Hundreds of tons of gold have been transferred from London to New York, raising concerns about global gold market stability. London is the world’s largest physical gold trading center, with over 8,500 tons of gold stored in vaults as of January 2025, according to the London Bullion Market Association (LBMA).
Commercial gold vaults in London are operated by major banks such as JPMorgan Chase & Co. and HSBC Holdings Plc. The Bank of England (BOE) also holds large reserves of gold in nine highly secured vaults. The BOE not only stores gold for the UK Treasury but also for central banks and financial institutions worldwide, making it the second-largest gold depository globally after the Federal Reserve in New York, with around 420,000 gold bars.
London’s reputation for stability and the BOE’s secure vaults have made it a preferred location for storing gold reserves. Holding gold in London allows countries to access the city’s deep gold market, making it easier to trade and conduct financial transactions.
However, the recent wave of gold transfers was triggered by the impact of tariffs imposed by former US President Donald Trump. January 2025 saw the largest outflow of gold from BOE vaults since 2012. Despite the outflow, BOE vaults remain well-stocked, though increased demand has led to longer wait times for withdrawals and a drop in London’s gold spot price.
The logistics of gold storage and withdrawal add to the complexity. The BOE stores gold bars across two underground floors, limiting access and movement. Gold deposited at the BOE is not pooled but kept separate, ensuring that the same gold bar deposited is returned upon withdrawal.
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Transporting gold to the US also presents challenges. Gold bars in London typically weigh 400 ounces, while US market standards require 100-ounce or 1-kilogram bars. To meet these specifications, gold must first be refined in Switzerland before shipment to the US, creating delays as demand for refining services rises.
By mid-February 2025, gold reserves in Comex vaults in New York had increased by over 20 million ounces, valued at approximately $60 billion. Most of this gold was transported by air from London. The increased demand for gold reflects growing interest from central banks, which purchased over 1,000 tons of gold in 2024, according to the World Gold Council.
The ongoing shift of gold from London to New York highlights the complex dynamics of the global gold market and the importance of secure and adaptable storage infrastructure.
This article is originally published on vietnam.vn
