US tariffs have stung the Swiss gold refining sector beyong recovery

The price of gold on the US futures market hit a record high Friday after US customs authorities clarified that gold bars weighing either one kilogram or 100 ounces (2.8 kilograms) should be classified as subject to so-called reciprocal tariffs.

One-kilo gold bars are the most traded type of bullion on Comex, the world’s biggest futures market, and Switzerland is a major supplier of the bars on the physical market.

Expectations had been widespread that gold bars would be classified under a different customs code that excludes them from Trump’s countrywide tariffs.

Swiss officials travelled to Washington last week to seek a deal similar to the European Union, whose products now face a 15% rate. But they came back empty handed. The customs update increased pressure on the Swiss government as gold trading weighs heavily on its trade balance.

Switzerland is home to four of the world’s largest gold refineries, the largest being Valcambi in Balerna, in the Italian-speaking part of the country. They import unrefined gold coming from mines, recycled jewellery or lower-purity bars to be recast into high-quality bars, making Switzerland a hub for the global gold trade.

The value of these exports approached 88 billion Swiss francs ($109 billion at current rates), with the main buyers being China at 25.1 billion francs and India at 13.1 billion francs.