Gold Tariff Exemption Confirmed and Market Expectations

Former US President Donald Trump has confirmed that gold will be exempt from tariffs, ending a period of uncertainty that affected the market. Despite this confirmation, market observers believe that gold is on track for new gains.

Background of the Decision and Initial Impacts

Last week, reports circulated that some gold bars might be included in so-called 'reciprocal tariffs,' causing gold futures in the United States to hit record highs. This controversy raised questions about the future of gold trading.

Exemption Confirmation and Consequences

On July 31, US Customs and Border Protection (CBP) issued a ruling concerning a Swiss gold refinery, stating that gold bars weighing 1 kg and 100 ounces were subject to customs codes that could not be exempted from tariffs. However, Trump clarified matters via his platform 'Truth Social,' asserting that 'gold will not be taxed!'

Analyst Perspectives

Even before this confirmation, Philippe Gijsels, chief strategist at BNP Paribas Fortis, was optimistic about gold. He told CNBC that he believed the price of gold could exceed his target of $4,000. He added that exempting gold from tariffs paves the way for prices to rise to new heights.

Why is Gold Considered a Safe Haven?

Gijsels points out that gold typically performs well during times of turmoil, uncertainty, and volatility. He adds: 'When people are concerned about high deficit and debt levels and persistent inflation, they look for a beacon of stability.' He believes that current conditions represent a 'perfect storm' for gold, meaning that the bull market for these precious metals has only just begun.

UBS Bank Forecasts

UBS also expects spot gold prices to rise. In a report released on Tuesday, the bank's analysts stated that the spot gold price in London is expected to reach $3,500 per ounce by the end of the year, an increase of nearly 4.5% from the current price.

Impact of Previous Confusion

Analysts at UBS point out that the recent controversy over the classification of US gold imports illustrates that the statements, interpretations, and actual implementation of tariffs within the Trump administration can cause confusion in practice. They add that 'dramatic events are unforgettable,' and that previous confusion may have a lasting impact on the mindset of gold investors, even with the White House clarifying tariff exemptions.

Recommendations for Investors

UBS experts recommend focusing on how and where to hold gold, noting that their target for the spot gold price in London is $3,500 per ounce by the end of 2025, with the potential for greater gains if economic or geopolitical risks escalate.

Deutsche Bank's Opinion

For his part, Michael Hsueh, a research analyst at Deutsche Bank, told CNBC that the exemption of gold from tariffs was not surprising to the market. He pointed out that the difference between futures prices in London and New York has narrowed, reflecting this expectation.

Conclusion

Although the decision to exempt gold from tariffs has brought some clarity to the market, some uncertainties remain. However, this does not appear to significantly affect the market as long as these contradictions are resolved. The outlook for gold remains positive, driven by global economic conditions and concerns about inflation and debt, making gold an attractive option as a safe haven.

Exploring Alternative Assets as Portfolio Diversifiers

Beyond gold, investors looking for stability during economic uncertainty often explore other alternative assets like real estate, commodities (such as silver or platinum), and even certain types of cryptocurrencies (though with higher risk). Each of these assets carries its own unique set of risks and rewards, making thorough research essential before including them in an investment portfolio. Carefully considering the correlation of these assets with traditional stocks and bonds is crucial for effective diversification.