BOE says tariff premium is fueling clamor to withdraw gold
Thu Feb 06 2025
The rush to ship gold from London to the US to take advantage of premium prices is fueling strong demand for slots to withdraw metal from the Bank of England’s vault, an official said.
Worries that US President Donald Trump will impose tariffs affecting gold has led to premiums in the New York market and weeks-long queues to withdraw metal from the BOE. Bars at the central bank’s vault have also been trading at a discount to the wider market this week, as withdrawal delays make the gold at the BOE less attractive than bullion held in more accessible commercial vaults.
As commercial gold holders look to take advantage of the price differential, there has been robust demand for delivery slots, BOE Deputy Governor Dave Ramsden said at a press conference on Thursday.
“All of those bodies who ship the gold, they’ve all got the delivery slots they need over the next few weeks,” Ramsden said. “If you were coming in new to us, you might have to wait a bit longer because all the existing slots are booked up. But this is a very orderly process.”
Long delays to withdraw bullion — which is trading near a record high — are all the more problematic for traders at the moment, as they seek to avoid the risk of tariffs and capture premium prices by shipping their gold to the US.
The BOE plays a crucial role in the London gold market, the world’s largest bullion-trading hub. It maintains accounts for other central banks, which favor storing their gold in London where it can easily be lent out or sold. The BOE also allows selected commercial operators to hold gold accounts, to provide liquidity to central banks.
Ramsden said gold inventories held in the bank’s vault had only declined about 2% since the end of December.
“It’s an obvious point, but gold is a physical asset, so there are real logistical constraints and security constraints. You know getting into the bank for me this morning was a bit trickier because there was a lorry in the bullion yard,” he said. “It takes time and the stuff is also quite heavy as you know.”
Source: https://www.mining.com/