Gold prices experienced a dramatic pullback on Monday as President Donald Trump reassured markets that gold imports would not be subject to tariffs. The president’s clarification followed a wave of uncertainty triggered by an earlier U.S. Customs ruling that had the potential to impose substantial tariffs on 1-kilogram and 100-ounce gold bars imported from Switzerland.
📉 Gold Prices Reverse After Tariff Scare
The turmoil started when the U.S. Customs and Border Protection announced that Swiss gold imports would be subject to a 39% tariff, sparking widespread concern over the future of the global gold trade. This ruling sent gold futures soaring to new all-time highs, as traders priced in the possibility of higher import costs.
However, the rally was short-lived. Later in the day, President Trump clarified via social media that gold would not face tariffs, prompting a sharp selloff in the gold market. By 5:10 PM ET, gold was trading at $3,393.70 per ounce, down $64.50 or 1.87% from earlier highs.
🔄 Extreme Market Volatility
The market reaction was swift and volatile, with a sharp reversal in gold prices and a whipsaw price action that created a Doji candlestick pattern on 15-minute charts. During one of the most active periods, gold futures experienced a dramatic $55 price range within just 15 minutes, reflecting the uncertainty and rapid adjustment as market participants processed the tariff clarification.
🏛 A History of Policy Impact on Gold
This latest tariff episode mirrors previous policy moves from the Trump administration, notably in April, when gold was exempted from tariffs during a policy shift dubbed ‘Liberation Day’. At that time, gold spot prices dropped by $100, and the premium gap between New York Comex futures and London bullion collapsed, as expectations of import duties were temporarily lifted.
These policy fluctuations have had lasting impacts on physical gold storage patterns, with Comex-approved U.S. warehouses seeing a 14% drop in gold stockpiles since April, although over 70% of the year’s opening inventory remains in storage, indicating continued strong demand for physical gold.
🌍 Global Impact of Tariff Fears
The tariff scare also raised serious concerns about the global gold trade, especially with Switzerland, which is responsible for nearly 70% of global refining capacity. According to the Swiss Precious Metals Association, a 39% tariff would have a crippling effect on global gold flows, potentially disrupting established supply chains and trading relationships.
🧐 Outlook for Gold
With tariff uncertainty now settled, traders will likely turn their attention back to global economic factors, inflation concerns, and interest rate expectations as key drivers for gold prices. The current price dip offers a potential buying opportunity for those looking to capitalize on long-term demand for gold, despite the short-term volatility.
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