The United States is experiencing an unprecedented surge in gold imports as investors and traders rush to secure bullion ahead of impending tariffs. Since December 2024, over 600 tons (nearly 20 million ounces) of gold have been shipped into New York vaults, a level that market experts describe as highly unusual. This massive inflow is largely driven by concerns that President Donald Trump's tariffs on Canada and Mexico, set to take full effect in March, could significantly impact gold trade.
John Reade, market strategist for the World Gold Council, emphasized that gold is typically stored in London, but the uncertainty surrounding U.S. trade policies has led banks, investors, and traders to shift their holdings to New York. He described the phenomenon as a "huge sucking sound," as the U.S. pulls gold away from other global markets, disrupting supply chains.
Gold Markets React to Tariff Concerns
Trump’s executive order signed on February 1 imposed 25% tariffs on multiple imports from Canada and Mexico, including gold and silver. The announcement triggered fears that broader tariffs might follow, potentially affecting major gold trading hubs like Switzerland and the U.K. Nikos Kavalis, managing director of Metals Focus, warned that if the U.S. applies tariffs to all imports, the gold industry could see further disruptions.
The rush to secure gold has already impacted market prices. On Thursday, U.S. gold futures on the Comex exchange were trading at $2,930.6 per ounce, while spot gold in London was priced at $2,901—creating a nearly $30 premium in the U.S. market. Traders who can move gold into the U.S. are benefiting from these arbitrage opportunities.
Supply Chain Disruptions and Global Market Impact
The shift in gold storage from London to New York has led to a decline in available reserves in London’s private vaults. Data from the London Bullion Market Association (LBMA) showed that gold reserves in London fell for the third consecutive month in January, dropping 1.7% from December. At the same time, gold exports from Switzerland to the U.S. reached their highest level in at least 13 years, according to Swiss customs data.
Singapore has also increased its gold shipments to the U.S. in response to tariff concerns. Meanwhile, large gold bars stored in London are being sent to refineries worldwide to be melted down and refined into smaller kilogram bars, which are eligible for Comex storage. This process has caused additional strain on the global gold supply chain.
Adrian Ash, director of research at BullionVault, stated that U.S. gold reserves now hold enough supply to meet domestic demand for four years. Some analysts argue that even if Trump were to impose a 100% tariff on gold imports, it might not immediately impact U.S. gold prices due to the stockpiles already secured in New York vaults.
However, despite the current influx, the long-term effects of these tariffs remain uncertain. Investors will closely monitor upcoming trade negotiations, Federal Reserve policy decisions, and economic indicators to assess how gold markets will evolve in the coming months.
