In a dramatic turn of events, the international gold price has surged to an astonishing $3000 per ounce, leading to an unprecedented movement of gold bars from London to the United StatesAs the market braces itself for potential changes in trade policies, analysts are closely monitoring the shifts that could reshape the landscape of gold trading.

Beginning November 7, 2024, the COMEX (New York Mercantile Exchange) experienced a meteoric rise in gold inventory, with stocks increasing from approximately 17.2 million troy ounces at the beginning of the month to a staggering 34.6 million troy ounces by early February 2025, marking an increase of over 101% within just three months.

The looming tariff concerns have triggered a notable outflow of gold, causing supply shortages in the London gold marketReports indicate a sharp rise in demand for gold withdrawals from the Bank of England, resulting in withdrawal wait times extending beyond four weeks.

Furthermore, the London Bullion Market Association (LBMA) revealed that as of January 2025, gold holdings in London’s vaults decreased by 1.74% compared to the previous month.

Specifically, by the end of January 2025, the amount of gold held in London vaults totaled 8535 tons—a reduction of 151 tons valued at $771.6 billion, equating to approximately 682,700 gold bars

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Simultaneously, silver holdings fell by 8.6% to 23,528 tons, worth $23.9 billion, or around 784,200 silver bars.

While this exodus of gold is evident, the operational activity within the London gold market remains robustIn January 2025, the average daily volume of over-the-counter trading reached a staggering $127.85 billion.

According to the LBMA, there is an awareness of the market's concerns regarding the U.S. potential tariff policyThey are actively collaborating with market infrastructure providers, participants, trade bodies, and regulatory authorities to keep an eye on the evolving situation and the scope of any potential tariffs.

This sudden spike in demand for gold has placed strain on the logistics and storage systems of the Bank of England, leading to increased costs for leasing gold and longer delivery times.

Currently, London holds the title of the world's primary hub for gold storage and deliveryJohn Reid, a senior market strategist at the World Gold Council, noted that the non-commercial nature of the Bank of England's vault makes it less efficient in responding to abrupt spikes in demandSome traders may consider transferring their holdings to commercial vaults which, despite the higher storage fees, could offer better logistical support.

Global Central Banks Continue to Accumulate Gold

In the face of market turbulence and policy uncertainty, central banks worldwide are persistently ramping up their gold purchases.