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Peter C. Earle: Is Trump's 39% tariff on gold a revenue grab or prelude to revaluation?
By Peter C. Earle
American Institute for Economic Research
Great Barrington, Massachusetts
Friday, August 8, 2025
In the early hours of trading today, global markets were shaken by the announcement by the Trump administration of a 39% tariff on imported gold bars weighing 100 ounces or more. U.S. December gold futures reached an all-time high price of $3,534.10 per ounce shortly after the declaration was made.
This sudden move injected uncertainty into the bullion market, unsettling dealers, refiners, and institutional investors trading in larger "exchange delivery" formats. While gold is rarely targeted by protectionist measures -- unlike base metals, agriculture, or manufactured goods -- this decision warrants close attention, both for its immediate market impact and potential implications for future monetary policy.
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From an economic perspective, there are several plausible motivations (several of which may hold true simultaneously) for such a steep and sudden measure. ...
5) Positioning Ahead of a Major Policy Shift
A 39% tariff on gold bars over 100 ounces could be a preparatory measure for the United States to revalue its gold reserves, which are currently undervalued at $42 per ounce. The tariff could prevent arbitrage by limiting the ability of speculators to buy gold at lower international prices and sell it domestically at a higher future price, particularly if the U.S. plans to revalue its gold to market prices around $3,200 per ounce.
It would also help accumulate gold within the U.S., ensuring that domestic supply is maintained for a potential gold-backed or partially gold-backed dollar.
Additionally, the tariff could stabilize domestic gold prices, mitigate speculation, and prepare the market for revaluation, signaling an intention to shift away from the dollar’s exclusive backing. This would reduce external manipulation and maintain U.S. control over its gold supply, easing the transition to a new monetary framework while strengthening the dollar's global position. ...
For the remainder of the analysis:
https://thedailyeconomy.org/article/trumps-39-tariff-on-gold-revenue-grab-or-prelude-to-revaluation/
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