Plane packed with gold, thousands of tons shipped to the US

A large amount of physical gold is shipped from London to New York, around 2,000 tonnes in December, according to Greg Frith, head of precious metals trading and trading for North America and EMEA at StoneX Group.

“ Most transatlantic flights of logistics service providers are full. It is not possible to put more gold on the plane because they are booked for the next 2-3 months ,” he said.

One cost issue is the contract difference for physical delivery. While the purity standards are the same between the two markets, the weight of the gold bars is not.

In London, the OTC gold market is typically backed by a 400-ounce gold bar. Now they have to take that bar, refine it at a Swiss refinery or any refinery approved by the London Bullion Market Association (LBMA), and ship it across the Atlantic to New York, where they trade only in 100-ounce bars or bars of 99.99% gold.

Gold refineries around the world , including Metalor in Singapore, Valcambi, Argor-Heraeus in Switzerland, and Asahi and Metalor in the US, are all overloaded due to the surge in demand, Frith added. Customers are having to wait six weeks or longer.

The race to bring gold to the US. (Photo: Kitco)

The result is a short-term gold shortage as US futures traders try to de-risk their physical gold holdings due to tariff concerns.

Many Comex futures short sellers are trying to accumulate as much physical inventory as possible ahead of potential tariffs, said Greg Frith.

“ Nobody really knows if gold will be taxed. Gold probably won’t be taxed because it’s a monetary asset in the United States. Everyone expects gold to be tax-free. But in the current environment that we’re seeing with the Trump administration, anything is possible, ” he said.

Shipping tons of gold bullion into the US in advance was a smart move, but it created a shortage in London.

According to data from the London Bullion Market Association, precious metal reserves here have decreased for three consecutive months. In January, gold reserves decreased by 1.7% compared to December.

Since President Trump won the election last November, US gold futures have surged compared to other markets, creating opportunities from the price difference, helping investors move large amounts of gold bullion into the US.

The trading session on March 13 in the New York market witnessed a historic turning point when the spot gold price, according to Kitco, jumped to 2,989 USD/ounce, the highest ever.

Goldman Sachs, JP Morgan... predict that gold prices will soon reach $3,000/ounce, or even $3,100 in the next few weeks if trade and geopolitical tensions do not cool down.

(Source: Vietnamnet)

Link: https://vietnamnet.vn/may-bay-chat-kin-vang-hang-nghin-tan-duoc-chuyen-den-my-2380878.html

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