Switzerland is looking for an agreement with the United States to invest in the refining of gold directly in the USA, as a counterpart to lower the 39% duties imposed by President Trump, the highest among the developed nations of the West. A clear inversion of course compared to the hardest position taken at first by President Karin Keller, who in the end proved counterproductive for the Swiss economy, forcing Swiss officials to make a series of concessions in various sectors, from energy to agriculture, but above all on the business of gold recycling business.
The proposal made to the USA
Bern has offered to invest in the US refining gold industry, in order to cancel the huge deficit accused by the United States in the first quarter of the year, largely conditioned by gold exports to the USA.
The proposal, made by the Minister of the Swiss Economy Guy Parmelin to the US Treasury Secretary Scott Beesent and the Jamieson Greer representative for trade, would consist in transferring the low -margin activities of the Swiss refineries to the United States. This includes the merger of the gold bars exchanged in London and their refusal in smaller ingots for the New York market.
The flow of recycled gold
The trade of ingots with the United States is usually quite balanced, but the situation has changed in the first quarter of this year, when a huge surplus exploded in favor of Switzerland, since fears of duties on gold have opened a profitable arbitrage opportunities for traders.
Gold is usually imported from the London market (LBMA) into 400 ounce cuts, which are merged and then transformed into smaller ingots of 1 kilogram to satisfy the cut in use on the New York market. However, this activity carried out in the Swiss refineries of the Canton Ticino is however at very low margin, despite the record rezzo reached by the precious metal.
The Swiss crossroads of gold exchanges
Switzerland is one of the main gold refiners in the world and hosts world-renowned refineries such as Pamp, Argor-Heraeus, Valcambi and Mks Pamp, which export 70-80% of the gold extracted globally, largely towards the USA. These companies are renowned for the high quality of processing, respect for the standards of the London Bullion Market Association (LBMA) and the long tradition in the sector.
A golden tax
The commercial distortions that is creating the recycled gold trade in the USA have aroused criticism against the Aurifera industry. Several political exponents asked that gold shipments were taxed at 5%, while government officials are looking for a solution to convince the White House to lower the duties of 39%, transferring the activity to the USA.
Christoph Wild, president of the Swiss association of precious metals (Asfcmp), refused to comment on the possible construction of a refinery in the USA, but said that, as long as gold will continue to inflate the deficit, the sector will have to evaluate how to avoid this situation. One of the main problems lies in the very low margins guaranteed by this activity.
