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Gold markets fell sharply after Trump announced no tariffs on gold imports, causing a significant price drop on India’s Multi Commodity Exchange and US gold futures
US gold futures dropped 2.4 to 2.5 percent after the announcement. (Representative Image)
Global gold markets witnessed a sharp correction after US President Donald Trump announced that no tariffs would be imposed on gold imports, a move that has eased weeks of uncertainty. The announcement, made late on August 11, triggered an immediate fall of nearly Rs 1,400 per 10 grams on the Multi Commodity Exchange (MCX) in India. Prices slid further by about Rs 50 in early trade on August 12, with the day’s trading yet to conclude.
Trump’s statement effectively overturned apprehensions sparked by a recent US Customs and Border Protection (CBP) notice, which hinted at a possible tariff on standard gold bars weighing one kilogramme or 100 ounces. That proposal had rattled the bullion trade, raising fears of disrupted supply chains and volatile pricing.
Following the announcement, US gold futures for December delivery dropped by 2.4 to 2.5 percent, trading between $3,404 and $3,407 per ounce. Spot gold declined 1.2 percent, stabilising at around $3,357 to $3,358.33 per ounce, while global benchmark spot gold hovered between $3,394 and $3,402.70. This comes just days after US gold futures hit a record high of $3,534 per ounce on August 8.
Relief for Switzerland’s Gold Trade
The decision is particularly significant for Switzerland, the world’s leading hub for gold refining and exports. Swiss shipments to the US were facing a potential 39 percent tariff, a threat that could have disrupted one of the most critical routes in the global bullion trade. The rollback removes that risk, ensuring smoother supply flows and stability in the refining sector.
Safe-Haven Demand Still Strong
Despite the correction, gold’s appeal as a safe-haven asset remains intact. Geopolitical tensions and uncertain trade policies continue to drive investor interest, although analysts note that the end of tariff fears could temper speculative spikes in prices.
Long-Term Outlook
According to the World Gold Council, global gold demand rose 1 percent to 1,206 tonnes in the first quarter of 2025, marking the highest quarterly consumption since 2016. Major banks, including Deutsche Bank, project sustained strength in gold prices over the coming months, citing central bank buying and persistent macroeconomic uncertainties. While Trump’s decision is expected to stabilise the market in the short term, prices are likely to remain elevated by historical standards.
Investment in Gold ETFs Gains Traction in India
For Indian investors seeking to ride the gold wave without handling physical bullion, Gold Exchange-Traded Funds (ETFs) remain a preferred option. Traded on stock exchanges, these funds mirror gold’s market price and eliminate concerns over storage or purity. They also offer liquidity, allowing investors to buy or sell quickly. While ETFs are subject to brokerage fees and market fluctuations, experts consider them a safer, more transparent way to invest in gold compared to traditional jewellery purchases.
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