US gold stockpiles hit record high in wake of Trump tariff trade
me-metals: A record amount of gold is now sitting in US exchange warehouses, after tens of billions of dollars of bullion flowed into the country in a tariff-driven frenzy.
According to me-metals cited from mining.com, Inventories for New York’s Comex bourse hit 39.7 million ounces on Wednesday, the most in data going back to 1992 and worth about $115 billion. The hoard has more than doubled since early December, driven by a surge in US prices over international benchmarks that created a lucrative arbitrage opportunity for traders who could transport gold there.
Premiums between New York futures and the dominant London spot market are typically modest, reflecting the cost of shipping, storing and financing metal. But that changed late last year, when fears that gold could be included in President Donald Trump’s sweeping tariff measures prompted some traders to close out short positions on Comex, driving futures well above London spot prices.
Gold then flowed into the US as traders rushed to profit from the unusually large price gap.
The current stockpile in Comex-registered warehouses now exceeds a previous record set in February 2021, which marked the peak of a buildup of inventories sparked by the market fallout of the pandemic.
Still, the current dislocation now appears to be fading as tightness in the physical market eases and premiums fall. Daily gold inflows into depositories have fallen from peaks of more than 1 million ounces in late January to roughly 200,000 ounces or less in the past week or so.
In normal times, traders who sell futures on the Comex typically buy out of their positions by settling in cash. But they can also deliver gold into Comex-registered depositories to close out their positions.
The amount of gold now held in the warehouses is equivalent to about 80% of the aggregate open interest — the number of outstanding contracts — in Comex gold futures. Before 2020, it was typically around 20%, as banks tended to hold gold in London and hedge it by selling futures in New York.
source: mining.com
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