Trump Scraps Gold Tariff — Was It a Market Stress Test?
US President Donald Trump and tariffs on gold! (Image TRH)
Trump’s abrupt reversal on 39% duty for 1kg and 100oz gold bars sparks speculation of a deliberate COMEX-focused stress test
By S JHA
MUMBAI, August 11, 2025 — US President Donald J. Trump has abruptly withdrawn a controversial 39% tariff on certain gold imports just eight days after it was announced, raising questions over whether the move was a bureaucratic blunder or a calculated stress test of the global gold market.
The duty, announced on July 31 via a US Customs and Border Protection (CBP) ruling, targeted only one-kilogram and 100-ounce gold bars — the primary units traded on COMEX, the world’s largest gold futures exchange. The tariff was officially retracted on August 9 through an executive order, following White House signals on August 8 that “misinformation” would be clarified.
Precious metals analysts note the narrow scope and short duration of the tariff coincided with disruptions in gold flows: Swiss refineries paused shipments, US inflows fell by 20 tons, and COMEX inventories surged by 50 tons — a 2.5x leverage effect. Meanwhile, LBMA inventories dropped 100 tons, suggesting intensifying global competition for gold.
“The brief tariff widened the COMEX futures–spot spread to $100 per ounce from a two-year average of $13, spurred a 3% price jump in India, and a 1.18% decline in London,” said preciousmetals.my in a thread on X. These ripple effects, observers say, could inform future US gold controls to influence global pricing, bolster reserves, or counter gold-backed currency initiatives from rivals like BRICS.
The precision targeting of COMEX-standard bars and the rapid rollback stoked speculation that Washington was testing how trade barriers could be deployed to shape gold flows and exert pressure on foreign markets — without triggering prolonged instability.
Earlier, Trump via a Truth Social post said: “Gold will not be Tariffed!” Gold futures closed 2.48% lower at $3,404.70 per ounce after the announcement, said CNBC in a report. It also stated that the Swiss Precious Metal Association had warned on Friday that the customs ruling “may negatively impact the international flow of physical gold.”
Meanwhile, Trump’s announcement of 50% tariffs on India is rattling the gems and jewelry sector. Already under a 25% US tariff, Indian gold jewelry will face another 25% hike from August 27, effectively doubling the duty to 50%. Rajesh Rokde, Chairman of the All-India Gem and Jewelry Domestic Council, called it a “compounded blow.” He stated that tariffs endanger thousands of skilled artisans jobs and threatens to erode India’s centuries-old jewelry heritage, reported the Indian Eye.
It also stated that vice chairman Avinash Gupta warned that the tariff shock could weaken the rupee, raise domestic gold prices, and dampen demand at home — creating a double bind for the sector.
“India is the world’s largest consumer of gold and a leading exporter of diamonds and jewelry,” said the Indian Eye in its report. India had shipped $22 billion worth of gems and jewelry in FY24, with $11 billion bound for the US.
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