For the first time in history, the price of gold temporarily rose above the $3,000 per troy ounce (around 31.1 grams) mark Friday morning.

The continuing geopolitical risks and rising fears of a further escalating trade dispute and additional tariffs have caused the price of the precious metal to rise further.

Fear of Gold Tariffs

While the uncertainty is already causing a high demand for what is considered a safe investment, there is an additional factor. According to a report in the «Financial Times», a significant shift in physical gold holdings from London to New York can currently be observed.

This is explained by fears that Donald Trump's administration will introduce a tariff on imports of physical gold in addition to the entire range of goods that have recently been subject to punitive tariffs.

This has created a price differential between London and the US, which several players use for arbitrage trading. In recent months, more than $61 billion worth of gold bars have flowed into the US as traders tried to avoid the potential levies. This has distorted US trade data and caused a bottleneck in London, the world's largest gold trading center.

Detour Via Switzerland

According to the report, the Swiss gold smelter Argor-Heraeus also benefits from this shift. As the gold in London is usually stored in 12.5-kilo bars (400 oz), the 1-kilo bar is common in the USA. On its way to the USA, the gold makes a stopover at the refinery in Mendrisio in Ticino to be remelted into the smaller format.

The smelter is currently working around the clock, the company's CO-CEO Robin Kolvenbach told the newspaper. «Demand has risen quite sharply. Normally, a peak in demand lasts one or two weeks. But a peak like the one we are currently experiencing, which has lasted for more than three months, is quite normal.»