Came across the following article that I thought could be of some interest to SM's gold buffs....

America's appetite for gold is 'sucking' bullion out of other countries Key Points More than 600 tons, or almost 20 million ounces of gold, has been transported into vaults in New York City since December last year, according to data provided by the World Gold Council.

The threat of tariffs on gold has spurred U.S. banks, investors and traders to shift the precious metal into the Commodities Exchange Centre and other vaults in New York, when it would otherwise usually be stored in London.

"Supply chains have been disrupted because of this huge sucking sound, which has been the United States importing gold ahead of the potential tariffs," said the World Gold Council's John Reade. Strong U.S. demand for gold is "sucking" bullion out of some countries as traders try to stockpile it before U.S. President Donald Trump's tariffs on Canada and Mexico kick into high gear.

There's a "glut of gold" in New York's vaults, Adrian Ash, BullionVault's director of research, told CNBC. More than 600 tons, or almost 20 million ounces of gold, has been transported into the city's vaults since December last year, according to data provided by the World Gold Council.

That amount of gold doesn't normally belong in New York, said John Reade, World Gold Council's market strategist for Asia and Europe.

"You only keep it there when extraordinary circumstances are happening," Reade told CNBC. The threat of tariffs on gold has spurred U.S. banks, investors and traders to shift the precious metal into the Commodities Exchange Centre and other vaults in New York, when it would otherwise usually be stored in London.

2025 Supply chains have been disrupted because of this huge sucking sound, which has been the United States importing gold ahead of the potential tariffs.

John Reade World Gold Council:- Trump recently declared that sweeping U.S. tariffs on imports from Mexico and Canada will be going forward after a postponement on their implementation expires next week.

On Feb. 1, the U.S. president signed executive orders imposing 25% tariffs on products from Canada and Mexico but some said investors fear the tariff threat will go beyond the two countries.

There are lurking concerns that broader tariffs will also come into play in the U.K. and Switzerland, which are also large physical gold hubs, Shiels added.

"The biggest concern is that there could be a blanket tariff on all imports into the U.S. and that this could also apply to gold," said Nikos Kavalis, managing director of Metals Focus.

Canada and Mexico are among the largest exporters of gold to the United States.

The U.S. imports the most gold from Canada, followed by Switzerland, Colombia, Mexico and South Africa, according to data from OEC World.

Since Trump's election victory last November, U.S. gold futures have largely outpaced their international counterparts, creating arbitrage opportunities for those able to shift large quantities of bullion into the U.S., according to industry watchers CNBC spoke to.

They attributed the movement largely to traders looking to close out of short positions, or those holding physical gold in New York expecting to short futures contracts to capture the outsized premium.

As of Thursday, Gold futures listed on the Comex were trading at $2,930.6 per ounce, while the price of spot gold in London was $2,901 - a difference of almost $30.

The premium was wider in January. U.S. warehouses now stock four years' worth of U.S consumer and gold demand, according to data from BullionVault.

U.S. domestic production of gold in 2024 was estimated to be at 160 tons, down from 170 tons in 2023, according to data from the U.S Geological Survey.

The traders are of the view that Trump "could whack 100% tariffs" on U.S. gold imports tomorrow without it making a dent on U.S. gold prices, because there would be enough gold in the vaults, said Ash.

A complicating factor is that Comex depositories largely make deliveries via kilogram bars, which are usually available only in select regions like China, Southeast Asia, the Middle East and India, he added. "There is only a limited capacity for refineries to produce one kilogram bars," said Reade.

"Suddenly everybody has been trying to get hold of one kilogram bars that are eligible to be placed in Comex warehouses and ship them to New York, and that means that other gold flows have been interrupted," he added.

London, often referred to as the terminal market for gold, experienced a big impact from the shift. "As the market has been shifting inventories of gold from private London vaults to Comex vaults, the availability of metal in private vaults in London has been declining," said Metals Focus' managing director Kavalis.

Large gold bars are also being pulled out of London to other refineries around the world where they can be melted and refined into kilobars, because the standard bullion stored in London are 400-ounce bars rather than kilobars.

Gold reserves in London's vaults fell for the third consecutive month in January, data from the London Bullion Market Association showed. The amount of gold reserves in January was 1.7% lower than in December.

Gold exports from Switzerland into the U.S. in January also rose to the highest level in at least 13 years, according to a Reuters report citing Swiss customs data. And Singapore has shipped more gold than it normally would to the United States, Kavalis noted.

Just to hedge against these tariffs, gold has been shipped to the U.S., and that "sucks gold out of the rest of the system," said Reade.

World's demand for gold hit another record high last year; appetite for bullion in 2025 remains firm.

The world's demand for gold hit another record high in 2024 amid robust central bank purchases and investment demand growth, the World Gold Council said in its annual report.

Turkey's Central Bank, which raised its gold reserves by 75 tons, was the second biggest net purchaser of gold among central banks.

