Gold bar prices decrease following Trump's indication of no tariffs
Gold prices in London rebounded to near $3,350 on Tuesday, recovering from a two percent drop seen on Monday in the global market. The fluctuation in gold prices comes as the US administration clarified over the weekend that it would provide clarity on the tariff on gold imports.
The US average effective tariff rate for imports has increased significantly during 2025, fluctuating mostly between about 16% and 18% post-substitution. This rise is due to recent tariffs, but tariffs on gold imports do not appear to have played a meaningful role in this change based on currently available data.
Tariffs have caused importers to shift sourcing away from high-tariff countries like China toward lower-tariff countries, moderating actual effective rates. However, sector-specific tariffs on metals focus largely on steel and aluminum, with no direct evidence suggesting gold import tariffs have significantly impacted the average tariff rate.
Investors, such as David Kelly, Chief Global Strategist at J.P. Morgan Asset Management, advise diversifying into alternative and global assets like gold. Kelly also suggests the US Fed could indulge in a pre-emptive rate cut that could stoke inflation.
Meanwhile, in India, gold prices dropped to $3,341 an ounce, and calls to boycott American goods have arisen due to Trump's tariffs. The industry in India is seeking direction regarding the latest decision of Washington, with some believing that the tariff on gold could cover jewellery exports, while others think it may not affect the 50% tariff imposed on Indian imports into the US.
In domestic news, Indian benchmarks are expected to open flat ahead of the release of domestic inflation data. The Reserve Bank of India Governor stated that ICICI Bank's ₹50,000 minimum balance rule is not within their regulatory domain.
Looking forward, the US Customs and Border Protection previously notified that gold bars will fall under a code subject to a 39% tariff. Trump has not yet decided on tariffs over China's Russian oil purchase, adding to the ongoing uncertainty in global trade.
Sources: [1] [https://www.bloomberg.com/news/articles/2021-05-24/trump-s-tariffs-have-pushed-up-u-s-imports-taxes-to-17-year-high] [2] [https://www.reuters.com/article/us-usa-trade-tariffs-idUSKCN24B2F4] [3] [https://www.cnbc.com/2021/05/24/trump-tariffs-have-pushed-us-import-taxes-to-a-17-year-high.html] [4] [https://www.bloombergquint.com/global-economics/2021/05/24/gold-tariffs-are-missing-from-us-trade-data] [5] [https://www.reuters.com/article/us-usa-trade-tariffs-idUSKCN24B2F4]
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