Surge of Over 60 Tons of Gold Transported to Switzerland: What Is Driving the Rush?

Economic

Commodity

Summary:

Switzerland recorded a record import of 63 tons of gold from the United States in April 2025, driven by changes in U.S. tariff policies and global trading strategies amid heightened risk management....

Record Gold Imports into Switzerland Amid Changing U.S. Tariff Policy

In April 2025, Switzerland imported 63 tons of gold from the United States, marking the highest monthly volume since records began in 2012. This surge followed the U.S. decision to remove gold from its list of goods subject to import tariffs, according to Swiss customs data released on May 27. The policy change has significantly influenced global gold flows, prompting traders to adjust their strategies swiftly.

Switzerland, the world’s largest center for gold refining and transit, alongside the United Kingdom, home to the largest decentralized gold trading market globally, has seen a sharp increase in gold exports to the U.S. between December 2024 and March 2025. This trend reflects traders’ efforts to hedge risks amid fears of broader U.S. import tariffs on gold. The rapid movement of gold to Switzerland appears to be a strategic maneuver to avoid tariff exposure and maintain liquidity in the precious metals market.

Shifts in Swiss Gold Exports Reflect Market Realignments

While Swiss gold imports surged, total gold exports from Switzerland in April dropped by 31% compared to March. Notably, exports from Switzerland to the U.S. plunged from 103.3 tons in March to just 12.7 tons in April, highlighting a significant recalibration of trading flows. Conversely, exports to the United Kingdom increased, suggesting that some gold initially sourced from the U.S. is circulating back into London’s vaults via Swiss refineries.

Deliveries to traditional gold consumption markets such as India and China also showed slight increases compared to the previous month, though volumes remain below those seen in April 2024. This pattern indicates ongoing cautious demand amid global economic uncertainties but suggests that major consumption markets have yet to fully rebound.

The unprecedented gold movement into Switzerland underscores the evolving dynamics of the global precious metals market shaped by tariff policies and risk management considerations. As traders navigate shifting trade barriers and geopolitical tensions, Switzerland’s role as a central refining and redistribution hub remains pivotal. Market participants will likely continue to monitor these flows closely, as they provide early signals of broader economic and geopolitical trends impacting gold’s role as a safe haven asset.

Source: Reuters

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China–U.S. Trade War

Economic

China’s Expanding Role as Global Creditor

According to a May 27 report from Australia’s Lowy Institute, based on World Bank data, the poorest countries worldwide face a historic surge in debt repayments to China in 2025. Over the past decade, China aggressively financed infrastructure projects across Africa, the Pacific, and beyond through its Belt and Road Initiative, funding ports, railways, and highways. However, recent years have seen a sharp slowdown in new lending from Beijing. Instead, the volume of repayments flowing back to China now exceeds new loans extended, signaling a fundamental shift in China’s global financial role.

Debt Pressures and Developmental Impact

Riley Duke, a Lowy Institute researcher, highlights that developing nations are grappling with an immense wave of principal and interest repayments to China. By the end of the decade, China is expected to function more as a “global creditor” than a “banker” for the developing world. The report estimates that in 2025 alone, 75 of the poorest countries will owe China about $22 billion—the highest amount ever recorded. This transition reflects China’s net recovery of capital rather than expanding new lending.

This mounting debt pressure is forcing many countries to slash spending on critical sectors such as healthcare, education, and climate adaptation, hindering sustainable development goals. Moreover, private international creditors also contribute to rising debt burdens, exacerbating fiscal constraints and compelling austerity in many emerging economies.

Strategic Implications and US Aid Retrenchment

The report raises concerns that China could leverage its creditor status for geopolitical influence, especially as US foreign aid budgets contract. By deepening financial ties through debt, China might strengthen strategic partnerships with countries seeking infrastructure investment or economic recovery support. Such dynamics could reshape global alignments and influence spheres of power.

Despite an overall reduction in Chinese lending across most regions, exceptions include substantial new loans to Honduras and the Solomon Islands. Additionally, countries like Indonesia and Brazil have seen fresh credit agreements with China, primarily aimed at securing supplies of strategic minerals vital for battery manufacturing and renewable energy technologies.

China’s evolution into a dominant global creditor marks a significant transformation in international finance, coinciding with diminishing US development assistance. For the world’s poorest countries, the growing debt servicing demands present acute economic and social challenges, while offering China expanding influence through financial leverage. Policymakers and international institutions must closely monitor this emerging debt landscape to mitigate risks and support sustainable development.

