As per reliable reports, amid global trade uncertainties, the US has been moving billions of dollars’ worth of gold from London to New York.
Unlike copper and silver, gold is scarce in the earth’s crust, making it inherently more precious. Its exceptional durability and resistance to tarnish and corrosion ensure that gold retains its luster and appeal over time, unlike silver, which can tarnish, or copper, which can corrode. The recent surge in getting gold back to the country has doubled America’s yellow metal inventories since Election Day. Currently, the US now holds around $106 billion in gold, up from $50 billion on November 5.
Fears of potential tariffs under Donald Trump‘s trade policies have triggered a surge in gold demand across the US, causing prices in London to drop by approximately $20 since December. Traders are increasingly concerned that Trump may extend import duties to gold, further driving up domestic demand for the precious metal.
In response, major financial institutions like JPMorgan and HSBC are airlifting gold across the Atlantic to offset short-position losses. Much of this gold is landing in New York City, where it currently holds a higher value than in London, according to The Wall Street Journal. This shift has led to a severe supply crunch in London, with delivery times stretching from a few days to as long as 4-8 weeks.
Panic ensues after tariffs
The panic escalated last week after Trump announced a 25% tariff on steel and aluminum, fueling speculation that similar measures could soon target gold. The Telegraph cited Bank of England Deputy Governor Sir Dave Ramsden, noting that around 8,000 gold bars—2% of BoE’s reserves—have left its vaults due to a price gap between London’s cash market and New York’s futures market.
With New York gold futures rising 11% to $2,935 per troy ounce, some analysts predict it could hit $3,000. Banks are capitalizing on this price disparity by withdrawing gold from London and Swiss refineries, delivering it into US futures contracts. JPMorgan alone plans to transport $4 billion worth of gold this month.
In India, In 2021, Gold prices saw some correction, dipping below ₹50,000 per 10 grams, but these have generally remained robust due to ongoing economic uncertainties and inflation concerns. Gold demand in India witnessed a 5% on-year rise at 802.8 tons in 2024 supported by reduction in import duty, and purchases related to weddings and festivals, and going ahead consumption of the yellow metal in 2025 is likely to be between 700-800 tons, according to the World Gold Council.
Despite the revision of November numbers, the country spent a record $47 billion on gold imports in the first 11 months of 2024, surpassing the $42.6 billion spent during the whole of 2023, as gold prices jumped to a record high, the data showed.
Gold, a preferred choice for the investor?
Gold is not only an investment avenue but is considered precious in India. The yellow metal symbolizes wealth, prosperity, good health, and wealth. Gold has been and will be the holy grail for the people of India in terms of jewelry and investment. India is considered one of the largest markets for gold, and thus, the Indian gold market plays a significant role in the global economy of gold.
While gold is the first choice for jewelry among Indians, investors consider some other forms of it as a safe haven such as gold coins, bars, gold ETFs, etc. Buying gold during some of the Indian festivals such as Dhanteras, Akshay Tritiya, and Diwali are considered auspicious and placed in high regard. Also, gold tops the list when it comes to shopping for Indian weddings; no wedding shopping list is considered complete without buying gold.
The best thing about buying gold is that it can act as a hedge against inflation whenever there is a fall in the economy. Gold prices spike when there is a dip in the interest rates – which is directly proportional to economic strength. In the short term, gold prices can be sometimes volatile, but it has always given justice to its value in the longer run.
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Commencing teaching in his early twenties, Prof Aggarwal has diverse experience of great tenure in the top institutions not only as an educationist, administrator, editor, author but also promoting youth and its achievements through the nicest possible content framing. A revolutionary to the core, he is also keen to address the society around him for its betterment and growth on positive notes while imbibing the true team spirit the work force along with.
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