In January, the US trade deficit saw a "golden flood," with imports of finished metals accounting for 60% of the increase.

The latest data released by the US Department of Commerce on Thursday showed that the total import of goods in January reached a record high of $329.5 billion, an increase of $36 billion from the previous month. Imports of finished metals, including precious metal bars, accounted for nearly 60% of the increase in imports that month. This astonishing surge in imports has led to a sharp increase in the US trade deficit to unprecedented levels, further deepening concerns among the public about the economic situation. This dilemma is largely due to international gold traders shipping gold bars to storage facilities in New York. It is understood that since the end of 2024, US importers have been hoarding gold extensively. Data shows that the customs value of imported gold and other precious metal bars in December was as high as $10.7 billion. By January 2025, this number soared to $30.8 billion, a stark contrast to the average monthly import volume of $1.7 billion in 2022 and 2023. Normally, such a significant expansion of the US trade deficit would have a serious impact on the Gross Domestic Product (GDP). However, since this surge in imports is mainly due to arbitrage in the gold market and most of the imported gold is not used for production, these imported gold amounts are excluded from the calculation of GDP. Last week, a preliminary report showed a significant expansion of the US merchandise trade deficit, leading the Atlanta Federal Reserve to sharply lower its GDPNow forecast, intensifying concerns about the economic impact. Weak consumer spending in January was also one of the reasons for these concerns. Goldman Sachs economist Manuel Abecasis said, "The expansion of the trade deficit largely reflects the increase in gold imports, which are excluded from GDP because they are usually not consumed or used in production." Due to the distortion caused by gold imports in trade data, Abecasis believes that the conclusions drawn from the latest data points are too far-fetched. In a report on Thursday, Goldman Sachs updated its tracking forecast for first-quarter GDP growth to an annualized 1.3%, while GDPNow currently shows an annualized decline of 2.4%. The concentration of the expanding trade deficit has also raised questions about the extent to which importers were rushing to acquire foreign manufactured goods before tariffs were imposed by the Trump administration. The recent influx of gold imports into the US is mainly due to growing concerns that gold may be subject to extensive import tariffs in the US. Driven by safe-haven buying, gold futures prices in New York rose to $3,000 per ounce, far above the international benchmark. This price disparity created lucrative arbitrage opportunities for traders who signed to sell New York Mercantile Exchange futures contracts and committed to deliver physical gold. The premium between futures and spot prices was very high, exceeding $50 at one point, leading traders to rush to move gold from London vaults to New York, sparking a transatlantic gold rush. To highlight this frenzy, gold inventories at the New York Mercantile Exchange have increased by 121% since the end of November, reaching nearly 40 million ounces, the highest level since 1992. Most of the gold shipped to New York via courier comes from the largest physical gold trading center in the world - London. However, from the US trade data perspective, there has been an interesting change. Despite the physical gold shipped to New York vaults possibly coming from London, the US Department of Commerce's trade report shows that the quantity of goods imported from the UK is not that much. This is because in London, the standard is 400-ounce gold bars, so traders who need to deliver physical gold bars to the New York Mercantile Exchange must first ship the gold to Switzerland. There, refiners melt the gold and recast it into 100-ounce gold bars as required by the New York Mercantile Exchange. In January, imports from Switzerland to China soared by 68% to $23.8 billion, mainly due to gold imports, reaching the highest level since 1993. Since November, imports from this European country have more than doubled. Giovanni Stornovo, a commodity analyst for UBS in Zurich, said, "The reason for the surge in imports is Switzerland's position as the global gold refining center, the risk of US tariffs on gold, and general market uncertainty. With interest rates, stock markets, and geopolitical trends unclear, many investors see gold as a safe haven." In conclusion, behind the record high US trade deficit in January, the surge in gold imports is a significant factor, reflecting not only the demand for gold as a safe-haven asset in the market, but also closely related to the tariff policies of the Trump administration.