A significant surge in gold shipments to the United States has precipitated a notable shortage of bullion in London, as traders amass substantial stockpiles in New York amid concerns over potential tariffs from the Trump administration. This movement has led to increased waiting times for withdrawing gold from the Bank of England’s vaults, extending from a few days to between four and eight weeks.
Since the U.S. elections in November, approximately 393 metric tonnes of gold have been transferred to New York’s Comex commodity exchange, elevating its inventory levels by nearly 75% to 926 tonnes—the highest since August 2022. Market participants suggest that total gold flows into the U.S. could be even higher, considering additional shipments to private vaults owned by institutions like HSBC and JPMorgan.
The primary driver behind this shift is the apprehension that the U.S. administration might impose new tariffs on raw materials, including gold. Michael Haigh, head of commodities research at Société Générale, noted, “There is a feeling that Trump could go across the board and impose new tariffs on raw materials coming into the U.S., including gold. There is a bit of a scramble among participants in the gold market to protect themselves.”
Additionally, higher prices on the futures exchange in New York compared to the cash market in London have incentivized traders to redirect the metal across the Atlantic. This arbitrage opportunity has further strained London’s bullion supply, leading market players to seek borrowing gold from central banks to meet demand. The Bank of England’s minimum waiting time for releasing gold has now reached four weeks, a significant increase from the usual few days or a week.
The depletion of readily available gold in London has raised concerns about liquidity in the global gold market. Alexander Zumpfe, a precious metals trader at Heraeus Metals, highlighted that while liquidity challenges are more pronounced in London, they are being felt globally, with notable effects in Asia, particularly in markets like Singapore and Hong Kong.
Despite these developments, some industry experts remain cautiously optimistic. Joe Cavatoni, market strategist at the World Gold Council, expressed hope that forthcoming tariffs might not apply to bullion, stating, “We are not getting a sense from the rhetoric from the administration that it intends to go after the monetary metals.”
As the situation evolves, the global gold market continues to monitor policy decisions and market dynamics closely, given their significant implications for bullion distribution and liquidity.
Whether it’s a good time to sell gold depends on several factors, including current market prices, future price expectations, and your personal financial goals. Here are a few key considerations:
Reasons to Sell Now
High Prices – Gold prices have been elevated due to strong demand, geopolitical uncertainty, and central bank buying. If you’re holding gold for profit, this could be a good time to cash in.
Liquidity Issues in London – The recent shortage of bullion in London suggests strong demand, which could push prices higher in the short term. However, if you’re based in the UK, local supply constraints might make it an attractive time to sell.
Potential U.S. Tariffs on Gold – Concerns about tariffs under a possible Trump administration have driven a rush to move gold to the U.S. If tariffs are introduced, they could impact gold flows and pricing.
Reasons to Hold
Potential for Higher Prices – If market uncertainty continues, gold could see further gains. The Federal Reserve’s interest rate decisions, inflation trends, and geopolitical events could all influence prices.
Gold as a Hedge – If you’re holding gold as a long-term hedge against inflation or economic instability, it may be wise to keep it rather than selling now.
Central Bank Demand – Many central banks are still increasing their gold reserves, which could support long-term price strength.
Final Verdict
If you need liquidity or want to take advantage of current high prices, now could be a good time to sell. However, if you believe gold has more upside potential or you’re using it as a hedge, holding onto it might be the better option.
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