Financial encyclopedia

Recently, the spot gold price soared to a record high, exceeding $2,900 per ounce, but the market was even more shocked: a large amount of gold was flowing from London to the United States, which led to the Bank of England's gold withdrawal time being extended from a few days to four to eight weeks. This unprecedented physical gold migration is changing the supply and demand pattern of the global gold market. What exactly does this mean? How should investors respond?

American gold stocks soared, and London was in a hurry.

Since the US presidential election, the New York Mercantile Exchange's gold inventory has soared by 75%, exceeding 3.04 million ounces, with a total value of Comex $85 billion. At the same time, the stock of London gold has been greatly reduced, and the supply is tightening. The waiting time for market participants to withdraw gold has been extended from a few days to 1-2 months. Such changes used to occur only in times of economic crisis.

Two factors drive this gold migration tide.

Trump tariff doubt cloud

The market is worried that the new government's trade policy may affect the import and export of gold, leading investors to hoard gold in advance.

Expansion of arbitrage opportunities

The spread between Comex gold futures price and London spot gold has widened, and traders arbitrage by transporting gold from London to the United States, driving gold to the United States.

Three giants control Comex gold

At present, JPMorgan Chase, Brink's Co and HSBC hold more than 82% of Comex's gold reserves (more than 25 million ounces).

JPMorgan Chase's gold reserve has the fastest growth, indicating that Wall Street institutions are accelerating their gold hoarding and preparing for the market storm.

In the past, only the financial crisis or extremely loose monetary policy would trigger such a large-scale gold hoarding.

What does this gold rush mean?

The core driving force of this "American gold rush" is not a simple change in trade policy, but the market's uncertainty about the future of the global financial system. Both the financial giants in the United States and the central banks of various countries are accelerating the hoarding of gold to cope with potential market risks and changes in the monetary system.

How should investors respond?

In this battle for gold, the available supply of physical gold is rapidly decreasing, and the price of gold may continue to rise in the future.