The outflow of gold stored in the London vaults to the United States slowed in February, the London Bullion Market Association (LBMA) said on Friday, as the price swings which attracted the shipments wound down.
Since late November, when US President Donald Trump pledged to impose import tariffs on Canada and Mexico, bullion worth $64.5 billion was delivered to the Comex gold stocks, driving them up 126% to a record high and equal to 4-1/2 years of total US consumption.
The inflow to the Comex stocks has significantly slowed down in recent weeks with the premium between US gold futures and London spot prices returning to the normal level.
The amount of gold stored in the London vaults at the end of February fell by 0.7% month on month to 8,477 metric tons, its five-year low, and was worth $772.5 billion, the LBMA said. In January, the London holdings dropped by 1.7%.
The supplies to the US in recent months came from London, the world’s largest over-the-counter (OTC) gold trading hub, Switzerland and other major hubs.
In London, this activity thinned liquidity in the OTC market, which the LBMA oversees, and prompted a race among London bullion market players to borrow gold from central banks, which store their bullion in the Bank of England’s vaults.
“While stocks in the Bank of England declined by a similar pace to that seen in January, gold stocks in London’s commercial vaults in fact increased,” the LBMA said.
“This highlights that gold is moving from BoE into the Loco London system but also shows that the market dynamics that led to gold travelling to New York in recent months have somewhat eased.”
The outflow of silver from the London vaults to the US also slowed in February: the holdings fell by 4.5% from January to 22,462 tons, the lowest in the LBMA data going back to mid-2016, and were worth $22.5 billion.
In January, silver holdings dropped by 8.6%.
(By Ashitha Shivaprasad and Polina Devitt; Editing by David Goodman and Andrea Ricci)
