US Customs Announce Tariff on Gold

GOLD

Gold futures hit record highs after reports that the White House imposed tariffs on one-kilogram gold bars, widening the spread between US and futures and spot prices. US Customs and Border Protection has clarified that one-kilogram and 100-ounce gold bars are subject to reciprocal tariffs and are not exempted as the industry had initially understood, according to a letter from the agency. The move threatens to disrupt shipments from Switzerland and other key trading and refining hubs, including Hong Kong and London, where prices are now trading at a big discount to the US market.

Markets are trying to understand the full scope and consequences of the ruling, including whether the CBP would treat larger 400-ounce bars that underpin trading in London in the same way and what the levies for major gold-producing countries will be. The potential market consequences are so significant that some traders have questioned whether the dramatic change could be an error on the CBP’s part. Uncertainty surrounding the future of tariffs on gold will likely keep prices elevated and at a premium over spot and LME prices.

Trade tensions continue, with Trump renewing his threat to hike tariffs on Indian goods over the country’s purchases of Russian oil. President Trump last week unveiled new tariff rates, ranging from 10% to 41%, on imports from dozens of countries, which took effect at 12:01 Thursday morning, rekindling global trade tensions and offering support for gold. Trump also confirmed that Indian imports will face an additional 25% tariff, while duties on select Brazilian goods were raised to 50%.

SILVER

Silver futures are higher, as expectations for interest rate cuts and uncertainty from new tariffs remain supportive of prices. Higher-than-expected weekly jobless claims, coupled with last week’s weaker-than-expected nonfarm payrolls report, prompted traders to price in a Federal Reserve rate cut in September.

Silver also saw support from the newly announced $100 billion investment into the US from Apple, intensifying industrial domestic demand for silver in the US. President Trump announced a 100% tariff on imported semiconductors and chips, excluding companies that manufacture within the US. The structural supply deficit and increased investor attention remain supportive of prices as well. Demand, especially from the energy sectors, is not slowing down. The metal is crucial to the technology needed to meet rising global electricity demand, including solar power, electric vehicles, and electronics.

Solar demand alone accounted for 17% of last year’s total, a threefold increase over the 5.6% from a decade ago. Industry data shows that global mine supply has declined by 7% since 2016, contributing to the prolonged structural deficit. It is estimated that the cumulative shortfall during 2021-2025 is almost 800 million oz. Investor demand has also remained favorable for prices, the rise of silver exchange-traded products (ETPs) continues to impact silver demand significantly, as many silver ETPs are backed by actual silver stored in vaults, rendering it unavailable for industrial users. In the first half of 2025, global silver-backed ETPs experienced significant net inflows, reaching 95 million oz. According to the Silver Institute, since 2019, more than 1.1 billion oz. (market balance plus ETPs) have been drawn from “available mobile inventory.” Silver prices will continue to be primarily influenced by investor demand, as the decreased availability will make the metal more sensitive to demand changes.

COPPER

Copper prices are higher, on pace for three straight days of gains, boosted by hopes of US interest rate cuts and upbeat data from China. Data released on Thursday showed China’s exports beat forecasts in July as manufacturers made the most of the tariff truce between Beijing and Washington. Data also showed that China’s copper concentrate imports rose 9% in July. China’s copper smelting sector hit a record in production this year; analysts are expecting output to grow 7.5% to 12%.

Investors will also monitor the situation at the El Teniente mine after it announced it had run out of stockpiled ore and had to put its plants, including the Caletones smelter, on care and maintenance. El Teniente accounts for over a quarter of Codelco’s output. Codelco must produce four reports on the collapse, according to a government document, before it can restart its underground operations there. As long as the ongoing investigation into the mines’ collapse is underway, it is unlikely to restart anytime soon. Copper prices have not seen a major reaction to the outage so far, as investors are still grappling with US tariffs, although the stoppage remains supportive of copper prices.

Trading conditions continue to settle after the White House’s move last week to exclude most copper products from tariffs, only applying tariffs to semi-finished products like wires and pipes, exempting key imports such as ore, cathodes, and concentrates, which make up the bulk of copper inflows. The move pushed US copper prices back to parity with the LME benchmark. Traders will shift attention to the huge volume of copper that has been shipped to the US in anticipation of all-encompassing tariffs. Spreads between prices in London, New York, and Shanghai are likely to determine the direction of metal flows. Any price move outside of a $100-$200 spread between CME and LME copper will likely trigger metal flows.

Long-term gains in copper could also be limited over concerns of surpluses in the market. The global refined copper market showed a 97,000 metric ton surplus in May, compared with an 80,000 metric ton deficit in April. Further weighing on sentiment are signs of weakening global demand, with China’s Yangshan copper premium falling by half since its May peak.

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