Gold Banks Shift Focus to Capitalize on US Premium
Prompted by the substantial premium enjoyed by US gold futures over spot prices, global bullion banks are now transporting gold into the United States from Asian trading hubs like Dubai and Hong Kong.
Traditionally, bullion banks moved gold eastward to meet demand in China and India, but concerns over US import tariffs have reversed this trend. The arbitrage opportunity, created by the premium in Comex futures, has spurred banks to move gold for delivery on Comex.
Since November, COMEX gold inventories have increased by nearly 80%, with supplies originating from London, Switzerland, and now Asian hubs. The premium over spot prices has widened, reaching $40 on Monday.
The cost of transporting gold from Asia to the US is negligible compared to the current Comex premiums. This has prompted bullion banks to source gold from India's customs-free zones and refiners in Dubai, typically major suppliers to India.
"The US has become a gold magnet, attracting gold from all corners of the globe," said a Dubai-based bullion dealer.