In a notable trend shift, global bullion banks are redirecting gold from Asian trading hubs to the United States, driven by unprecedented premium margins on U.S. gold futures against spot prices.
The bullion banks’ strategy marks a reverse in traditional gold trade flows. Historically, gold moved from western countries to satisfy high demand in Asian giants like China and India, which consume nearly half of the world’s gold. However, recent market dynamics have changed this trend.
Concerns over U.S. import tariffs introduced by the Trump administration have notably elevated Comex futures prices relative to spot prices. This discrepancy has created an enticing arbitrage opportunity, prompting bullion banks to alter their gold transport routes.
A Singapore-based bullion dealer highlighted the situation, stating, “Gold prices are skyrocketing, and in Asia, demand has pretty much disappeared.” The resulting situation presents a “sweet opportunity” in the U.S. market, fueling a surge in gold shipments for Comex deliveries to maximize gains from the price gap.
Recent data shows a substantial increase in COMEX gold inventories, which have jumped by nearly 80% since November, adding a value of over $38 billion with contributions from hubs like London, Switzerland, and new sources in Asia. Monday’s figures indicated a premium of approximately $40 for Comex futures over spot gold, contrasting with discounts observed in major markets such as India and China.
The cost-benefit ratio is evident, as shifting gold from Asian hubs to the U.S. is economically viable given the substantial premiums. Notably, one major bullion bank relocated gold from an Indian tax-free storage zone to the U.S., reflecting the strategic shift in response to shrinking retail demand at home and soaring U.S. premiums.
Asian markets, typically buoyant with retail gold demand, have seen a slowdown due to climbing prices. This has led banks to source from refiners in Dubai—traditionally a key supplier for India’s gold needs—to satisfy U.S. demands, as noted by a Dubai-based bullion dealer. The U.S., he states, “is like a gold magnet right now, pulling in gold from all over the world.”
This emerging trend, where the U.S. becomes a significant magnet for global gold movements, underscores the fluid nature of international commodity markets. Driven by price dynamics and economic policies, the gold trade is adapting swiftly, with the U.S. emerging as a focal point for bullion banks seeking to leverage market opportunities.
