Gold Reserves Surge 151% at Comex Amid Tariff Fears

The recent surge in gold imports to the United States has led to a significant increase in gold reserves at the New York Commodity Exchange (Comex). Analysts and traders attribute this phenomenon to the potential impact of import tariffs, which could reduce the volume of goods shipped to the U.S. from other countries. The latest data from Comex reveals that the gold stored in its U.S. warehouses has reached 43.3 million ounces, valued at $135 billion. This figure represents a substantial increase from the 17.1 million ounces recorded when Trump was elected as the U.S. President in November 2016.

The price of spot gold has also seen a remarkable rise, breaking through the $3,100 per ounce mark on Monday and reaching approximately $3,145 per ounce. This surge follows a 27% increase in 2024 and a 19% rise so far this year. The influx of gold into the U.S. has shown signs of slowing down recently, but industry insiders report that gold continues to be transported to the U.S. in anticipation of Trump's announcement of a comprehensive tariff plan, dubbed the "liberation day," scheduled for Wednesday.

A source from a Swiss refinery, the world's largest gold refining and transit center, stated that gold is still being shipped to the U.S. on a near-daily basis. Between December 2023 and March 2024, approximately 25.4 million ounces of gold, valued at $79 billion, were delivered to Comex due to the widening price differential between Comex futures and London spot prices, driven by the risk of U.S. import tariffs.

The rapid transportation of gold by air highlights the significant market disruptions caused by uncertainty, leading to pricing and physical supply mismatches. Currently, Comex's gold reserves are equivalent to five years' worth of U.S. gold consumption, estimated at 8.8 million ounces annually by the French bank BNP Paribas.

Adrian Ash, head of research at BullionVault, expressed skepticism about the possibility of gold being exported from the U.S. in the near future. However, if gold is exempted from U.S. import tariffs, the market dynamics could shift, potentially leading to a reversal of the current trend. Ole Hansen, head of commodity strategy at Saxo Bank, suggested that if this exemption is confirmed, some gold bars might return to London, which remains a major hub for physical gold trading.

In London, the global hub for over-the-counter gold trading, the impact of New York's gold influx has been mitigated by the market borrowing gold from various central banks and storing it in the Bank of England's vaults. This has improved liquidity and absorbed the shock of New York's gold supply. According to three informed sources, the waiting time for withdrawing gold from the Bank of England's vaults has decreased from 4-6 weeks in January to 2-3 weeks. The Bank of England declined to comment on this matter.

The London Bullion Market Association reported that as of the end of February, London's gold reserves stood at 8,477 tons, still six times higher than Comex's gold reserves. Analysts note that the price discovery process continues to occur in London.