Trump’s Trade War Sparks a Gold Rush: London Vaults Empty as Bullion Heads to New York
The comments below are an edited and abridged synopsis of an article by Pamela Heaven, Financial Post
Donald Trump has triggered an actual gold rush, with traders rushing to move bullion from London to New York amid escalating trade tensions. Deep beneath London’s streets, in the vaults of the Bank of England—the world’s second-largest depository of physical gold—an extraordinary shift is unfolding as hundreds of tonnes of gold are being withdrawn.
Gold on The Move: London to New York
Fears of potential tariffs on gold have thrown the market into turmoil, prompting traders to relocate physical bullion before any restrictions take effect. This uncertainty has driven a rare price divergence: while gold futures in New York have surged, the physical price in London has declined. This gap presents a lucrative opportunity for traders to capitalize on price arbitrage by shifting gold across the Atlantic.
So far in 2025, gold futures in New York have climbed 11%, reaching an all-time high of US$2,935 per ounce, while London’s spot price has fallen. This has sparked what the Wall Street Journal describes as the “biggest trans-Atlantic movement of physical gold bars in years.”
Bank of England Overwhelmed by Bullion Withdrawals
The surge in gold transfers has placed immense pressure on the Bank of England. Deputy Governor Sir Dave Ramsden confirmed that withdrawal requests have skyrocketed since New York futures prices exceeded London’s cash price.
Previously, withdrawing gold from the Bank of England took just a few days. Now, due to overwhelming demand, the process has been delayed to between four and eight weeks, according to the Financial Times. The logistical complexity of moving large quantities of gold has only exacerbated the situation.
“Gold is a physical asset, so there are real logistical and security constraints,” Ramsden noted. “Even getting into the bank this morning was more challenging because there was a lorry in the bullion yard.”
Logistics And Refining Challenges
Once withdrawn, gold bars are transported through London in high-security armoured vehicles before being flown to the US. However, the Comex commodity exchange in New York requires a different bar size than those stored in London. As a result, most gold must first be shipped to Switzerland for refining before it can continue its journey to New York.
These refined bars are typically transported via commercial passenger flights, a method considered both cost-effective and secure. Since Trump’s election, 393 metric tonnes of gold have been moved into Comex vaults—an increase of 75% in inventory, according to the Financial Times. However, the actual volume entering the US is likely higher, as private vaults owned by JPMorgan and HSBC are also receiving shipments.
Gold Prices Set to Rise Further?
Despite the recent rally, analysts predict further gains for gold. Goldman Sachs has raised its 2025 price forecast to $3,100 per ounce, while UBS projects a target exceeding $3,200 per ounce.
As of February 18, 2025, gold was trading at $2,927.70 per ounce, reflecting the continued impact of market uncertainty and global economic tensions.
With the trade war escalating and demand for physical bullion soaring, gold’s safe-haven appeal is stronger than ever—making it one of the most sought-after assets in today’s volatile financial landscape.