Gold has long been a go-to asset for investors seeking stability in times of economic and geopolitical uncertainty. Its tangible nature offers a sense of security, making it a preferred hedge against inflation, trade tensions, and currency fluctuations. 

Recently, a sharp divergence in gold prices between London and New York has triggered a surge in physical gold transfers across the Atlantic. This movement is driven by rising U.S. demand, geopolitical concerns, and arbitrage opportunities. Financial strategists from VenturOmix explore the key factors behind this trend and its broader implications.

Why Is Gold Moving from London to New York?

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In normal market conditions, gold prices in London and New York remain closely aligned. However, 2025 has seen U.S. gold futures on the Comex exchange trade at a significant premium—sometimes over $50 per troy ounce—compared to spot prices in London. This price gap has incentivized traders and investors to shift gold from London to New York, where they can sell at a higher rate.

Since November 2024, Comex gold inventories have surged by over 20 million ounces, valued at approximately $60 billion. A substantial portion of this gold came from London, the world’s largest gold trading hub. Dealers are capitalizing on the arbitrage opportunity, mirroring a similar price dislocation that occurred in 2020 when supply chain disruptions during the pandemic allowed traders to make significant profits by moving gold to the U.S.

London’s Role as a Global Gold Hub

London is home to more than 8,500 metric tons of gold, stored in commercial vaults operated by global financial institutions as well as the Bank of England. This makes it the primary center for physical bullion trading. The Bank of England holds a significant portion of global gold reserves in its fortified underground vaults, providing storage for central banks, financial institutions, and investors.

Gold stored at the Bank of England is rarely moved, as it is considered a secure and cost-effective long-term holding. However, the urgency to take advantage of New York’s price premium has led to the largest outflow of gold from the Bank of England’s vaults since 2012.

Will London Run Out of Gold?

Despite the substantial withdrawals, London’s gold reserves remain strong. The Bank of England still holds around 420,000 bars of gold, making it the second-largest custodian of gold after the New York Federal Reserve. However, the high demand for withdrawals has created logistical challenges, causing delays in processing requests.

Unlike cash withdrawals from banks, removing gold from storage is complex. Each gold bar is allocated to a specific owner, meaning vault staff must locate and retrieve particular bars rather than simply releasing an equivalent weight of gold. This has led to waiting times and even minor discounts on London’s gold prices as traders anticipate delays.

How Difficult Is It to Transport Gold Internationally?

While gold is often transported in the cargo holds of commercial aircraft, moving large quantities internationally is not always straightforward. A key challenge lies in the differing gold bar standards. 

London’s gold market primarily deals in 400-ounce bars, whereas the Comex exchange in New York requires 100-ounce or 1-kilogram bars. This means that gold being transferred to the U.S. must first be refined and recast to meet Comex specifications, typically in Swiss refineries. The increased demand for refining services has created bottlenecks, adding further delays to gold shipments.

Additionally, insurers impose limits on the value of gold that can be transported on a single flight, further complicating the logistics of moving large quantities quickly.

Beyond Trade Fears: Other Factors Driving Gold Prices

While trade uncertainty has played a significant role in gold’s price surge, other forces are at work. Central banks, particularly in emerging markets, have been increasing their gold reserves to reduce reliance on the U.S. dollar.

This trend gained momentum following Russia’s 2022 invasion of Ukraine when Western nations froze Russian central bank assets. The move underscored the risks associated with holding foreign currency reserves, prompting several countries to diversify by accumulating gold. In 2024, central banks collectively purchased over 1,000 metric tons of gold for the third consecutive year. This sustained buying spree has contributed to price increases, leading analysts at financial institutions like Goldman Sachs to raise their year-end gold price forecast to $3,100 per ounce.

Conclusion

The surge in gold transfers from London to New York highlights the broader economic and geopolitical factors influencing precious metal markets. While trade tensions and tariff concerns have played a role, the deeper drivers include arbitrage opportunities, central bank policies, and global shifts in currency diversification strategies. 

As gold demand remains strong, logistical challenges and refining bottlenecks will continue to shape market dynamics. Whether this trend persists will depend on evolving trade policies and economic conditions. VenturOmix financial strategists will continue to monitor these developments, providing insights into the ever-changing landscape of precious metals.