How USA tariff uncertainty affects Gold
Gold prices tumbled today after an early rally on Friday, as traders awaited fresh guidance from the Trump administration on its gold import tariff policy. The precious metal market remains cautious without the long term clarity on trade rules as previously the administration exempted gold from duties.
A ruling by U.S. Customs and Border Protection that standard 1-kilogram and 100-ounce gold bars will be hit with import tariffs drove gold to a record above $3,530 per ounce last week. This sparked confusion, as many traders believed the bars would be exempt from reciprocal tariffs, including a 39% duty on Swiss goods imposed by President Trump. The White House later issued an executive order confirming that 1-kilogram and 100-ounce gold bars will indeed face the levies.
During the first half of Monday’s European session, gold stayed under pressure, trading just above a multi-day low. A softer U.S. dollar at the start of the week offered some support to the non-yielding metal.
In a separate move, the U.S. slapped 50% tariffs on Indian goods, half of them in response to India’s purchases of Russian oil. The measure is part of Washington’s efforts to pressure Moscow to end the war in Ukraine. The tariffs, combined with a weakening rupee and inflation fears, have driven Indian gold prices to a record above 1 lakh rupees per 10 grams.
Uncertainty over trade ahead of Tuesday’s U.S.-China tariff truce deadline has helped limit gold’s downside. However, optimism surrounding U.S.-Russia talks on Ukraine has capped safe-haven demand, keeping any meaningful rebound for XAU/USD out of reach.