Amid concerns that U.S. President Trump may impose tariffs on gold, gold reserves in London's vaults hit a historic low in January with an outflow of 4.9 million ounces, marking the largest monthly decline since 2016. During this time, New York gold futures prices surged, widening the price gap with London spot gold, creating arbitrage opportunities and prompting gold traders to transport gold from London to New York.
The London Bullion Market Association (LBMA) stated that gold inventories fell by 151 tons in January, primarily due to significant flows to the New York market, with an outflow of nearly $14 billion worth of gold. The intensified tariff negotiations between the U.S. and Canada led to a spike in short-term borrowing costs for gold, resulting in unusually discounted gold stored in the Bank of England's vaults.
Moreover, not only the London market but also Asian markets are beginning to experience similar trends, with gold traders moving gold from places like Dubai and Hong Kong to the United States, mainly to capitalize on the high premium between U.S. gold futures and spot prices. Analysts at Citigroup believe that Trump might include gold in the tariff plans for all imported goods, but this possibility is relatively low.
Currently, global gold is rapidly flowing to the United States, with a decline in gold demand in some Asian markets.
