As you have read on this blog before, many precious metals that are in demand in America are not mined here. When they are imported into the United States, they are subject to import tariffs. If you want an overview of what those tariffs are, you can learn more in a government document entitled The Harmonized Tariff Schedule of the United States.
Tariffs affect the prices of precious metals in many interesting ways. The bottom line is that high tariffs increase both the cost and the market value of imported metals. If a tariff is added to an imported metal like silver, that pulls up the market value; the value of metals that are not imported, but recycled and refined, rises too.
A Recent Case Study from India
Just a few days ago, the Indian government reduced the tariff on imported gold from $424 US to $408 US for 10 grams of gold. It also cut the import tariff on silver from $650 US to $617 US per kilogram. Interestingly, gold is the second most important import to India, second only to petroleum. The growth of the middle class in India has created rising demand for gold jewelry.
Bear in mind that changes in overseas markets can affect prices in America too. In our global economy, what happens in one country affects prices and consumer behavior in other countries too.
Those effects can be quite complicated. If tariffs on gold imports in India fall, for example, that can trigger new buying in that country and cause a ripple effect in other countries. For example, if India suddenly wants to buy all the gold it can on the international market, that can cause per-ounce prices in America to rise.
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If you have quantities of precious metals – silver, gold, palladium, cadmium - that question is the most important one that you should be asking. Be sure to visit our home page to know, on a day-to-day basis, the current values of the metals you have.
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