Gold Hits New High Amidst Reports of New US tariffs on One Kilo Bars

Gold futures in New York touched record highs on 8 August after the United States moved to impose tariffs on imports of one-kilo gold bars, while spot prices looked set for a second consecutive weekly gain, buoyed by tariff turmoil and expectations of US interest rate cuts.

According to the Financial Times, a letter from US Customs and Border Protection stated that one-kilo and 100-ounce gold bars would now be classified under a customs code carrying higher tariffs. The change could hit Switzerland, the world’s largest refining hub, as well as other key suppliers. The move comes just as President Donald Trump’s latest wave of tariff hikes on imports from dozens of countries came into force, pushing major trade partners such as Switzerland, Brazil and India to seek better terms.

Gold’s traditional role as a safe haven during political and financial upheaval has helped drive the rally. December futures briefly traded more than $102 per ounce above spot prices before easing to a $96 premium over the London benchmark.

Gold had been exempted from tariffs back in April when Trump announced sweeping duties on a range of imports, ending an arbitrage trade that had drawn nearly 850-tn of the metal into New York warehouses. That exemption saw US premiums collapse, closing the gap with other markets.

Looking ahead, Rahul Kalantri, VP Commodities at Mehta Equities, sees gold finding strong support at $3,364–3,345 per ounce, with resistance between $3,410 and $3,425.

Sandip Raichura, CEO of Retail Broking and Distribution & Director, PL Capital shared similar views while highlighting that gold was trading very nervously around $3,400 levels and just kissing the 20-day moving average. Tariff uncertainties and weak payrolls data in the US have kept the metal from correcting further even as the Fed stance is becoming more difficult to predict given the emerging US data, stagflationary in nature even as there is currently a 90% probability of a 25 basis point cut in September, Raichura noted. 

After playing a sidekick to equities in recent years, gold has been on a surge, up 12% in FY24 and 16% in FY23, according to MCX data. In India, prices have risen almost 30% over the past year, hovering around the ₹1 lakh mark. Silver has joined the rally, supported by robust industrial demand from the solar and electronics sectors.

Central banks, too, are stockpiling at record pace, adding over 1,000-tn to global reserves in 2024 alone. China and Russia have been leading the charge, part of a wider effort to reduce dependence on the US dollar.

“Russian and Chinese governments have been busy buying gold, crossing 200 tons in H1CY25 while gold ETFs have seen pushing net inflows to $4 billion over the past month,” Raichura further added.

In addition, he attributed the latest rise in reflects safe-haven flows into the metal to be sparked by President Trump’s punitive tariffs on Indian imports of 50% and threats to Japan for an extra 15% , reviving fears of a global trade war or possible realignments that could eventually hurt the dollar.