For centuries, gold has been the go-to haven asset in times of political and economic uncertainty. The fact that it’s tangible — something you can hold in your hand — gives people a sense of safety and represents a store of value when everything else is in turmoil.

Investors have sought refuge in bullion amid mounting concerns over US President Donald Trump’s disruptive trade and geopolitical agendas. The price of gold has hit a series of record highs in 2025, extending a ferocious run from last year.

US prices have surged even higher, building a premium over international benchmarks, on fears that gold could imminently be included in Trump’s tariffs on imported goods. Precious metals have yet to be targeted specifically but dealers are worried they could be swept up in the broad levies Trump has announced and threatened. This has spurred a transatlantic gold rush as the yellow metal is moved from vaults in London to New York.

Why is gold being sent from London to New York?

Under normal circumstances, bullion prices in New York and London — two key trading hubs — move in near lockstep. But gold futures on New York’s Comex have been trading significantly above spot prices in London, with the gap topping $50 per troy ounce this year.

The huge price differential has created a lucrative arbitrage opportunity for dealers, traders and investors. There’s been a worldwide dash among those in possession of the physical metal to shift it to the US to capture the large premium and potentially hundreds of millions of dollars in profit.

As of mid-February, Comex inventories had swelled by more than 20 million ounces — worth about $60 billion — since the US election in November. Much of the gold that was express shipped to New York came from London.

The last time there was such a severe price dislocation was in 2020, when the Covid-19 lockdowns upended the gold market and led to bumper profits for those who were able to charter planes and deliver the metal to the US.

Why is so much gold stored in London?

London is the world’s largest trading hub for physical bullion and was sitting on more than 8,500 metric tons as of January, according to data from the London Bullion Market Association.

The city sees gold change hands in commercial vaults run by dealers such as JPMorgan Chase & Co. and HSBC Holdings Plc. The Bank of England also holds a large stash in nine heavily fortified vaults and keeps these deposits on behalf of the UK Treasury, other central banks and commercial banks. The BOE is often considered the last resort to tap for the physical market — holders there rarely shift their bullion as it’s a relatively cheaper storage option and has long proven its security.

However, because of the urgency to get ahead of any Trump tariffs that may hit the yellow metal, both the commercial vaults and Bank of England’s cache have been drawn upon. The BOE saw its biggest gold outflows since 2012 in January.

Is there a risk London will run out of gold?

Despite the exodus, there’s still plenty of bullion deep below Threadneedle Street — the Bank of England is the second-largest custodian of gold in the world after the New York Federal Reserve and holds around 420,000 bars.

While its stocks haven’t been depleted, the BOE has struggled to keep up with the pace of demand, resulting in a weekslong queue to make withdrawals and even a discount to spot gold prices in London. The bank operates with a limited number of vault staff and the bullion is split across two subterranean floors, making it cumbersome to move. To top things off, holders don’t have the right to just any bar in the Bank of England; instead they own specific bars that must be tracked down and brought to the surface.

These logistical complications are a risk for those wanting to move their gold to the US and capture the large price premium before a potential tariff squeeze.

How easy is it to transport gold internationally?

It’s usually relatively simple to shift, stashed away in the cargo holds of commercial aircraft, unbeknown to the holiday and business travellers in the cabin above. There’s a limit on how much can be transported on one flight, not because of the weight, but because of the value, as insurers will only cover a certain amount on any one plane.

Yet, it’s not as straightforward as loading up a jet from Heathrow Airport to JFK thanks to a quirk in the global gold market: different size requirements. In London, 400-ounce bars are the standard, while for Comex contracts, traders must deliver 100-ounce or 1-kilogram bars. That means bullion being sent to Comex warehouses has to first go to refiners in Switzerland to be melted down and recast to the correct dimensions, before journeying on to the US. This creates a bottleneck when there’s a particular rush to rejig the location of bullion stocks. The wait time at refineries has been getting longer due to the high demand for their services.

Is it just trade war fears pushing up the gold price?

The metal’s blistering price rally since the start of 2024 was partly driven by huge purchases by central banks, particularly in emerging markets as they seek to reduce their dependency on the US dollar, the world’s primary reserve currency. Gold helps diversify a country’s foreign exchange reserves and guard against currency depreciation.

Central banks’ appetite for gold has been building since Russia’s invasion of Ukraine underscored how foreign currency assets are vulnerable to sanctions — the US and its allies froze the funds of the Russian central bank held in their countries. In 2024, central banks bought more than 1,000 tonnes of bullion for the third year in a row, according to the World Gold Council, and they hold around a fifth of all the gold that’s ever been mined. Their sustained enthusiasm spurred Goldman Sachs Group Inc to raise its year-end target for the gold price to $3,100 per ounce in mid-February.

Is gold the only precious metal being snapped up?

Traders have also put silver, gold’s cheaper sister, on commercial flights to the US to capitalise on a lucrative premium. Silver bars are normally considered too bulky and low in value to be worth the cost of transporting them by plane; instead they’re typically shipped by boat and it takes around a month to 45 days to reach their destination. But the New York price premium has made air freight viable.

Many market participants and industry experts don’t expect silver to be included in Trump’s tariffs, but the transatlantic arbitrage opportunity is being driven by lingering uncertainty. As with gold, there’s a lack of clarity over what will ultimately face the import duties Trump has dangled, including the delayed 25 per cent tariffs announced on goods from Mexico and Canada, two of the top suppliers of silver to the US.