Gold bars hit by U.S. duties. Futures soared to a new record high

The US imposed duties on kilogram and 100-ounce gold bars, which caused a price shock in the market: futures in New York soared to records, and the gap with spot prices for the precious metal exceeded $100 per ounce. The decision is especially painful for Switzerland, the largest supplier of gold to the U.S., hit by the 39% rate. Players fear supply disruptions, rising prices and undermining the role of New York as the world's largest futures market for the precious metal. The industry does not rule out that the abrupt change in policy may be due to a mistake by customs officials and will be challenged in court.

Gold bars weighing 1 kilogram and 100 ounces are subject to Donald Trump's mirrored trade duties, says a letter from U.S. Customs and Border Protection (CBP). Previously, market participants believed these forms of bullion would be exempt from trade fees, writes Bloomberg. But in a July 31 letter sent in response to a Swiss refiner's request, CBP confirmed otherwise.

Against this backdrop, U.S. December gold futures rose by more than 1% to $3534.1 an ounce, a new intraday record, notes the Financial Times. Spot gold prices, on the other hand, fell 0.2% to $3388 an ounce. The gap between futures and spot prices exceeded $100 an ounce - the kind of divergence the gold market last saw in 2020, during the COVID-19 pandemic, when disruptions in transatlantic logistics led to a similar price imbalance, writes Reuters.

The duties on the precious metal pose a risk of serious disruptions in shipments from Switzerland, Hong Kong and London - key centers of global gold trading and processing - where prices are now noticeably behind the U.S. prices. Bullion in this format makes up the bulk of shipments to the U.S. from Switzerland, for which Trump has imposed the highest duty among developed countries at 39%. Exports of precious metals have become a flashpoint in trade talks between the countries after a surge in shipments earlier this year caused the U.S. trade deficit with Switzerland to spike.

"The introduction of this duty will inevitably hit the global gold trade, and the main blow will fall on Switzerland," said MarketPulse analyst Zain Wawda (quoted by Reuters). Bullion premiums are likely to rise, he said. "In addition, there may be supply disruptions that could further push up spot prices," he added.

"Demand for safe-haven assets is likely to continue to rise amid increasing uncertainty surrounding U.S. gold supply," said Bob Haberkorn, senior market strategist at RJO Futures (quoted by Reuters). According to him, until the Trump administration clarifies the details of the 39 percent duty on kilogram bars, quotes will remain at elevated levels - especially ahead of the weekend.

In addition, it is the kilogram and 100-ounce bars that account for the main deliveries under contracts on the Comex exchange - the largest gold futures market in the world. Against this backdrop, the new duties jeopardize New York's role as the world's largest gold futures market as they drive up the price of the metal in the U.S. relative to other regions. "This creates a problem for the global gold market, which uses Comex futures to hedge positions," UBS strategist Joni Teves told the FT. - The question arises whether alternative ways of executing these futures contracts - be it other types of product or other venues - or whether other centers will become more important.

Specialists do not yet understand whether the new interpretation of duties will affect 400-ounce bars, which are actively used in London, and what rates will be applied to the main gold-supplying countries, Bloomberg specifies. The scale of possible consequences is so large that some industry participants question whether this was a misinterpretation on the part of CBP and do not rule out appealing such a decision in court. "We never thought that gold in bullion would fall under the duties - after all, it circulates between central banks and reserves around the world," said former JPMorgan trader Robert Gottlieb in a Bloomberg statement.

A number of major refineries in Asia have already suspended gold shipments to the U.S. while waiting for clarification on the new duties, Bloomberg emphasizes. If 400-ounce bars do not fall under the tariffs, they could theoretically be sent to the U.S. and melted into kilogram bars - but, as experts note, such workarounds are limited by processing capacity in the country and could undermine the sustainability of supplies under CME contracts.

Such a scenario would make CME futures contracts unviable, said Nikos Kavalisa, managing director of consultancy Metals Focus. "The gap between spot and futures would be vulnerable to logistical and production constraints. I don't think it's in anyone's interest," Kavalis said in a Bloomberg statement. - Most likely, it's either a misunderstanding or a mistake on the part of customs authorities. And if not a mistake, it's at least an extremely unfortunate decision. I think it will be challenged in court or will be the subject of active lobbying."

This article was AI-translated and verified by a human editor