Source: Lowy Institute

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Economic

Flexible Fiscal Policy Amid External and Domestic Challenges

Japan’s annual economic and fiscal policy guidelines, scheduled for release in June, will emphasize the government’s readiness to implement agile fiscal measures in response to ongoing economic uncertainties. A draft of these guidelines, obtained by Reuters, highlights that while Japan’s economy shows modest recovery, risks from U.S. tariff policies and elevated consumer prices require careful monitoring. The government is leaving open the option of compiling a supplementary budget later this year, contingent on economic and price trends.

Balancing Fiscal Discipline with Policy Flexibility

The draft guidelines assert that maintaining fiscal discipline should not restrict the government’s capacity to act swiftly when economic conditions warrant. This approach reflects a pragmatic balance between long-term fiscal responsibility and short-term economic support, signaling a willingness to deploy stimulus measures if necessary to counteract inflationary pressures and trade-related headwinds.

Japan’s government reiterates its expectations that the Bank of Japan (BOJ) will attain its 2% inflation target in a sustainable and stable way. The draft underscores the importance of appropriate monetary policy responses aligned with evolving economic, price, and financial conditions. This coordinated fiscal-monetary approach aims to support a stable transition toward a growth model driven by wage increases and capital investment.

Focus on Wage Growth and Growth-Oriented Economy

The guidelines highlight the government’s commitment to mobilizing all available tools to promote wage growth, which is viewed as central to fostering a resilient and investment-led economic expansion. By focusing on higher wages, the government seeks to underpin domestic demand and reduce vulnerabilities from external shocks such as tariff tensions.

The Council on Economic and Fiscal Policy (CEFP), a key advisory panel, is scheduled to meet on June 5 to discuss the draft guidelines, with final approval expected on June 13. These discussions will shape the fiscal framework guiding Japan’s policy response during a period of significant global economic uncertainty.

Japan’s forthcoming policy guidelines articulate a cautious yet proactive stance—embracing fiscal flexibility to respond swiftly to inflation and external trade pressures while maintaining a commitment to fiscal responsibility. This approach reflects the government’s recognition of the delicate balance required to sustain economic recovery amid global challenges.

Source: Reuters

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Economic

Forex

The Shift in Asian Capital Flows

For decades, Asia’s export powerhouses relied on a straightforward strategy: sell goods to the US and reinvest proceeds in American assets. This model, which fueled extraordinary growth, now faces its biggest disruption since the 2008 global financial crisis, largely triggered by President Donald Trump’s "America First" policies during his second term.

Asian investment in the US totals approximately $7.5 trillion, but a notable capital withdrawal has begun as major Asian investors seek safer havens amid uncertainty. April alone saw Taiwanese insurers report $620 million in losses due to the US dollar’s sharp decline following tariff impositions. Soon after, the New Taiwan dollar surged 8.5% over two days, risking $18 billion in currency valuation losses for investors exposed to exchange rate fluctuations.

Capital Outflows Accelerate

Even before Trump’s re-election, capital flows from Asia to the US were showing signs of slowing. Now, pension funds, financial institutions, and family offices are either reducing or freezing US investments. China has notably scaled back its holdings of US Treasury bonds, while Japan—the largest foreign US investor—is considering portfolio diversification.

Virginie Maisonneuve of Allianz Global Investors highlights a shifting world order, emphasizing that the rise of China’s economic and technological power has weakened the US’s absolute dominance. This geopolitical evolution is contributing to the reallocation of capital.

Risks Undermining US Asset Appeal

Asian investors are increasingly concerned about escalating US budget deficits, political polarization, deteriorating infrastructure, and the US dollar’s use as a sanction tool internationally. The Trump administration’s push for tax cuts has amplified fiscal prudence worries, culminating in Moody’s downgrade of the US credit rating. Stephen Jen, CEO of Eurizon SLJ Capital, warns that Asia’s capital withdrawal could trigger a $2.5 trillion shift in global investments.

Such capital flight is expected to weaken the dollar substantially, while European and Japanese stock markets benefit, and funds flow into debt markets in Australia, Canada, and other developed economies.

Currency Market Turbulence

Taiwan’s dramatic currency surge in May was spurred by rumors of demands to appreciate the New Taiwan dollar amid US trade talks, marking the currency’s largest rise since the 1980s. Insurers heavily invested in US Treasuries suffered major losses due to unhedged currency risk, potentially totaling tens of billions.

South Korea’s won also spiked amid US monetary negotiations news, whereas the yen weakened as Japan denied discussions of monetary policy coordination with the US Treasury. This synchronized currency volatility is unsettling global investors.

Capital Redirected to Asia and Alternatives

Investment interest is shifting to Japan, Europe, and India, with foreign purchases of Japanese equities and bonds hitting record highs in April. Leading Asian investment funds acknowledge that the "golden era" of US investments may be ending. The ultra-wealthy in Asia increasingly prefer gold, cryptocurrencies, and domestic Chinese assets over US dollar-denominated holdings.

