Gold Futures Shatter Records Amidst US Tariff Shockwave
Switzerland Hit by 39% Levy, Igniting Market Volatility
Gold prices have surged to unprecedented highs as the United States imposes a significant 39% tariff on imported 1kg gold bars. This move disproportionately impacts Switzerland, a global leader in gold refining, creating a major disruption in international trade.
US Broadens Tariff Scope
The surprise tariff, effective Thursday, follows a failed diplomatic effort by Switzerland’s president to negotiate lower rates. US Customs has now recommended extending the existing 39% tariff to gold bar imports previously operating under exemption categories. The detail was confirmed in a ruling letter dated July 31 and reviewed by the Financial Times.
Following this news, gold futures for December delivery reached an intraday record of $3,534 (£2,630) per ounce.
Swiss Industry Faces “Crippling Blow”
Christoph Wild, president of the Swiss Association of Manufacturers and Traders of Precious Metals, described the ruling as “another blow” to Swiss-US gold trade. He noted it contradicted expectations of continued tariff exemptions for the precious metal.
Switzerland refines approximately 70% of the world’s gold, processing metal from global sources into bars. Alongside pharmaceuticals, gold is a cornerstone of Swiss exports to the United States.
The established gold trade flow typically circulates between London, New York, and Switzerland, with bars frequently recast to meet market demand. Switzerland imports around 2,000 tonnes of gold annually, much of it channeled through intermediary banks.
In the twelve months leading up to June, Swiss gold exports to the US were valued at roughly $61.5 billion. This substantial trade now faces the additional 39% levy, placing Switzerland among nations with the highest tariffs, including Brazil, Syria, Laos, and Myanmar.
Safe Haven Demand Fuels Price Surge
Gold prices had already seen a notable increase of about 25% this year, driven by investors seeking refuge from global market instability caused by ongoing trade disputes. High-net-worth individuals in the US have been increasingly acquiring physical gold, with storage options available in the Swiss Alps.
Demand for gold bars in the US reportedly surged in May after previous tariff announcements, leading some retailers like Costco to limit daily purchase quantities.
Watches Also Targeted
The Swiss watch industry is expected to be significantly affected, with a $10,000 luxury watch now incurring an additional $3,900 import cost into the US.
Following an emergency cabinet meeting, Swiss President Karin Keller-Sutter stated her intention to pursue further dialogue with the US regarding the substantial tariffs. She characterized President Trump’s decision as creating an “extraordinarily difficult situation” for Swiss businesses and their employees.
Despite the new levies, Switzerland remains committed to its procurement agreements for F-35 fighter jets and Patriot missile systems from the US, according to President Keller-Sutter. “The Federal Council has repeatedly affirmed that it is sticking with the F-35,” she stated, emphasizing the necessity for national air defense capabilities.
The Swiss Federation of Technology and Innovation Companies reported in 2023 that the technology sector exported goods worth approximately $16.4 billion to the United States, underscoring the potential broad economic impact of such trade friction (State Secretariat for Economic Affairs, Switzerland 2024).
