US Tariffs on Gold Bars Drive Futures to Record High, Threaten Switzerland’s Refining Industry

US Tariffs on Gold Bars Drive Futures to Record High, Threaten Switzerland’s Refining Industry

The price of US gold futures surged to an all-time high of $3,534.10 per ounce on Friday, August 8, 2025, following a US Customs and Border Protection (CBP) ruling that imposed a 39% tariff on imports of one-kilogram and 100-ounce gold bars.

This decision, detailed in a July 31 ruling letter, has disrupted the global bullion market, particularly impacting Switzerland, the world’s leading gold refining hub, which processes approximately 70% of the global market.

The move has sparked concerns about trade disruptions, increased costs for consumers, and potential supply bottlenecks in the US gold market.

Also, the tariffs, part of a broader set of trade policies enacted by the Trump administration, target Switzerland with one of the highest import levies among developed, alongside countries like Brazil, Syria, Laos, and Myanmar.

The CBP’s ruling also clarified that one-kilogram and 100-ounce gold bars, commonly traded on the Commodity Exchange (Comex), fall under a customs code subject to duties, overturning industry expectations that these bars would remain exempt.

This reclassification has led to a significant widening of the price spread between New York futures and London spot prices, reaching over $100 per ounce, a level not seen since supply chain disruptions during the COVID-19 pandemic in 2020.

Switzerland, which exported $61.5 billion worth of gold to the US in the 12 months ending June 2025, now faces an additional $24 billion in tariffs.

These exports, primarily one-kilogram bars, constitute the bulk of Switzerland’s bullion trade with the US and have been a significant factor in the country’s trade surplus.

The Swiss precious metals association, led by president Christoph Wild, expressed concern over the tariffs’ impact on the industry, noting that they make exporting gold to the US economically unviable.

Swiss refineries, which had anticipated tariff exemptions, have spent months consulting lawyers to navigate the uncertainty, with some halting or reducing shipments to the US pending further clarity.

The surge in gold futures reflects heightened investor demand for gold as a safe-haven asset amid ongoing trade tensions and geopolitical uncertainty.

Earlier this year, gold exports from Switzerland to the US spiked to a record 193 metric tons in January 2025, driven by fears of impending tariffs. This rush contributed to a premium on Comex futures over London spot prices, as traders sought to secure physical gold in US warehouses.

Analysts suggest that the tariffs could exacerbate supply constraints, potentially driving up spot gold prices if the policy persists.

“The tariff will definitely disrupt gold trade, and Switzerland will bear the brunt of it. Premiums on physical gold will likely increase, which could lead to higher prices for consumers,” said Zain Vawda, an analyst at MarketPulse by OANDA.

Critics argue that the inclusion of gold in the tariff calculations may distort trade balance data, as Switzerland’s role in the gold market primarily involves refining rather than producing the metal.

The Swiss National Bank has contended that gold should be excluded from trade deficit calculations, as refiners earn only a small fee for processing, with most of the value derived from the gold itself.

Despite these arguments, the Trump administration has shown no willingness to reconsider, leaving Swiss President Karin Keller-Sutter empty-handed after a last-minute trip to Washington to negotiate a lower tariff rate.

The tariffs’ broader implications extend beyond gold, affecting Swiss exports like pharmaceuticals, watches, and precision instruments.

As global trade flows adjust, refineries in Asia have also paused shipments to the US, awaiting further clarity on the policy.

Meanwhile, investors are increasingly turning to physical gold stored in Swiss vaults as a ghedge against financial instability, a trend that may intensify if trade uncertainties persist.

The US gold market now faces a period of volatility, with analysts like Ole Hansen of Saxo Bank emphasizing that the London spot price remains the most reliable indicator of gold’s value amid the turmoil.

As the industry seeks clarity on the tariffs’ scope—particularly whether larger 400-ounce bars traded in London will also be affected—the global bullion market braces for potential reordering of trade flows and pricing dynamics.US Tariffs on Gold Bars Drive Futures to Record High, Threaten Switzerland’s Refining Industry

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