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Tariff exemptions end rush to get gold and silver into U.S.
By Jack Farchy
Bloomberg News
Thursday, April 3, 2025
A massive arbitrage trade that has drawn tens of billions of dollars' worth of gold and silver to the United States came to an abrupt halt with Wednesday's announcement that precious metals would be exempt from Donald Trump’s sweeping tariffs.
For several months prices in New York have traded at large and unusual premiums to global benchmarks as traders weighed the risk that precious metals could be caught up in tariffs. The differential created an incentive for banks and traders to load planes and ships with so much bullion that it distorted U.S. trade data in the process.
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On Thursday U.S. premiums for precious metals tumbled after a list of exemptions from the tariffs included gold, silver, platinum and palladium. The difference between front-month Comex gold and spot gold in London dropped to $23 an ounce from over $62 on Wednesday. For silver, the differential -- known by precious metals trader as the "exchange for physical" or EFP -- tumbled from more than $1 an ounce to just 24 cents.
"Yesterday's announcement effectively puts an end to the massive flow of precious metals into the U.S. over the last few months as the EFPs collapse," said Anant Jatia, chief investment officer at Greenland Investment Management, a hedge fund specializing in commodity arbitrage trading. ...
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