U.S. Gold Rush Squeezes London’s Precious Metal Market

A surge in U.S. gold demand has significantly impacted London’s gold lending market. Prices have risen over 8% this year due to fears of a global trade war.

Gold stocks in New York’s Comex have increased by 88% since November’s election, leading to a scarcity in London. Traders are rushing to secure gold before potential U.S. tariffs materialize.

Users report delays of several weeks when trying to withdraw gold from the Bank of England’s vaults. The cost to borrow gold for a week has jumped to an annualized rate of about 10%, up from the usual 2% to 3%, as per the World Gold Council (WGC).

John Reade, WGC‘s chief market strategist, notes, “There’s more gold in the U.S. than there should be under normal circumstances, and less in London.” This imbalance has disrupted the market and raised borrowing costs.

Gold Market Trends

Typically, commercial banks, refineries, jewelers, and manufacturers borrow gold to avoid the expenses of purchasing and storing it outright. Gold prices have broken records repeatedly this year, climbing another 0.59% yesterday to a new peak of $2,893 per troy ounce.

Philip Newman from Metals Focus reports that overnight gold leasing rates have spiked to 12%. He warns, “Leasing rates are well above normal levels and likely to remain volatile.”

Concerns over U.S. tariffs have driven a gold rush to New York, capitalizing on higher domestic gold bar premiums. Despite this, Ruth Crowell from the London Bullion Market Association assures that “liquidity and gold stocks remain solid” in London.

However, she acknowledges the challenges presented by U.S. market premiums. The World Gold Council’s annual trends report predicts another record year for gold demand, driven by central

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