No Tariffs On Gold “What Would’ve Happened If?”

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A Look At The World Wide Bullion Market Why Gold Tariffs Would Ultimately Be Ineffective How The "Big Boys" Always Win In The End * * * Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. David: It's interesting, isn't it? Well, this is sort of a special commentary focused exclusively on gold. Tariffs on certain Swiss gold products have stirred enough speculation. I think it's worth exploring a number of market nuances in an effort to bring some insight. Kevin: You just told me you're reading a book that I love called, Surely You're joking. Mr. Feynman. It's about Richard Feynman, the physicist. But surely, Dave, you're joking. I mean, let's talk about tariffs a little bit because this has been an interesting week. David: And from one day to the next. This may be resolved by the time this is aired, which is interesting. Kevin: True. David: So there was an assumption by industry practitioners that tariffs would not apply to precious metals, as they had up to recently been specifically exempted. Metals are too critical as a reserve asset. They move amongst central banks and they play back and forth from one bank to the next. The ebbs and flows of the above-ground inventories, it's critical to reserve managers. Despite that thinking, risk managers and lawyers insisted that the US exchange take on more inventory prior to and just in case tariffs were implemented. This goes back to the first quarter of 2024, and we actually began to see an as soon as tariffs were mentioned, late in 2024. Kevin: Yeah, there was a lot of Swiss product being moved to the United States, wasn't there? David: Yeah. In the last quarter of 2024, first quarter of 2025, an extraordinary amount of Swiss product was moved to the US, and product from London as well. In fact, the amount from London was at one point bringing London inventories to worryingly low levels. In the first quarter of 2025, because of the threat of Trump's tariffs, and again extending to gold, the totals imported into the states hit $38 billion. And if you look at our import-export numbers and the GDP statistics, they were skewed because of the scale, because of the size of that gold import. Distorted our import export numbers dramatically. But remember, the disruption, the distortion in supply would not have occurred without the threat of tariffs from the Trump Administration. Kevin: Well, and Trump uses these things. This is the bully factor. I mean, he at this point is saying that the Swiss, they're not playing fair. David: Now, in response to elevated import figures from Cheese Land— We sometimes talk about Switzerland as Cheese Land. Kevin: Stinky Cheese Land. When I was with you, you introduced me to stinky cheese. David: Oh, but it can be delicious. Cave aged Gruyere is one of my favorites. But the Swiss are being accused of running an unreasonably high trade balance with the US. It's ironic to the core that we are leveling a 39% tariff on those Swiss imports, which includes the kilo and hundred-ounce gold bars. Kevin: So you mean imports into the United States, correct? David: That's correct. Kevin: Okay. So let's jump to a conclusion here, because there are a lot of listeners going, "Oh my gosh, I need to call in right away." David: Well, yeah, if I could offer my conclusion on the front end before setting that conclusion aside, and we can explore a couple more market details and minutiae. I don't think the tariffs will stick. Kevin: On gold anyway. David: Correct. There is a flow of gold going both ways across the Atlantic. Mostly scrap from the US to Switzerland, and that's for refining, and then refined product in the form of kilos and hundreds back to us. But let's start with this. The CME's largest single depository—that is the Chicago Mercantile Exchange—its largest single depository is run by JP Morgan. Kevin: You mean Jamie Dimon? David: Well, yeah.

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