Is the Dollar’s Reign Over?

While some experts view this as a temporary cyclical change, many asset managers are adjusting long-term strategies to reduce US dependency amid growing policy unpredictability. Deutsche Bank’s George Saravelos sees rising Japanese bond yields and yen strength as clear signs of an emerging trend. Gavekal Research anticipates Asia will rebalance toward domestic consumption and macroeconomic realignment, moving away from a US dollar export-led model.

Rajeev De Mello of GAMA Asset Management remarks that the world is witnessing the early pains of a new financial order—no longer debating if change will occur, but who will be next affected.

If current dynamics persist, the global financial landscape may be entering a critical turning point. The US dollar’s era as the uncontested global reserve currency could be peaking, ushering in a new age marked by capital returning to Asia, increased financial sovereignty ambitions, and a broader diversification of global risk.

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Economic

Forex

Yen Stability Reflects Market Caution Before Key Bond Auction

In early Wednesday trading, the Japanese yen hovered around 144.345 per dollar, showing minimal change after a sharp 1% drop the day before. The move came amid expectations that Japan might reduce issuance of its super-long bonds following a significant yield spike. Investor focus now turns to the upcoming auction of Japan’s longest-tenor government bonds, which is being viewed as a barometer of confidence in the country’s debt sustainability.

Bond yields in Japan have experienced notable volatility, with long-end yields hitting record highs last week after a disappointing 20-year auction. On Wednesday, yields edged higher again after a sharp drop in the previous session, reflecting persistent concerns about the country’s fiscal outlook.

Investor Sentiment and Policy Uncertainty

Analysts remain cautious about Japan’s fiscal trajectory, particularly ahead of the national elections in July. According to Charu Chanana of Saxo, demand for long-dated bonds may remain weak, regardless of auction outcomes, due to policy ambiguity from the Bank of Japan and fiscal pressures. For the yen, this translates to two-way risk: haven flows continue to support strength, while clearer trade policy signals from the U.S. could limit further gains.

So far in 2025, the yen has appreciated by nearly 9%, largely due to risk-off sentiment and the depreciation of the U.S. dollar under President Trump’s erratic trade policies. However, further upward momentum remains constrained by domestic yield pressures and global sentiment shifts.

U.S. Dollar Holds Firm on Economic Optimism

The dollar index held at 99.574, as the greenback maintained strength after a strong finish to the previous session. This was driven by better-than-expected consumer confidence data and the White House’s decision to delay EU tariffs, which temporarily eased trade tensions. The euro remained flat at $1.1325 after a previous 0.5% decline, while sterling traded at $1.3516, still near its three-year high despite fiscal concerns weighing on UK debt.

U.S. Treasury yields also climbed modestly, recovering from earlier declines linked to weak demand at recent auctions. Rising fiscal deficits in the U.S. have attracted scrutiny, especially following Moody’s downgrade of the U.S. credit rating and soft long-bond auction performance. These developments are reinforcing investor focus on sovereign debt sustainability across major economies.

Asia-Pacific Currencies Mixed Ahead of Rate Decisions

In the Asia-Pacific region, the Australian dollar remained subdued at $0.6443, one week after the Reserve Bank of Australia cut interest rates by 50 basis points. Meanwhile, the New Zealand dollar traded slightly lower at $0.5941, ahead of a widely anticipated 25 basis point rate cut by the RBNZ, reflecting global monetary easing trends.

As investors digest the complex interplay of domestic policy uncertainties, bond market volatility, and global fiscal risks, the yen’s steadiness masks deeper fragilities in Japan’s economic positioning. With long-dated bond yields under pressure and fiscal worries gaining traction globally, markets are entering a phase of heightened sensitivity where currency and bond movements reflect broader macroeconomic tensions. The upcoming bond auction in Japan may serve as a pivotal signal for both yen dynamics and investor confidence in sovereign debt markets.

Source: Reuters

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Economic

RBNZ Delivers Sixth Consecutive Rate Cut

On May 28, 2025, the Reserve Bank of New Zealand reduced its Official Cash Rate (OCR) from 3.5% to 3.25%, marking its sixth consecutive cut since mid-2024. This move reflects the central bank’s response to sluggish domestic growth and escalating external risks, despite inflation remaining within its target range of 1% to 3% at 2.5%. The decision aligns with market expectations and highlights the central bank’s proactive stance in shielding the economy from external volatility.

