Gold is about to reach Gold Status. The precious commodity is flying commercial from the UK to New York in droves, as global speculation about a trade war spurred by President Trump’s policies has ignited financial institutions to get their hands on bullion.
Why? For one, investors are worried that Trump will institute a tariff on gold, so they’re keen on getting it into the US before a duty is imposed. But gold is also racking up frequent flyer miles because those fears about tariffs have resulted in a gap between prices for physical gold in the UK, where the Bank of England houses it, and in New York, where futures contracts on gold are sold.
- Gold futures are at a record high, closing last week at $2,909 in New York. Prices of gold per ounce in London have been about $20 lower per ounce—a highly unusual difference.
- This presents traders with an arbitrage opportunity to make money off of sending gold from London to New York.
If you’re in line to get gold, you may be there a while. Waiting times to retrieve bars from the Bank of England vault have spiked to as long as eight weeks as it struggles to keep up with demand.—CC