The price of gold has eased after Donald Trump announced tariffs would not be placed on gold bars.
His social media statement on Monday put an end to uncertainty, which had caused panic in global trade of the precious metal.
Investors sold off the metal as Trump wrote on his Truth Social platform that “Gold will not be tariffed”. The White House had earlier said it would clarify “misinformation” about tariffs on gold bars, which are duty-free.
On Friday, the price of gold futures jumped to a record high after it was reported that the US would put tariffs on imports of 1kg bars.
That decision was seen as a big setback to Switzerland, which dominates the bullion market, with $36bn (£27bn) of exports making up more than two-thirds of the country’s trade surplus with the US in the first quarter, according to Swiss customs data.
Switzerland was hit with a blanket 39% tariff on all imports from the country, from gold to luxury watches, chocolate and cheese.
However, Trump’s statement on Monday allayed concerns about bullion exports, and US gold futures dropped 2.4% to $3,407 per ounce after his post on Monday, reducing a premium over spot gold, the global benchmark, which fell 1.2% to $3,357.
On Tuesday, gold prices edged up after data showed that US inflation remained unchanged at 2.7% in July, slightly lower than economists had expected.
The Swiss Association of Precious Metals Producers and Traders (ASFCMP) welcomed the statement by Trump but said it must be followed up with a “formal” decision.
“President Trump’s statement is an encouraging signal for trade stability,” said Christoph Wild, the president of the ASFCMP. “However, only a formal and binding decision will provide the certainty the gold sector and its partners require.”
A White House official told Reuters that the Trump administration was preparing an executive order “clarifying misinformation” about tariffs on gold bars and other products.
The gold market, considered a safe haven investment sector for customers ranging from individual investors to sovereign funds, was thrown into disarray last week when the US Customs and Border Protection said that 1kg and 100-ounce cast bars were not exempt from tariffs.
The authorities clarified their position in response to a letter from a law firm representing a metals financier after they were suddenly faced with tariffs.
Ross Norman, the chief executive of Metals Daily in London, said most physical gold being flown to New York, where the gold futures market is based, would have been held back in bonded warehouses while representatives sought urgent clarification from the White House.
“I am delighted to hear the crisis has been averted,” he said. “It will come as an enormous relief to the bullion markets, as the potential for disruption was incalculable.”
Norman said gold bullion investment was a major market in the US, where customers could buy gold in their local supermarkets, including Costco.
A kilo bar costs about £89,000 and coins, weighing an ounce, can be bought for £2,500. The metal is also used as a safe haven to hedge against inflation by commercial investors.
Bullion refers to gold and silver officially recognised as being at least 99.5% pure and is in the form of bars or ingots rather than coins.
