By Rajendra Jadhav
In an interesting twist, global bullion banks are redirecting their gold shipments to the United States from major trading hubs usually catering to Asian consumers, such as Dubai and Hong Kong. This strategic move is driven by the attractive premium U.S. gold futures have over spot prices.
Typically, bullion flows from the West to the East, primarily to satisfy the demand from China and India, which together make up nearly half of the world’s gold consumption. However, recent talks of U.S. import tariffs under President Donald Trump have pushed Comex futures prices significantly above spot prices. This shift has opened up a golden opportunity for arbitrage.
“Gold prices are through the roof, and demand in Asia has taken a nosedive,” revealed a bullion dealer based in Singapore, affiliated with a top bullion supply bank. On Monday, spot gold prices reached an unprecedented high.
“With a promising opportunity emerging in the U.S., banks are naturally seizing it — transporting gold for Comex delivery to capitalize on the arbitrage,” he explained.
Comex gold inventories have soared, increasing by nearly 80% since late November; that’s about 13.8 million troy ounces, valued at more than $38 billion at current rates. Supplies are now funneling in from London, Switzerland, and key Asian centers.
On Monday, the gap between Comex futures and spot prices expanded to about $40, contrasting sharply with discounts seen in other regions — up to $15 in India and roughly $1 in China.
“The costs of shipping gold from Asia to the U.S. are minimal when set against the hefty Comex premiums,” remarked a bullion dealer based in Mumbai.
One of the leading bullion banks even shipped gold from a customs-free zone in India to the U.S. last week, he noted.
Ordinarily, banks import gold into India and stash it in customs-free zones, paying the import duties only when there’s local demand. If needed, they can ship it back out without incurring taxes.
With high prices dulling retail interest in Asian markets, bullion banks are even turning to refiners in Dubai — typically a major hub for supplying India — to fulfill their U.S. demands, according to a bullion dealer in Dubai.
“The United States has become a beacon for gold, drawing it in from every corner of the globe,” he observed.
(Reporting by Rajendra Jadhav; Additional reporting by Polina Devitt and Ashitha Shivaprasad; Editing by Veronica Brown and David Evans)
