Trump’s tariff threats stress London gold market
Cost of funding customer positions has shot up 10,000% as deliverable supplies shift to New York
The London gold market is facing a mounting structural crisis.
Bullion banks that lend precious metals to producers and each other moved over 200 tonnes of gold to New York in January in response to US President Donald Trump’s tariff threats, leaving the London market desperately short of physical supplies.
Dealers in London routinely borrow gold to fund customer positions. The cost of doing so, which has historically ranged from -20 basis points to +10bp, shot up to between 300bp for short
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