Gold Fleeing London for New York
GoldFinger1969
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Gold stockpiling in New York leads to London shortage - FT
Wait to withdraw bullion from BoE rises sharply as fears of Trump tariffs drive shipments to US / © Dario Pignatelli/Bloomberg
The wait to withdraw bullion stored in the Bank of England’s vaults has risen to between four and eight weeks compared with the typical few days.
A surge in gold shipments to the US has led to a shortage of bullion in London, as traders amass an $82bn stockpile in New York over fears of Trump administration tariffs.
The wait to withdraw bullion stored in the Bank of England’s vaults has risen from a few days to between four and eight weeks, according to people familiar with the process, as the central bank struggles to keep up with demand.
“People can’t get their hands on gold because so much has been shipped to New York, and the rest is stuck in the queue,” said one industry executive. “Liquidity in the London market has been diminished.”
The BoE declined to comment.
Since November’s US election, gold traders and financial institutions have moved 393 metric tonnes into the vaults of the Comex commodity exchange in New York, driving its inventory levels up nearly 75 per cent to 926 tonnes — the highest level since August 2022.
Total gold flows into the US could be far higher than the Comex numbers reflect, according to market participants, because there are likely to have been additional shipments to private vaults in New York owned by HSBC and JPMorgan. The two banks declined to comment.
Traders say the shipments are intended to avoid tariffs on bullion that some fear could be introduced by US President Donald Trump.
“There is a feeling that Trump could go across the board and impose new tariffs on raw materials coming into the US, including gold,” said Michael Haigh, head of commodities research at Société Générale. “There is a bit of a scramble among participants in the gold market to protect themselves.”
The shipments are also the result of higher prices on the futures exchange in New York than in the cash market in London. The unusual arbitrage opportunity has incentivised traders to send the metal across the Atlantic.
Trump has yet to spell out his trade policy and has not specifically mentioned a duty on bullion, although he has threatened to impose wide-ranging tariffs on US imports.
Gold prices have risen 5 per cent since the start of the year, and are just $30 shy of their all-time record of $2,790 per troy ounce set in October.
London and New York are two main global markets for trading, with most physical trading taking place in the UK, while the futures market is in the US.
Many market participants compare the current US gold rush with the situation during the Covid pandemic, when lockdowns and uncertainty over shipments of gold triggered a surge in stockpiling on Comex.
The BoE stores gold for third parties such as financial institutions, as well as for other central banks and the UK Treasury.
Comex gold inventories have shot up 36 per cent this month, with 244 metric tonnes of inflows — the highest monthly inflows since May 2020, at the peak of the pandemic. Traders said they needed access to gold to fulfil certain futures contracts, which allow the buyer to take physical delivery of gold.
“The movement of gold needed to make its way into New York, that is basically what has been driving ‘stockpiling’,” said Joe Cavatoni, market strategist at the World Gold Council. “That is leading a lot of people to say, ‘we want to get ahead of it’, and that is driving the futures market into a premium.”
However, Cavatoni said he was cautiously optimistic that the coming tariffs would most likely not apply to bullion. “We are not getting a sense from the rhetoric from the administration that it intends to go after the monetary metals,” he said.
Last week, June contracts for physical gold on Comex traded at a premium of up to $60 per troy ounce over the London price. The difference has since fallen back to $10 per troy ounce as traders have moved gold to New York.
https://www.ft.com/content/86a5fafd-603e-4ee1-9620-39b5f4465f53
Comments
sounds like london and ny price fixers are finally being attacked by the real market. Need more news like this to finally shred the paper price fixers.
Repetition of ignorance is ignorance raised to the power two.
Gold is $4,000/ounce in Canada. Plenty of countries are seeing a real need to own gold instead of fiat.
All PM's are getting more upside price and demand momentum worldwide. Lunar New Year buyers as well.
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ill stick with gold all day long, fwiw & jmo
LBMA Can't Deliver Gold as Supply-Chain Breaks
The Musical Chairs of Gold Supply
Bullion banks relied on a game of musical chairs, borrowing gold to meet short-term needs. But when enough chairs are removed—when buyers refuse to lease their holdings—banks are forced to compete for an ever-dwindling supply. That’s what’s happening now.
The LBMA is broken, is COMEX next?
My gold is no longer for sale.
Repetition of ignorance is ignorance raised to the power two.
about that FT article in the OP. . .
It's not about tariffs. There have been no tariffs on gold mentioned by the new president. Central bank buying spree is continuing and investors are now following suit.