The RBNZ's updated projections signal a continued easing path, with the OCR forecast to decline to 2.92% by Q4 2025 and 2.85% by Q1 2026. However, the decision to cut was not unanimous—one of the five Monetary Policy Committee members voted to hold rates steady at 3.5%, suggesting some caution within the board. This division reflects a balancing act between maintaining policy flexibility and responding decisively to global and domestic pressures.

External Headwinds and Policy Response

Global economic uncertainty, particularly regarding U.S. trade policy and ongoing geopolitical tensions, has been weighing on New Zealand’s export-dependent economy. Though the country emerged from its 2024 recession, growth remains sluggish, exacerbated by fiscal constraints and weak consumer confidence. The RBNZ emphasized that these global dynamics are impacting local demand and justifying continued monetary support.

Following the rate cut, the New Zealand dollar remained relatively stable, indicating that financial markets had already priced in the move. Analysts expect at least one more rate cut later this year, provided inflation continues to moderate and external risks persist. The central bank’s dovish tone reinforces the expectation that monetary policy will remain accommodative for the foreseeable future.

New Zealand’s latest rate cut underscores the Reserve Bank’s commitment to supporting economic stability amid a fragile global environment. While inflation is currently under control, the RBNZ is prioritizing growth and resilience, preparing to take further action if needed. This signals a clear shift toward more aggressive monetary easing to buffer the economy against mounting international headwinds.

Source: Reuters

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Economic

An Overcrowded Market Reaches a Breaking Point

The Chinese auto industry, already the world’s largest by volume, is reaching a critical stress point. BYD, one of the country's top electric vehicle (EV) makers, recently slashed prices across over a dozen models, including its entry-level Seagull, now priced at just 55,800 yuan ($7,765)—a sharp drop from nearly $10,000. This move signaled a deeper shift in pricing dynamics and set off alarm bells across the industry.

The price war, which has been intensifying over the past three years, has led to a fierce race to the bottom. Many automakers, especially startups and niche players, are facing unsustainable financial pressure. Tu Le of Sino Auto Insights described the current trajectory as a “bloodbath in the making,” pointing to companies like Neta and Polestar that may not withstand another wave of markdowns.

Investor Confidence Drops as Market Volatility Rises

The market’s response has been swift. BYD’s shares plunged by 8.6% in Hong Kong, while Geely dropped 9.5%. Other EV stocks such as Nio and Leapmotor recorded declines between 3% and 8.5%. These losses reflect growing investor anxiety about deteriorating margins and the long-term viability of smaller players. The comparison made by Great Wall Motors’ chairman between the current state of China’s car industry and the collapse of property giant Evergrande further underscored the gravity of the situation.

Adding to the market strain is the growing trend of labeling unsold new cars as “used” to artificially boost sales numbers and meet aggressive sales targets. According to sources reported by Reuters, this practice is now under investigation by Chinese regulators, indicating that the industry’s problems are attracting state attention and may trigger more regulatory interventions.

Structural Weaknesses and Supplier Risks

Wei Jianjun, chairman of Great Wall Motors, has been vocal about the systemic risks to the supply chain. He highlighted that price reductions of up to 100,000 yuan on some models are jeopardizing supplier sustainability and undermining product quality. As manufacturers push for ever-lower prices, suppliers are being squeezed, increasing the likelihood of bankruptcies within the broader automotive ecosystem.

China currently has 169 automakers, yet more than half of them control less than 0.1% of the market share. The resemblance to the early U.S. auto industry, when consolidation followed an era of excess competition, suggests a similar correction may be imminent. However, despite years of predictions about consolidation, the sector has only grown more fragmented as tech giants like Xiaomi and Huawei continue to enter the fray, bringing fresh capital and competition.

Shifting Consumer Expectations and Shrinking Margins

The erosion of pricing power has been accelerated by a rapid commoditization of advanced vehicle features. Technologies like driver-assist systems, once premium offerings, are now bundled into base models. This shift narrows profit margins further and makes it harder for companies to differentiate based on innovation alone. Competitive advantages are diminishing, forcing automakers into a volume-based strategy that few can survive without scale.

China’s central planners have taken note. A recent warning from state authorities cautioned that overly aggressive pricing, especially selling below cost, risks distorting market competition and threatening industry sustainability. This signals a possible policy pivot aimed at restoring order and fairness in the marketplace, though how such guidance will be enforced remains uncertain.

The current pricing spiral in China’s auto industry reflects more than just competitive zeal—it signals a structural challenge rooted in overcapacity, regulatory gaps, and unsustainable business models. While BYD’s price cuts may push some firms out of the market, they could also catalyze another wave of entrants, further crowding an already saturated space. Without decisive consolidation and regulatory realignment, the industry risks prolonged instability where short-term market share comes at the cost of long-term resilience.