The massive flow of gold and silver into the US has abruptly ended following exemptions to Donald Trump’s tariffs on precious metals.
For months, fears of potential tariffs created unusually high price premiums in New York compared to global markets, incentivizing traders to ship over $80 billion worth of bullion to the US.
This arbitrage opportunity distorted US trade data, even contributing to a record trade deficit in January. After the exemption announcement, price differentials collapsed immediately – the gap between US and London gold prices dropped from $62 to $23 per ounce, while silver’s premium fell from over $1 to just 24 cents.
US precious metal inventories had reached all-time highs, with gold stocks up 26.5 million ounces and silver up 174.6 million ounces since November.