"There is another major point which the FT conveniently ignores: global flows of physical gold out of London are almost entirely in an eastern direction, with the bulk of commercial physical gold eventually ending up in China by way of Switzerland."
Repetition of ignorance is ignorance raised to the power two.
Tariffs of 25% with Mexico and Canada may be inflationary for many US products. Depends on what tariffs will or will not be placed on Canada heavy crude oil that our refineries need for gasoline. If the 25% tariffs just announced also apply to Canada oil, our prices will go up. Inflation concerns help gold, even if the price gain recently is more related to central banks, which I also agree with.
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They said Canadian oil was not included but "could be". With Mexico I don't know about oil. Canada really needs us as a buyer of oil since they really can't ship or refine it.
Is the gold leaving the Comex? If so, is it going to China?
I knew it would happen.
Canadian, not U.S. !!??!!
I do believe that it's going higher but over time and thanks to supply/demand fundamentals. I am not interested in some Gamestop-like short squeeze involving "paper" vs. "physical." That could be a John Maynard Kenyes situation of the market being irrational longer than the folks who got it right can remain solvent.
I'm sticking with $3,000 by 2030 (probably conservative now) and $5,000 by 2035 (more likely from an original outside shot back in 2017 when I made the prediction).
You GM, being an expert in this field, can see what happens when you have demand doubling from big buyers every 7-10 years and flattish or (eventually) declining supply. THAT is when the old strangs like the paper vs. physical stuff may get torn up.
Of course, Canadian, but that is the point. Getting very expensive in many other countries to buy gold with their weakened currencies.
Physical gold in the world increases every year from mining (even if mining is at lower levels below peak), but currently the actual physical that is available to buy is becoming a bit scarcer. A lot more paper gold buyers are starting to see the advantage of owning the real thing and taking deliveries.
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Could they be looking at a scenario of high prices curing high prices?
Knowledge is the enemy of fear
Gold price increase in 2024
26% in USD
38% in CAD
42% in Japanese yen and Euro
Gold in USD is up 6.5% in 2025 already. At some point soon even foreign central banks will slow down their purchases again to see if they can buy at lower prices.
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Could they be looking at a scenario of high prices curing high prices?
If you are referring to gold, how would that work?
In the case of agricultural commodities, higher prices stimulate higher production, which hopefully results in lower prices as demand is satisfied.
In the case of gold, it takes years to generate higher levels of production, and even so - production levels won't rise nearly to the extent that the size of crops have the potential to increase in a shorter time frame.
In other words, for prices to fall, it appears that demand for gold would have to fall, which seems not to be the case at this moment.
I knew it would happen.
World gold council data up to 3rd quarter comparisons. The 4th quarter data is not released yet to get full year comparisons.
Gold mine production is hitting new all-time highs again. As 2024 progresses – and based on information from Metals Focus – it is increasingly likely that mine production will hit a new all-time high, surpassing the prior record of 3,658t set in 2018.
I expect 2025 to also hit a new record. The recent very high prices are really driving the mines to produce more. They will also make a lot of money as all-in sustaining costs are less than $1,500/ounce. Lower diesel prices help, too.
In Q3, mine production from four countries drove the increase in global output:
Canada (26% y/y): output was boosted by ramp-ups at the Coté and Greenstone Mines and production increases at existing mines including Brucejack and Detour Lake
Mexico (24% y/y): production increases were driven mostly by the resumption of operations at Newmont’s Peñasquito mine following last year’s strike
Indonesia (14% y/y): output rose as higher grade ore was accessed from Phase 7 of the Batu Hijau mine
Russia (5% y/y): high output from three operations drove the increase: Gross, where capacity was expanded; higher grade mining at Natalka; and a production ramp up at Malyutka.
China (-3% y/y): fall resulting from lower grade mining at several operations.
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@ Goldminers - overall, can you estimate the increase in worldwide production from '23 to '24?
If production increased more than say, 5% doesn't that underscore a significant increase in worldwide demand?
I knew it would happen.
Note the 4th quarter data is not available yet to give you documented annual numbers. Gold demand is still mostly jewelry, and investments, and demand is still a little under supply. In addition to mining, an additional 325-350 tonnes of gold supply comes from recycling every quarter.
My estimate of total supply from mines and recycling in 2024 will be 5,000 tonnes, and demand around 4,500 tonnes, which includes about 1,000 tonnes from central banks net purchases.
