Online Reporter
Gold in the Bank of England vault is trading at a discount to the wider market, as fears over potential Trump tariffs spark a scramble for bullion that’s resulting in weeks-long queues to withdraw metal.
Dealers are quoting prices for gold at the BOE at discounts of more than US$5 an ounce below spot in London, according to people with direct knowledge of the situation.
The size of the divergence is extremely unusual, with gold at the BOE usually trading in lockstep with prices in the rest of the London market, where bullion changes hands in vaults a few minutes’ drive away run by JPMorgan Chase & Co, HSBC Holdings Plc and others.
Previous premiums and discounts — driven by central bank trading activity — have generally been no more than a few tens of cents per ounce, traders said.
The disconnect comes as traders worldwide rush to get gold to the US ahead of the potential imposition of tariffs and to capture premium prices.
US President Donald Trump hasn’t targeted precious metals specifically as he ratchets up his trade war, but dealers are worried they could be included in blanket tariffs that he’s threatened.
With traders racing against the clock, staff at the Bank of England are struggling to keep up, and growing queues are making the gold in its vault less attractive than bullion held in more accessible commercial vaults around London.
The BOE didn’t immediately respond to a request for comment. The BOE holds more than 400 000 gold bars, worth over US$450 billion at current prices, largely on behalf of other central banks, but also for a few key gold dealers.
That’s only a portion of the more than 8 000 tonnes of gold stored in London, according to LBMA data, but much of that is owned by exchange-traded funds, central banks, and other investors who may not wish to sell. — Bloomberg.
