Trump’s looming tariffs on metal imports have triggered a gold rush to the United States. Meanwhile, borrowing costs for gold in London have surged. Could this signal a turning point for the global gold market?
Gold Moves from London to New York
The gold market is witnessing an unprecedented shift. While gold prices have soared to a record $2,845 per ounce, a tectonic transformation is happening behind the scenes: gold is flowing from London to New York in massive quantities. What might seem like a minor financial adjustment at first glance carries significant implications for the global gold trade.
The Trump administration’s threats of imposing tariffs on metal imports have sparked an urgent rush to bring gold into the United States. According to the Financial Times, gold inventories at the New York-based Comex futures exchange have surged by 88% since the presidential election. In contrast, London—traditionally the global hub for physical gold trading—is facing a supply squeeze. The cost of borrowing gold in the UK has skyrocketed from 2-3% to nearly 10% annually, with ultra-short-term lending rates climbing as high as 12%.
Reassessing Gold Reserves – A Potential Paradigm Shift
Some hedge funds speculate that the new U.S. administration might consider an unconventional move: re-evaluating the nation’s gold reserves. Currently, the U.S. Treasury accounts for its gold at a mere $42 per ounce—just a fraction of today’s market price of $2,800. Adjusting the valuation to reflect real market prices could inject substantial new funds into the federal budget.
Such a move would come at a pivotal moment. The Republican Party is weighing massive tax cuts, which could expand the national deficit by an estimated $5.5 trillion. With fiscal pressures mounting, revaluing gold reserves could offer a temporary financial lifeline.
As gold continues to migrate from London to New York, and as the U.S. government explores drastic fiscal measures, the global gold market could be on the verge of a historic transformation.
