruption was "incalculable."
  • Gold bullion investment is a significant market in the US, where customers can buy gold in supermarkets, including Costco, at a cost of approximately £89,000 for a kilo bar and £2,500 for a one-ounce coin.
  • The Swiss Association of Precious Metals Producers and Traders (ASFCMP) estimates that two-thirds of Switzerland's trade surplus with the US is derived from gold exports.
  • The US Customs and Border Protection initially stated that 1kg and 100-ounce cast bars were not exempt from tariffs, sparking investor uncertainty.
  • The White House is preparing an executive order to clarify misinformation about tariffs on gold bars and other products.

Statistics:

  • The price of gold futures dropped 2.4% to $3,407 per ounce after Trump's announcement.
  • The Swiss Association of Precious Metals Producers and Traders (ASFCMP) welcomed Trump's statement, stating it was an "encouraging signal for trade stability."
  • The US gold futures premium over spot gold fell 1.2% to $50.
  • The cost of a kilo bar is approximately £89,000.
  • The cost of a one-ounce coin is approximately £2,500.
  • The ASFCMP estimates that two-thirds of Switzerland's trade surplus with the US is derived from gold exports, valuing at $36bn.

Sources:

  • Reuters
  • Swiss customs data
  • Swiss Association of Precious Metals Producers and Traders (ASFCMP)
  • Metals Daily
  • White House