The Bank of England (BOE) is experiencing heightened demand for gold withdrawals due to an ongoing rush by traders to capitalize on premium prices in the U.S. The surge in demand for slots to remove metal from the central bank’s vault is being fueled by concerns that U.S. tariffs, particularly under President Donald Trump’s administration, may soon affect gold prices.
This fear has triggered a rise in premiums in the New York market, creating weeks-long queues at the BOE for withdrawals. In response, gold bars held at the central bank have been trading at a discount compared to the wider market this week, as delays make the BOE’s metal less appealing than bullion in more accessible commercial vaults.
Dave Ramsden, Deputy Governor of the BOE, highlighted the surge in demand during a press conference on Thursday. “All of those bodies who ship the gold have secured the delivery slots they need over the next few weeks,” Ramsden explained. “However, if you’re new to us, you may have to wait longer as all existing slots are booked. But rest assured, this is an orderly process.”
Traders are particularly eager to withdraw bullion, which is near record highs, as they aim to avoid potential tariffs and benefit from the premium prices in the U.S. market. The delays in accessing gold are problematic for commercial holders, who are eager to take advantage of the price differential between the U.S. and London.
The BOE plays a pivotal role in the global gold market, acting as a custodian for other central banks and allowing selected commercial operators to hold gold accounts. Its vaults remain crucial for maintaining liquidity in the London bullion market, the largest gold trading hub worldwide.
Despite the increased activity, Ramsden noted that gold inventories at the bank have only fallen by about 2% since the end of December. He also pointed out that the physical nature of gold, with its inherent logistical and security constraints, is part of the reason behind the delays. “Gold is a heavy, physical asset, and transporting it comes with its own challenges,” Ramsden remarked, recounting his own experience of navigating through a bullion yard at the BOE.
As the rush for gold withdrawals continues, the Bank of England remains a key player in managing the logistical complexities of the precious metal amid fluctuating market conditions.
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