The global gold market was thrown into turmoil after a July 31 letter from U.S. Customs and Border Protection indicated that 1‑kilogram and 100‑ounce gold bars from Switzerland would be classified under a customs code that can carry heavy import duties — with Switzerland recently assigned a rate as high as 39%.

The announcement sent Comex futures to an intraday record of $3,534.10 shortly after 6:00 p.m. EDT and pushed spot prices through the $3,400 level. Spot gold later traded near $3,394.85, down marginally on the session, while Comex futures held roughly a $100 premium over spot, trading around $3,496.60.

Market mechanics and potential fallout analysts warn the tariff ruling, if sustained, could meaningfully alter physical flows and market plumbing:

• Deliverability and EFPs: Kilo and 100‑oz bars are key deliverable formats. Higher import costs into the U.S. would make delivering Swiss bars far more expensive, prompting some holders of short exchange‑for‑physical (EFP) positions to close rather than deliver. Closing these positions requires buying back futures and unwinding financed physical legs, which can create sudden demand for cash and strain London bullion financing markets.

• Premiums and spreads: Non‑Swiss bars would likely command hefty premiums while Swiss bars could trade at a discount, widening the London–New York price gap. Analysts warn the current gap of over $100 per ounce could widen substantially if flows are rerouted.

• Funding stress and liquidity: Rapid unwinds of financed physical positions could tighten funding conditions in London’s bullion market, compounding volatility.

What industry voices are saying

• Stephen Innes, SPI Asset Management: Kilo bars are “the battleground where gold’s paper price meets physical demand,” and applying a 39% levy effectively “rewrites the international script” on gold flows. He expects premiums to widen and arbitrage activity to increase.

• Joni Teves, UBS: The existence of U.S. tariffs on deliverable gold “raises the question on the role of futures trading in the U.S.” and leaves precious‑metals markets nervous until there is clarity.

• Eamonn Sheridan: Tariffs could prompt mass closeouts of short EFPs, triggering sudden demand for liquidity in London’s bullion market as traders unwind physical delivery legs.

• Ole Hansen, Saxo Bank: The ruling has undermined confidence in U.S. futures markets as a stable hedging venue, contributing to sharply wider EFP spreads driven by short‑covering.

• Ross Norman, Metals Daily: Imposing high tariffs on Swiss kilobars is “akin to pouring sand into an otherwise well‑functioning engine,” and could reprice gold loco New York by hundreds of dollars per ounce in extreme scenarios. He urged clarification from U.S. Customs on which tariff code applies and said market infrastructure providers such as CME Group will face pressure to respond.

• Rhona O’Connell, StoneX: The Harmonized Tariff Schedule currently shows “free” for the proposed classification, so the situation may amount to a misunderstanding if the schedule is up to date.

• Miguel Perez‑Santalla, The Wyoming Reserve: The report should be treated as hearsay until an official government statement is published; any change of this magnitude would likely require executive‑level sign