Dark days are ahead for the precious metal. Gold is under threat. In a surprise move, the United States has imposed tariffs on one-kilogram bars, the most popular form of exchange-traded bullion. With a single stroke, President Donald Trump’s administration has turned gold from a safe-haven asset and symbol of stability into a source of volatility.

The news stunned traders, analysts, and industry insiders, with some calling it the worst-case scenario. Experts now warn of supply disruptions and a diminished role for Comex as the global hub of gold futures trading. 

Panic swept through the market after the import tariffs took effect on standard one-kilogram and 100-ounce bars that dominate trading on New York’s Comex, the world’s largest gold futures market. According to the US Customs and Border Protection, these bars are now subject to the retaliatory tariffs introduced by Trump.

The key change lies in customs classification. Bullion is now designated under code 7108.13.5500, a "semi-manufactured product" subject to duties, instead of code 7108.12.10, which is exempt from tariffs as "unwrought gold." 

Against this background, New York gold futures backed by these bars surged to a record $3,534 an ounce, shocking the market, while London prices held steady, creating an unusual spread of more than $100.

The news came as a "huge surprise", said Joni Teves, analyst at UBS, adding: "This is precisely what the market feared." Such tariffs, experts warn, threaten New York’s dominance in gold futures trading. "This creates an issue for the global gold market, which uses Comex gold futures to hedge positions," Teves said. "It raises the question of whether there may be alternate ways of settling these gold futures contracts, in terms of products or locations, or if other centres become more relevant."

The decision hit Switzerland particularly hard, as it supplies most standardized bullion to the United States. Trump had already slapped 39% tariffs on Swiss goods, straining relations. An appeal from Swiss President Karin Keller-Sutter failed to sway Washington. On August 8, the Swiss Precious Metals Association (ASFCMP) voiced concern over the tariffs' impact on the mining sector and physical gold trade with the US, a long-standing partner. The group claims that the new duties make gold exports to the US economically unviable.

One remaining question is whether other forms of bullion, such as the 400-ounce bars actively traded in London, will be subject to the same levies. If not, they could be shipped to the US and recast into one-kilogram blocks, one refinery manager suggested. However, processing capacity in America is limited. If this becomes the only route, the Comex market will turn unprofitable, Metals Focus Managing Director Nikos Kavalis estimated. Analysts caution that Washington’s tariff policy is eroding gold’s reputation as a stable financial instrument.