WASHIGNTON: Thousands of gold bars have been moved from the Bank of England’s vaults in recent months, as financial institutions react to concerns over potential US tariffs under President Donald Trump, The Independent reports.
The Bank of England, which holds one of the world’s largest gold reserves, has seen a significant outflow of bullion. According to The Independent, roughly 8,000 gold bars—about two percent of its total stock—have been transported to New York.
The primary reason for this shift is the growing gap between gold prices in London and New York. “New York’s futures market prices have surged above the London cash price,” said Sir Dave Ramsden, Deputy Governor of the Bank of England, as quoted by The Telegraph.
JPMorgan and HSBC, two major financial players, have been leading the shipments, The Wall Street Journal reports. These banks frequently lend gold to borrowers who use it as collateral while hedging against price drops by selling futures in New York.
In February alone, JPMorganChase is expected to deliver more than $4 billion in gold against futures contracts in New York, according to Comex filings. Since Trump’s election victory over then-Vice President Kamala Harris, US gold inventories have doubled.
Some analysts predict gold prices could soon reach a record $3,000 per troy ounce. “Banks are capitalising on an emerging arbitrage opportunity,” The Independent notes, with gold currently more valuable in the US than in the UK.
Gold is first transported in high-security vans to airports, before being sent to Swiss refiners. There, the metal is recast to meet Comex contract specifications before being flown to the US Commercial flights are used as the most cost-effective transport option.
With Trump already imposing a 25 percent tariff on steel and aluminium imports, investors are wary that similar measures could target gold. This fear is further driving the shift in bullion holdings from London to New York.
Agencies