According to a letter dated July 31 from the US Customs and Border Protection Agency (CBP) quoted by CNN, imported 1-kg and 100-ounce gold bars will be subject to counterpart tariffs. This information confused Wall Street traders because most had previously believed that gold would be tax-free.
The tax will increase the cost of gold imports into the US, seriously disrupting the global supply chain that operates smoothly between the centers of London, New York and Swiss cities.
On the afternoon of August 8 (local time), the White House called the information about the gold tax "false" and said that it would soon issue an executive order to clarify. We will clarify the tax on gold bullion and other special products, an official told CNN.
Immediately after the announcement, New York gold prices - which had once jumped by 1% - cooled down, increasing by only 0.2% in the afternoon.
President Donald Trump's recently launched tariff campaign imposes a 39% tariff on Swiss imports - a record high that took effect on August 8. CBP's letter affirmed that Swiss gold bars are also in this category.
The unexpected developments caused New York gold futures to skyrocket by more than 1% to over $3,500/ounce on the evening of August 8 - a record high - before falling to about $3,460/ounce on the afternoon of August 9.
Mr. Ulrike Hoffmann- bur bur burdi - Head of Global Stock Department of UBS - commented: "Gold traders will have to face the impacts of this unpredictable tax".
With much of the gold refining capacity located in Switzerland, the 39% tax rate will push up import costs, making it difficult to execute gold futures on the Comex exchange, according to UBS expert Joni Teves.
Gold prices in London have remained almost unchanged, but prices in New York have clearly shown that the US market is starting to form a gap.
Mr. Ole Hansen - Head of Commodity Strategy at Saxo Bank - warned: "Gold tax could distort the market and make the New York exchange less attractive to global investors, especially when it is affected by unexpected changes in Mr. Trump's tax policy".
Not only Wall Street, the global gold industry is also concerned. Mr. Christoph Wild - Chairman of the Swiss Association of Precious Metals Manufacturers and Traders - emphasized: "We are particularly concerned about the impact of taxes on the gold industry and the exchange of physical gold between Switzerland and the US, a long-standing and important partner".
In the context of no official explanation, experts predict that gold and precious metals prices will continue to " run like a rope" in the coming days.
