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A significant surge in gold movements to the United States has triggered a severe shortage of bullion in London, as traders build an enormous $82bn stockpile in New York amid growing concerns over potential Trump administration tariffs.
The Bank of England’s vaults are experiencing unprecedented delays, with withdrawal times extending from the usual few days to four to eight weeks, according to sources close to the operations. The dramatic shift has created a bottleneck in London’s gold market, traditionally a global hub for physical gold trading.
Since the November US election, gold traders and financial institutions have transported 393 metric tonnes into the Comex commodity exchange vaults in New York. This movement has propelled inventory levels up by nearly 75 per cent to 926 tonnes, reaching heights not witnessed since August 2022. Market participants suggest the actual gold flows into the US could be substantially higher, with additional shipments likely directed to private vaults owned by major banks HSBC and JPMorgan.
The primary driver behind this unprecedented movement appears to be widespread concern over potential tariffs on bullion imports under President Trump’s administration. The situation has created an unusual arbitrage opportunity, with higher prices on the New York futures exchange compared to London’s cash market, incentivising the transatlantic movement of physical gold.
Gold prices have demonstrated remarkable strength, climbing 5 per cent since the year’s beginning, hovering just £30 below the all-time record of £2,790 per troy ounce established in October. The current scenario draws parallels to the Covid pandemic period, when lockdowns and supply chain uncertainties prompted similar stockpiling behaviour.
The World Gold Council maintains a cautiously optimistic outlook, suggesting that monetary metals might be spared from potential tariff implementations. However, the unprecedented movement of gold continues to reshape market dynamics, with June contracts for physical gold on Comex recently trading at significant premiums over London prices, though this gap has narrowed as more gold reaches New York’s shores.
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