Overview

• The U.S. Customs Border Protection’s July 31 ruling reclassified one-kilogram and 100-ounce gold bars under tariff-liable codes, bringing key delivery formats under duties.
• New York gold futures premiums surged to more than $100 per ounce above London spot, reflecting higher import costs and delivery constraints.
• UBS warned that elevated costs could trigger mass closeouts of short exchange-for-physical positions, with those unwinds straining funding in London’s bullion banking system.
• By constraining deliverable supplies, the duties intensify Basel III-driven capital requirements for bullion banks and erode the LBMA’s capacity to rehypothecate ‘good delivery’ bars.
• Several Swiss refiners have paused or scaled back shipments to assess legal exposure as traders and analysts work to clarify country-of-origin coverage and enforcement details.