Gold markets are facing significant disruptions as fears of potential tariffs under the Trump administration drive traders to preemptively move large quantities of gold to the US. Since last November, 393 metric tonnes of gold have been shipped to New York’s Comex vaults, depleting London’s reserves and delaying withdrawals by weeks. This rush has also been fueled by a spread in price between Comex futures and London spot prices.

Short-term gold lease rates in London have surged to 3.5%, the highest since 2002, as dealers scramble to secure bullion for shipments. Simultaneously, gold prices have hit record highs above the $2,800 per ounce mark, driven by inflation fears, trade war risks, and strong safe-haven demand. Central banks’ diversification away from the US dollar has further tightened supply.

As a result, the situation is straining London’s role as a gold hub while also impacting other large gold markets like India. The physical market could also come under increased pressure as traders react to new developments in Trump’s policies with tariffs on Mexico and Canada potentially starting this weekend.