Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
BCA Research reported that Donald Trump’s tariff policies are unlikely to affect precious metals. The administration’s assertive and widespread use of tariffs has raised concerns that the far-reaching taxes could cover precious metals. This has sparked an exodus of physical gold from foreign exchanges as investors seek to avoid possible premium hikes, leading to a seismic shift in bullion allocation. Despite the strong market reaction, some analysts claim the odds of a precious metals tariff remain low.
Trump’s Tariff Threats Spark Fears
Trump is making good on his campaign promise to levy tariffs on some of the country’s largest trading partners including Canada, Mexico, and China. The tariffs’ percentages, targets, and timelines remain in constant flux as the Commander-in-Chief seeks to shake out the best trade deals. However, this policy uncertainty has fueled fears of a precious metals tariff.
Trump’s heavy focus on industrial metals such as aluminum and steel and the possibility that the UK, home to one of the largest bullion banks in the world, will become the next target have only fanned these worries.
As Société Générale’s head of commodities research, Michael Haigh, explains,
There is a feeling that Trump could go across the board and impose new tariffs on raw materials coming into the US, including gold.
A Physical Bullion Exodus
Even with nothing set in stone, the mere possibility of a precious metals tariff has caused one of the largest transfers of physical bullion in recent memory. Retail and institutional investors are pulling gold out of foreign exchanges, especially in the UK, in droves to avoid potential taxes.
According to the Financial Times, nearly 400 tons of gold have shifted to New York’s commodity exchange (COMEX) from abroad since November 2024. However, these numbers could be far higher as JP Morgan, HSBC, and other major banks have added to private vaults. Overall, COMEX has reported a 75% jump in gold holdings.
The London Bullion Market Association (LBMA) suffered a nearly 2% drop in physical holdings in January, and the Bank of England saw its largest outflows in the past 13 years.
Why Precious Metals Tariffs Are Unlikely
Although Trump’s tariff policy is having concrete implications for the precious metals industry, BCA Research suggests fears might be overblown. In a recent report, the research group concluded,
The odds are considerable that the US will not impose import tariffs on gold, silver, platinum, and copper.
Here’s why:
No Incentive — Analysts highlight a lack of economic or political justification for targeting precious metals. Unlike pure industrial metals, gold and silver are widely traded as investments, an asset group largely untouched by tariffs.
No Precedent — Tariffs were a staple of Trump’s first term, yet these far-reaching policies never affected investment metals. This lack of precedent further calls into question whether precious metals will be slapped with taxes.
No Indication — Aluminum and steel have already been subject to a hefty 25% tariff, suggesting the administration is taking a precise and targeted approach to the issue rather than haphazardly imposing taxes on random imports.
While acknowledging the short-term price impact of tariff fears, BCA Research underscores the value of precious metals is overwhelmingly influenced by central bank demand, monetary policies, and macroeconomic conditions.