The World Gold Council has released a comprehensive analysis of recent gold market trends, highlighting significant shifts in response to potential US tariffs.

The report, published on February 27, 2025, reveals a notable increase in COMEX gold inventories and widening spreads between futures and spot prices, driven by tariff-related uncertainty.

Since late 2024, COMEX registered and eligible inventories have surged by approximately 300 tonnes and 500 tonnes respectively, reaching levels reminiscent of the COVID-19 pandemic era.

This unexpected influx of gold into the US has surprised market observers, given the country’s typical self-sufficiency in gold production and consumption.

The surge in US-bound gold shipments is largely attributed to traders pre-emptively moving gold from London to avoid potential tariff-related charges.

This shift has led to a widening spread between COMEX gold futures and London spot prices, reaching as high as US$40-50 per ounce, significantly above the two-year average of US$13 per ounce.

Concurrently, reports of declining inventories in London have fuelled speculation about market stability.

However, the World Gold Council emphasises that such fluctuations have occurred before, notably during the pandemic, and markets have subsequently normalised.

The report also highlights increased gold lease rates, which peaked at 5 per cent in January, indicating tightness in the London gold market.

However, recent data suggests these rates are cooling, now closer to 1 per cent.

Despite these market disruptions, the gold spot market has remained relatively stable, benefitting from flight-to-quality flows amid heightened geopolitical and economic uncertainties.

The World Gold Council expects these market disruptions to ease in the coming weeks as COMEX inventories stabilise and London withdrawals normalise.

However, they caution that the current environment of elevated geoeconomic risks could lead to intermittent spikes in market volatility.

This period serves as a reminder of the gold market’s sensitivity to global trade policies and its ability to absorb shocks over time.

As the situation continues to evolve, market participants will be closely monitoring these trends and their potential impacts on the broader financial landscape.