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not in the face of dwindling, available supply. Supply of futures contracts for gold is one thing. Supply of available for sale or lease real gold is another thing. As hands holding gold clench tighter, price will continue to rise.
Supply and demand will always determine the price of anything that is real. Paper promises? Not so much?
Repetition of ignorance is ignorance raised to the power two.
If demand isn't outstripping total supply, what is driving up the price?
Do you think that coho will be correct in suggesting that high prices will cure high prices for gold?
I knew it would happen.
fear is driving demand and price.
eventually but not as long as fear is driving prices. Check out the other thread's link where "The bank’s decision is part of a larger trend that has seen several institutions announce plans to deliver bullion against expiring contracts on CME Group’s Comex."
This means the COMEX vaults are running low and that many who normally trade today's "paper" for tomorrow's "paper" have decided they want to take physical delivery.
The casino is seeing a lot of chip cashing-in occurring. The players want out, not good for COMEX. Will reduce supply of available physical gold. This is what those of us who are against the paper pushing corrupt bullion bankers have been waiting for. Will it break the "bank?" Not likely but possible.
Repetition of ignorance is ignorance raised to the power two.
It will if folk ain't got no money. Suppose goes to $7000 next year...you gonna keep on buying? When that tiny little yellow flattened nugget costs $800 or an ounce is equal to 3 or 4 months rent....you really gonna keep on buying?
Or let's flip the coin....haha...would you sell if gold hit $7000 in the next or 2? Would others?
Knowledge is the enemy of fear
I'd dump it all at $7K brother. Oh, the eggs I could produce. #LIVIN. RGDS!!!!
The whole worlds off its rocker, buy Gold™.
BOOMIN!™
Suppose goes to $7000 next year...you gonna keep on buying?
Or let's flip the coin....haha...would you sell if gold hit $7000 in the next or 2?
It's all relative and always has been, for me. I'd be buying if I had extra funds, and I'd be selling if I needed liquidity for something else that I wanted to buy.
What I wouldn't be doing is keeping a lot of dollars in the bank.
I knew it would happen.
What do the "experts" say on this Paper vs. Physical situation ?
I would think if fireworks were likely we'd hear about it from traders....wealthy hedge fund owners.....gold mining CEOs....or bankers.
If someone is exposed, I would think they'd know about it, no ?
Normally, I'd agree but there's a persistent bid under gold. It made an ATH this week and hardly a peep (granted, the major news was AI and NVDA but still...
).
Unlike individuals, CBs will not likely buy Bitcoin or crypto for themselves or their governments. Just gold.
Gold tends to run many years when CBs are buying...and you have other Deep Pocket buyers (SWFs, hedge funds, endowments, The Rich, etc.) all accumulating.
Heard from an aquaintance from a private bank I worked at years ago...he knew I was into pre-1933 gold and Saints and wanted to pick my brain. Was always dismissive of gold (the right call, in retrospect) in the 1990's and 2000's...but he has some 9-figure HNW clients who want some so he's giving them what they want.
If gold went to $7,000 next year, depending on where stocks/bonds/inflation were, I'd probably SHORT the hell out of it.
Until they report quarterly results, we can't be sure they aren't "chasing ounces." That's been their problem in the past, as you are well aware, GM. Let's see if they have gotten religion like the oil company E&Ps.
Are they really $1,500, GM ? From what I have seen with cash costs in the $950-$1,200 range I would think $1,500 covers it -- but who knows ? Again, the declines in the stock prices the last few quarters/years indicate something doesn't add up. What do you think ?
Good charts, thanks !
What are you saying ? All COMEX trades are settled in cash and the clearing exchange makes sure margin and cash requirements are all in balance to make sure that no settlement problems like Drysdale Securities (look it up) takes place.
COMEX is also paid based on volumes traded, storage is minimal last I checked.
You seem to imply that a blow-up is likely to happen but gold has already risen sharply and everything works fine. If you or those you follow think something else will happen, please elaborate (and positions by banks like JPM are 99% for customers, they are NOT speculating with their capital as the regulators would crucify them for it).
I don't think that "paper gold" trading matters anymore than paper stock certificates trade instead of actual physical parts of a company.
Paper gold trading (spot price) is used as the base/starting point for calculating the price of all physical gold (including jewelry). Spot price, determined via paper trading on the futures exchange, plus premium dictates the price of ALL fabricated gold products.
Paper gold trading matters immensely. . . until the market for real gold says BS to the current price setting mechanism.
Repetition of ignorance is ignorance raised to the power two.
Investors with billions on the line every day disagree with you.