In a startling development, thousands of gold bars are being withdrawn from the Bank of England’s vaults, signaling a significant shift in the global gold market. This exodus, which began in late 2024, has accelerated in recent weeks, with approximately 8,000 bars, representing about 2% of the total stock, removed from the central bank’s storage facilities.
The primary driver behind this unusual movement is the growing concern over potential tariffs on gold imports by U.S. President Donald Trump. Traders are racing to ship gold to the United States to capitalize on premium prices and avoid possible future trade restrictions.
This situation has created a unique market dynamic. Gold stored in the Bank of England’s vault is now trading at a discount of more than $5 per ounce compared to the spot price in London. This price divergence is exceptionally rare, as gold at the Bank of England typically trades in lockstep with prices in the broader London market.
The rush to withdraw gold has led to unprecedented queues, with waiting times extending from a few days to several weeks. Dave Ramsden, Deputy Governor of the Bank of England, acknowledged the surge in demand for withdrawal slots, stating that all existing slots are currently booked.
This gold exodus is not only affecting the Bank of England but also impacting the entire London gold market, the world’s largest bullion-trading hub. The Bank of England plays a crucial role in this market, maintaining accounts for other central banks and selected commercial operators. The situation has created logistical challenges for the Bank. Ramsden humorously noted, “It takes time and the stuff is also quite heavy as you know,” highlighting the physical constraints of moving large quantities of gold.
Market analysts are closely watching this development, as it could have far-reaching implications for the global gold trade. The Bank of England’s gold reserves, held on behalf of the UK Treasury, are also stored in these vaults, adding another layer of complexity to the situation.
Investors and market participants will need to pay close attention as this situation evolves. The transfer of such a large gold quantity could have a notable impact on global gold prices and market trends in the months ahead.