The Reserve Bank of India was the third, with consistent purchases every month except December.

The annual overall investment in gold climbed 25% to hit a four-year high of 1,180 tons, largely fueled by gold exchange-traded funds. Similarly, demand for gold bars and coins remained firm, lifted by strong demand from China and India. "Chinese investors faced a dearth of alternative assets in which to invest," the report stated, highlighting that a mix of domestic economic uncertainty, persistent equity market volatility and record low government bond yields pushed domestic investors into gold.

In India, gold demand was lifted after its government reduced gold import duties from 15% to 6% in July, the World Gold Council noted.

Gold investment demand also grew across all ASEAN markets last year, with Singapore, Indonesia, Malaysia, and Thailand reporting double-digit increases year on year. OTC investments remained stable last year, and the demand is reflective of high-net-worth individuals looking to hedge geopolitical and economic risks, the council said. OTC transactions take place directly between two parties, unlike trading conducted by an exchange.

Still weak Demand in the jewelry sector, which has been pressured by higher prices, was subdued, with consumption falling 11% year on year the only outlier as other sectors gained, according to the report. Demand for gold jewelry is likely to stay weak this year as consumer spending power remains dampened by higher prices and soft economic growth, the council's analysts said.

Bullion prices have been on a tear, with prices notching 40 record highs last year and going on to hit fresh highs this year. On Wednesday, gold futures traded on the New York Mercantile Exchange rose to $2,875.8 per ounce, data from FactSet showed. "In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates," said World Gold Council senior markets analyst, Louise Street.

Overall investment demand is likely to remain healthy this year, with expected lower interest rates to reduce the opportunity costs of holding gold, the report said.

Market participants will also be keeping an eye on further China stimulus in hopes that it may fuel a recovery in commodities demand in the world's second-largest economy.

Commodity prices are largely expected to fall in 2025 due to a sluggish global economic outlook and a resurgent dollar, but gold and gas prices are poised to rally this year, according to industry experts.

Commodities had a mixed 2024: While investors flocked to gold to hedge against inflation, commodities such as iron ore fell as the world's largest consumer of metals, China, struggled with tepid growth.

Commodities in general will be under pressure across the board in 2025," said research firm BMI's head of commodities analysis Sabrin Chowdhury, adding that the strength of the U.S. dollar will cap demand for commodities priced in the greenback.

Market participants will be keeping an eye on further China stimulus in hopes that it may fuel a recovery in commodities demand in the world's second-largest economy.

Crude oil prices last year were dragged down by weak Chinese demand and a supply glut, and market watchers expect prices to remain pressured in 2025. The International Energy Agency in November painted a bearish oil market picture for 2025, forecasting global oil demand to grow under a million barrels per day. This compares to a two million barrel per day increase in 2023. Commonwealth Bank of Australia sees Brent oil prices falling to $70 per barrel this year on expectations increased oil supply from non OPEC countries that'll eclipse the rise in global oil consumption.

BMI said in its December note that the first half of 2025 was likely to see a supply glut as substantial new production from U.S., Canada, Guyana and Brazil comes online. Also, if OPEC+ plans to roll back voluntary cuts materialize, the oversupply will further pressure prices.

BMI noted that the demand picture in 2025 was not clear yet. "Global oil and gas demand remains uncertain, with stable economic growth and rising fuel demand offset by trade war impacts, inflation and contracting demand in developed markets."

Global crude benchmark Brent was last trading at $76.34 per barrel, around the same levels as it was a year ago in early January. Gas set to rise Global natural gas prices have rallied since mid-December 2024, driven by cold weather and geopolitics, Citi analysts said. Ukraine's recent halt of Russian gas flow to several European nations on New Year's Day has introduced greater uncertainty to the global gas markets.

As long as the cutoff remains in place, gas prices are likely to remain elevated.

Colder weather for the rest of winter in the U.S. and Asia could also keep prices elevated, said Citi. BMI forecasts gas prices to rise by about 40% in 2025 to $3.4 per million British thermal units (MMbtu) compared to an average of $2.4 per MMbtu in 2024, driven by growing demand from the LNG sector and higher net pipeline exports.

U.S. Henry Hub natural gas prices, which was the gauge that BMI referred to, are currently trading at $2.95 per MMbtu. "LNG will continue to drive new consumption, supported by rising export capacity and strong demand in Europe and Asia," BMI analysts wrote.

Gold prices notched a slew of all-time highs last year, and the run of fresh records could extend in 2025. "Investors are optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt," said Adrian Ash, director of research at BullionVault, a gold investment services firm, emphasizing on the yellow metal's role as a hedge against risk.

JPMorgan analysts also expect gold prices to rise, especially if U.S. policies become "more disruptive" in the form of increased tariffs, elevated trade tensions and higher risks to economic growth.