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The US banks are rapidly moving billions of dollars worth of gold from London banks to New York as they worry about a global trade war following President Donald Trump’s tariff threats against Europe.
This large amount of gold has doubled the US gold reserves since the US election, which has increased from $50 billion to $106 billion.
According to foreign media reports, the rapid transfer of gold is mainly due to Trump’s tariff threats, which have caused gold prices in London to fall by about $20 since December. Traders are also worried that Trump may impose tariffs on gold, which will increase demand for gold in the US.
According to the report, major banks such as JPMorgan and HSBC are moving gold from London to New York to cover their investment losses. Currently, the price of gold in New York is higher than in London. As a result, London is short of gold, and delivery times have gone from a few days to four to eight weeks, according to the Wall Street Journal.
The report said that last week, Trump announced a 25% import tax on steel and aluminum, raising fears that Trump would also impose tariffs on gold.
Deputy Governor Sir Dave Ramsden said that the Bank of England has received thousands of applications due to the wide gap between gold prices in London and New York. Gold futures in New York have risen 11% this year to $2,935 an ounce, with some experts predicting it could reach $3,000 an ounce. As a result, about 8,000 gold bars, worth about 2% of the Bank of England’s total gold reserves, have been moved out of its vaults in recent months.
The reports added that banks are taking advantage of the price difference between London vaults and Swiss refineries by extracting large quantities of gold. They then ship the gold to the United States, where it is used in futures contracts, allowing the banks to benefit from higher prices in New York.
