A notable shift is taking place in the global gold market as worries about possible tariffs linked to the upcoming U.S. administration have prompted a large movement of gold from London to New York.
Central banks and other depositors who rely on the Bank of England for secure storage have reported longer processing times for gold withdrawals. Where requests once cleared in a few days, processing now often takes as long as four weeks, reflecting growing operational pressure on custody services.
This relocation of metal has coincided with a surge in inventories on the New York Commodity Exchange (COMEX). Over the past two months, COMEX warehouse stocks climbed roughly 70%, bringing totals to about 29.8 million ounces — the highest levels recorded since August 2022. Such accumulation indicates a concentrated buildup of physical metal in U.S. facilities.
As bullion moves westward, available free-float metal in London has tightened. The London over-the-counter market, historically the world’s principal center for gold trading, depends on a fluid supply of deliverable metal to support liquidity and settlement. With that pool depleted, traders and refiners increasingly turn to gold leases from central banks and other large holders to meet settlement needs and sustain market functioning.
The change in storage and flows highlights several broader market implications. First, shifting custody destinations can alter regional liquidity conditions, affecting premium/discount dynamics between spot, futures and physical markets. Second, longer withdrawal processing times and concentrated holdings increase counterparty and operational risk for participants who rely on rapid access to allocated metal. Third, the relocation may influence pricing and delivery mechanics in both London and New York as participants adapt to different settlement conventions and infrastructure.
Market participants are responding in a variety of ways: some firms are increasing their physical inventories in New York to ensure availability for domestic demand; others are negotiating temporary lease agreements or using alternative financing structures to bridge short-term tightness in London; and custodians are adjusting staffing and logistics to handle higher volumes and longer lead times.
While geopolitical developments and trade policy uncertainty are driving much of this movement, the episode also underscores the structural fragility of global bullion logistics. Concentration of metal in a single region can create bottlenecks and raise the cost of transacting physical gold, particularly during periods of heightened demand or policy uncertainty. For market users and custodians alike, the current environment reinforces the importance of contingency planning and diversified storage strategies.
In the near term, observers will watch whether the flow of gold to New York stabilizes or reverses as policy risks evolve and as central banks manage their own holdings. Any sustained change in the balance of physical gold between major custody centers would have lasting effects on market liquidity, settlement practices and the functioning of both OTC and exchange-traded segments of the global gold market.
