Gold Shipment to the US Abruptly Stopped After Tariff Exemption

A significant arbitrage trade that attracted tens of billions of dollars in gold and silver to the US abruptly ended with Wednesday’s announcement that precious metals would be exempt from Donald Trump’s extensive tariffs.

In recent months, prices in New York had been trading at unusually high premiums compared to global benchmarks, as traders assessed the risk of precious metals becoming subject to tariffs. This price differential incentivized banks and traders to fill planes and ships with bullion, distorting US trade data in the process.

After the announcement on Thursday, US premiums for precious metals plummeted following the inclusion of gold, silver, platinum, and palladium in the list of tariff exemptions. The difference between front-month Comex gold and spot gold in London fell to $23 an ounce, down from over $62 on Wednesday. For silver, the differential—known among precious metals traders as the “exchange for physical” or EFP—dropped from more than $1 an ounce to just 24 cents.

“Yesterday’s announcement effectively brings the significant flow of precious metals into the US to a close, as the EFPs collapse,” stated Anant Jatia, chief investment officer at Greenland Investment Management, a hedge fund focused on commodity arbitrage trading.

While US precious metals markets never fully accounted for the impact of significant tariffs, the mere possibility of them led traders to cover short positions in the US markets, resulting in a persistent differential. This scenario created a motivation to transport physical metal to the US.

US inventories of precious metals have risen to unprecedented levels, with gold stocks increasing by 26.5 million ounces since late November and silver up by 174.6 million ounces—combined inflows valued at over $80 billion at current prices.

Gold imports contributed to driving the US trade deficit to a record high in January, leading economists to exclude precious metals from their calculations. Inflows of gold to the US likely remained elevated throughout February and March, with some activity expected to continue into April due to trades booked while the arbitrage was still active.

© 2025 Bloomberg

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