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U.S. gold rush drives up borrowing costs for precious metal in London
By Leslie Hook
Financial Times, London
Wednesday, February 5, 2025
The cost of short-term gold borrowing in London has shot up as the shortage in the bullion world's trading capital has starved the market of the precious metal.
A gold rush into the United States -- where inventories on the New York Comex have risen 88% since November's election -- has drained the market in London, as traders try to get ahead of potential tariffs threatened by President Donald Trump. Users report bottlenecks of several weeks to withdraw gold from the vaults at the Bank of England.
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The rate to lend gold for a week has risen to about 10% on an annualised basis this year, compared with 2-3% previously, according to the World Gold Council, an industry body.
"There is more gold in the U.S. than there should be under normal circumstances, and there is less gold in London than there should be," said John Reade, chief market strategist at the WGC. "That is causing disruption to the gold market, and has increased the cost of borrowing gold." ...
... For the remainder of the report:
https://www.ft.com/content/2bab272d-6332-44ac-a97a-237f7d01c456
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