What’s Going On?

On July 31, 2025, U.S. Customs and Border Protection issued a ruling reclassifying one-kilogram and 100-ounce gold bars commonly traded formats on New York’s Comex as subject to import tariffs, rather than exempt. This effectively imposes a 39% tariff on these gold bars, dealing a serious blow to Switzerland the world’s foremost gold-refining hub, responsible for up to 70% of global refining.

Immediate Market Reactions

The announcement sparked a sharp surge in gold futures, with prices hitting a record high around $3,534/oz as trading markets braced for supply shortages and cost shocks. Some Swiss refiners and other bullion players have already paused shipments to the U.S., citing legal confusion and commercial risk.

Broader Market Impacts

1. Gold Price Volatility & Premiums

The unexpected tariff lifted Comex futures sharply above London spot prices, inflating premiums and destabilizing price convergence.

A market rush to hedge short positions could drive further volatility, as noted by economist Peter Schiff.

2. Supply Chain Disruption

The long-established triangular flow—London → Switzerland → New York (in kilo bars)—is now interrupted. Switching formats or routes could increase costs and slow delivery.

3. Strain on Switzerland’s Gold Sector

With $61.5 billion worth of gold exports to the U.S. in the prior 12 months now threatened, up to $24 billion in tariffs could apply. Swiss authorities warn the tariffs may render exports economically unviable and could imperil 7,500–15,000 jobs across related sectors.

4. Geopolitical and Market Ripples

With gold seen as a safe-haven asset amid stagflation fears and geopolitical tension, the tariffs add fuel to speculative demand. Forecasts now place gold toward $3,700–$4,000/oz by year-end. The tariffs signal heightened policy risk, possibly prompting parts of the bullion trade to shift to locations like the UAE or elsewhere.

In conclusion, the U.S. tariff on kilo gold bars is far more than trade news, it’s a strategic jolt to the global bullion market, one that may reshape refining hubs, price dynamics, and investor behavior for months to come.