Gold futures in the United States surged to a record high on Friday after confirmation that country-specific import tariffs may apply to the most widely traded bullion size, the one-kilogram bar. The ruling, posted by the US Customs and Border Protection (CBP), classifies these bars under a category subject to tariffs, raising concerns over disruptions to global gold supply chains. The development places New York, one of the three key global pricing venues alongside London and Shanghai, at a steep price premium compared to other markets.
The move has particularly sharp implications for Switzerland, the world’s largest gold refining hub. Swiss refiners play a pivotal role in balancing prices between London and New York, often melting larger 400-ounce bars traded in London into one-kilogram sizes deliverable against US futures contracts. If tariffs remain, this arbitrage could be curtailed, potentially distorting pricing relationships between the two major markets.
US tariff ruling disrupts gold trade and price parity
Traders and refiners in Switzerland and Asia have already paused shipments to the US while awaiting clarity on the tariff’s scope. The Swiss Precious Metals Association has warned that the measure risks impairing the international flow of physical gold. Christoph Wild, its president, stressed that the US has been a longstanding partner for Switzerland’s bullion exports, which are now directly threatened. Switzerland’s President Karin Keller-Sutter traveled to Washington this week in a bid to persuade the White House to reverse the tariff but returned without securing a meeting with President Donald Trump.
On the Comex exchange, December gold futures rose 1.2% to $3,494.10 per ounce after briefly touching $3,534.10, their highest level on record. The premium over London spot prices exceeded $100 per ounce, a gap analysts say reflects both logistical uncertainty and the potential for prolonged supply constraints. Spot gold was little changed at $3,394.26 per ounce but remained up nearly 1% for the week. The US gold refining industry has limited capacity, producing an average of 22 tons a month last year, compared to imports that peaked at 43 tons in January.
Investors weigh long-term risks to New York gold market
Analysts warn that if the 400-ounce bars commonly traded in London are not subject to tariffs, they could still be shipped to the US for recasting into one-kilogram units. However, they note that this would strain domestic capacity and could make the Comex contract less viable. The tariff uncertainty has led to heightened investor activity and widened arbitrage opportunities for non-US refining hubs. While the US government has not commented on whether the ruling will be reversed or modified, industry groups are preparing to lobby against it, viewing it as either an administrative error or a policy miscalculation with potentially long-lasting effects on the global gold trade. – By Content Syndication Services.