Gold - Highlighting Tough Market Conditions
Whilst the word "tariff" is still "the most beautiful word," according to Mr. Trump, gold spreads continue to widen. Why?
The fear is that the use of tariffs will spread (tomorrow they will be applied to Canada and Mexico). This is also evident in the physical gold market. Physical stocks in New York now amount to $82 billion, and the wait time for transport has risen from a few days to as many as eight weeks.
The Financial Times (please see article below) noted that so much gold has been shipped from London to New York that liquidity in the London physical market is now becoming constrained. The FT reported that data from COMEX suggests 393 metric tonnes of gold have been deposited in its New York vaults since November’s election. However, the total shipped across the Atlantic could be much higher, as HSBC and JP Morgan both operate private vaults.
Our inbound spreads have doubled, and overnight roll costs are $10 wide. The April EFP widened yesterday from 38 to 60.
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