Gold Market Strains: London Vaults in High Demand
January 29, 2025 at 6:40 PM GMT+0

Gold Market Strains: London Vaults in High Demand

In a recent twist in the global bullion trade, London bullion market players are vying to borrow gold from central banks amid a notable surge in gold deliveries to the United States, driven by speculation about potential import tariffs, as reported by Mining.com. This scramble has led to unprecedented waiting times for withdrawing gold from the Bank of England, stretching up to four weeks compared to the usual timeframe.

With US President Donald Trump not explicitly targeting precious metals in his tariff plans, the voluminous movement of gold to New York is reflective of market strategies hedging positions on the US COMEX exchange. A notable subsector also seeks to capitalize on the COMEX futures price premium over London spot prices. Consequently, the Bank of England has faced increased pressure, as it is not operationally equipped to accommodate the high demands of gold borrowing central banks.

Data from the IndexBox platform shows that over the past two months, 12.2 million troy ounces of gold have been dispatched to COMEX-approved warehouses, causing stocks there to soar by 70% to 29.8 million ounces — marking the highest level observed since August 2022. This has depleted the Loco London free float, reducing the supply of available gold in London, which is critical for traders operating in the world's largest over-the-counter gold market.

Experts Weigh In on the Strain

According to industry veteran Robert Gottlieb, "The key with the BoE is that they are not a commercial vault so not prepared to handle the onslaught of gold borrowing banks are requesting from the central banks." This situation has piqued the interest of the British parliament's Treasury Committee, with questions raised about potential risks, to which BoE Governor Andrew Bailey responded by emphasizing that the current scenario lacks significance for policy as London remains a central hub for gold trade.

Liquidity strains are not confined to London; they are felt globally. Alexander Zumpfe, a trader at Heraeus Metals, highlighted the logistical challenges associated with transporting significant gold volumes, especially from Europe to the US, and noted knock-on effects even reaching markets in Asia like Singapore and Hong Kong.

Source: IndexBox Market Intelligence Platform

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  2. 2. EXECUTIVE SUMMARY

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  3. 3. MARKET OVERVIEW

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    1. EXPORTS FROM 2012–2024
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  12. LIST OF TABLES

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    3. Market Value, 2012–2024
    4. Per Capita Consumption, By Country, 2018–2024
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    8. Import Prices, By Country Of Destination, 2012–2024
    9. Exports, In Physical Terms, By Country, 2012–2024
    10. Exports, In Value Terms, By Country, 2012–2024
    11. Export Prices, By Country Of Origin, 2012–2024
  13. LIST OF FIGURES

    1. Market Volume, In Physical Terms, 2012–2024
    2. Market Value, 2012–2024
    3. Consumption, By Country, 2024
    4. Market Volume Forecast to 2030
    5. Market Value Forecast to 2030
    6. Products: Market Size And Growth, By Type
    7. Products: Average Per Capita Consumption, By Type
    8. Products: Exports And Growth, By Type
    9. Products: Export Prices And Growth, By Type
    10. Production Volume And Growth
    11. Exports And Growth
    12. Export Prices And Growth
    13. Market Size And Growth
    14. Per Capita Consumption
    15. Imports And Growth
    16. Import Prices
    17. Production, In Physical Terms, 2012–2024
    18. Production, In Value Terms, 2012–2024
    19. Production, By Country, 2024
    20. Production, In Physical Terms, By Country, 2012–2024
    21. Imports, In Physical Terms, 2012–2024
    22. Imports, In Value Terms, 2012–2024
    23. Imports, In Physical Terms, By Country, 2024
    24. Imports, In Physical Terms, By Country, 2012–2024
    25. Imports, In Value Terms, By Country, 2012–2024
    26. Import Prices, By Country, 2012–2024
    27. Exports, In Physical Terms, 2012–2024
    28. Exports, In Value Terms, 2012–2024
    29. Exports, In Physical Terms, By Country, 2024
    30. Exports, In Physical Terms, By Country, 2012–2024
    31. Exports, In Value Terms, By Country, 2012–2024
    32. Export Prices, 2012–2024

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