SunSirs: Trump's Tariff Pivot: Analyzing the Immediate Impact on Global Precious Metal Flows

A series of changes in U.S. tariff policies have attracted significant attention from global markets.

U.S. Customs and Border Protection (CBP) recently stated that it will stop collecting tariffs imposed under the International Emergency Economic Powers Act (IEEPA) starting from February 24, Eastern Time. Previously, on February 20, the U.S. Supreme Court ruled that the "reciprocal tariffs" and fentanyl tariffs imposed under IEEPA were illegal.

However, also on February 20, after the Supreme Court ruling was announced, U.S. President Trump declared that, in accordance with Section 122 of the U.S. Trade Act of 1974, a 10% import tariff would be imposed on goods worldwide for 150 days to replace the tariffs that had been deemed illegal by the Supreme Court. On February 21, Trump posted on social media stating that the rate of the "global import tariff" he had announced the previous day on goods imported into the United States would be increased from 10% to 15%.

Markets are concerned about the resurgence of a new round of trade frictions, and the demand for safe-haven assets has risen rapidly, leading to a corresponding increase in gold prices. On February 23, spot gold rebounded above $5,200 per ounce, the first time since January 30, with an intraday gain of nearly 2%. During China's Spring Festival holiday, the price of London spot gold showed a trend of first falling and then rising, with the highest gold price reaching $5,237.84 per ounce and the lowest touching $4,841.37 per ounce.

Qu Rui, Senior Deputy Director of the Research and Development Department of Dongfang Jincheng, believes that this is mainly due to the resurgence of U.S. tariff disputes, the increasing uncertainty in trade policies, and the concentrated outbreak of safe-haven demand caused by the escalation of geopolitical risks between the United States and Iran. These multiple factors have jointly driven a sharp rise in gold prices.

Yu Mengguo, General Manager of Jinpeng Futures, stated in an interview with a reporter from China Business Journal: "The ruling by the US Supreme Court that the previous tariffs were illegal is essentially a conflict between policy and law, which directly exacerbates market concerns about the US fiscal situation and the credit of the US dollar. When risk aversion rises, precious metals such as gold and silver tend to strengthen. Although the US has introduced new tariffs, their legal basis is also uncertain, and policy reversals will only further increase uncertainty. Coupled with the possible refund of hundreds of billions of dollars in tariffs, which will also push up inflation expectations, it will constitute a significant positive for assets like gold that have both anti-inflation and safe-haven properties. Therefore, gold and silver are expected to return to an upward trend.

This ruling has also triggered a significant tax refund issue. Economists from the relevant forecasting model at the University of Pennsylvania estimate that more than $175 billion in tariff revenues are at risk of being refunded.

Goldman Sachs economists, in their latest report, believe that in a more ideal scenario, companies may slow down the rate of price increases for goods that enjoy tariff reductions in the future, but are unlikely to cut prices directly. Similarly, Paul Donovan, Chief Economist at UBS, also pointed out that tax refunds are unlikely to truly reach consumers.

The interviewed experts also believe that this is a check and balance on presidential power by the U.S. judicial system, but it has also had a "double-edged sword" effect on the operation of the U.S. economy.

Huang Jiaqi, a precious metals analyst at Zhuochuang Information, stated in an interview with reporters: "On one hand, the frequent changes in the trade policies of the Trump administration in recent years have made the investment environment for enterprises more difficult and hard to grasp; some import tariff costs will also be passed on to downstream American consumers along the industrial chain, pushing up the cost of living for residents, which will undoubtedly have a negative impact on the U.S. economy. On the other hand, currently, major economies around the world are generally facing the problem of debt expansion, and the United States is no exception. Tariff revenues also play an undeniable role in supporting the advancement of government policies, maintaining welfare security, and repaying existing government debts.

Huang Jiaqi also pointed out that the impact of this incident on precious metals goes beyond the ruling itself, and Trump's subsequent "counterattack" is also worthy of attention. His activation of Section 122 of the Trade Act of 1974 to impose additional tariffs and raise the tax rate to 15% reflects Trump's tough stance on tariff imposition, which is not limited to a specific legal framework, and this will continue to boost market risk aversion.

Looking ahead to the future gold price, Yu Mengguo told reporters: "I still firmly hold a bullish view on gold. This is because central banks around the world are continuing to increase their gold holdings, and risks such as geopolitical conflicts and U.S. debt pressures still exist. Once funds have a need for safe haven, they will flow into gold. It is highly probable that the gold price will continue to rise in 2026, with certain room for upward movement.

Huang Jiaqi is also optimistic about the trend of gold: "CME FedWatch shows that the Federal Reserve still has about 50 basis points of interest rate cut space within the year, which supports precious metals. In addition, whether it is tariffs, debt, or geopolitical risks, they will trigger market risk aversion, thereby driving capital flows to precious metals.

Meanwhile, during the Spring Festival holiday, the international silver market also saw a strong upward trend. Public data shows that silver rose by 17%.

Regarding the future trend of silver, Yu Mengguo believes: "Silver is generally strong, but fluctuations may be relatively large. It is expected to rise rapidly along with gold in the first half of this year, but in the second half, it will depend more on its industrial product attributes, especially changes in the demand for silver in photovoltaic applications. If the relevant demand slows down, the upward space will face pressure, and the price may pull back.

Overall, Huang Jiaqi predicts that the precious metals sector will still have room for growth in 2026, but it is necessary to be vigilant against the risk of increased volatility.

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