London’s bullion market is under pressure as traders rush to borrow gold from central banks following a surge in shipments to the U.S., two sources told Reuters. The Bank of England, a key storage hub for central bank gold, now has a four-week wait time for releases—far longer than the usual few days. The BoE declined to comment.
The wait time to withdraw gold from the Bank of England has stretched from a few days to four to eight weeks as demand overwhelms the central bank’s capacity. “People can’t get their hands on gold because so much has been shipped to New York, and the rest is stuck in the queue,” said one industry executive.
Why it matters below…
BNP Buys the Gold As Well
Uncertainty has been the key driver for gold over the last year, driving the yellow metal to consecutive record highs in USD terms through Q4 2024, as we noted in Gold : Elevated uncertainty– revamping model, ramping up forecasts, dated 22 October. This environment has prompted increased instability in gold correlations with other asset classes, a signal we see as positive for gold’s role as a risk/uncertainty hedge, in turn driving a significant build in speculative net gold length in NYMEX gold futures
Key Charts depict
Speculative net-long gold positioning on NYMEX has surged since the start of January
Central bank gold accumulation began to pick up in September, driven in part by the resumption of PBoC buying
The Golden FX Spiral
Gold is trading at all-time highs in major currencies other than USD, however we expect USD gold to push to new record high in Q1
PBoC buying, as well as renewed consumer buying interest, tonnes 250 200 prompted a recovery in Chinese gold imports
Gold USD (DXY) correlation, normally inverse (negative), but has become increasingly unstable in the run up to and post the US elections
We have their trade recommendation and their own desk’s position at bottom. We will describe and put into context for subscribers in premium
US equities retreated on Wednesday after the Fed kept near term rates unchanged and ahead of some Big Tech earnings reports. Large caps lagged small caps: S&P 500 (-0.47%) vs. Russell 2000 (-0.25%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) were essentially flat.
Market News:
"Microsoft shares tumbled as much as 5% in extended trading Wednesday after the software company issued fiscal second-quarter results that included lighter growth in Azure cloud computing services than expected. CNBC
"Meta Platforms posted record revenue in the fourth quarter, aided by artificial-intelligence improvements to its ads business...WSJ
"Tesla reported earnings and revenue for the fourth quarter that missed analysts’ estimates. Musk said in the opening remarks of Tesla’s earnings call that the company would be “launching unsupervised Full Self Driving as a paid service” in Austin in June." Source: CNBC
"Scientists have discovered a rich range of organic compounds in samples retrieved from an asteroid by a US spacecraft, including many of the key chemical building blocks of life.FT
Geopolitics/ Politics; World War BRICS
Russia
European officials are reportedly considering whether Russian gas pipeline sales to the EU should recommence as part of any potential settlement to end the war against Ukraine, via FT citing sources.
Iran/India
Israeli tank fire was reported in the western area of Rafah in the Tel Al-Sultan neighbourhood, according to Al Arabiya.
Palestinian Authority PM Mustafa said he has every reason to believe the Trump administration will help them all do a right and balanced deal that could hopefully end the conflict in the region,
China
US President Trump’s officials reportedly discuss tightening curbs on Nvidia’s (NVDA) China sales although any curbs would likely be a long way off as the new team sets goals
US Commerce Secretary Nominee Lutnick said China's DeepSeek was able to create AI "dirt cheap" by leveraging what it had taken from the US and that DeepSeek AI misused US technology, while he noted "They stole things, they broke in, they've taken our IP". Lutnick also commented Chinese tariffs should be the highest, but US may also need to impose new tariffs on allies.
