GOLD Analysis
Afternoon: Gold Prices Surge Amid Supply Disruptions and US Policy Uncertainty
Highlights:
- Gold Prices Hit Record Highs Amid London Supply Crunch – Supply constraints and increased demand drive gold past $3,050 per ounce.
- US Tariff Speculation Triggers Gold Migration to New York – Anticipated policy changes under Trump’s administration accelerate bullion transfers.
- Central Banks to Purchase 1,000 Tonnes in 2025 – Sustained institutional demand reinforces gold's safe-haven status.
Overview:
Gold prices have surged past $3,050 per ounce due to significant supply constraints in the London market. The Bank of England has reported a 2% depletion in reserves, equivalent to 8,000 gold bars withdrawn, leading to longer delivery delays (4-8 weeks vs. the usual 14-day standard). This bottleneck has been compounded by logistical challenges, as gold bars need to be recast to meet New York’s specifications. The transfer of bullion to COMEX warehouses has resulted in a 70% increase in New York’s gold stock since November 2024, intensifying arbitrage demand and reinforcing the bullish price trend.
Growing concerns over potential US import tariffs on gold have prompted a large-scale migration of bullion from London to New York. Major banks such as JPMorgan Chase and HSBC have led the transfer of holdings, creating a significant liquidity squeeze in the London market. The Bank of England has reportedly approached central banks to lend gold, raising questions about the actual availability of stock. This shift in market flows, driven by arbitrage opportunities and tariff fears, has further tightened global supply chains, keeping gold prices elevated.
Weakening US Dollar Boosts Gold’s Safe-Haven Demand
The US dollar index has declined 3% since Trump’s second-term inauguration, making gold a more attractive alternative for investors. A weaker dollar typically enhances gold’s appeal as a hedge against inflation and economic uncertainty. With expectations of one or two Federal Reserve rate cuts in 2025, gold prices have received additional support. Meanwhile, equity market volatility has further driven investors toward bullion, reinforcing gold’s status as a safe-haven asset.
Trade Action:
Based on these levels, a tactical approach is recommended: Selling on Rise 3049-50$ with a target of $3030-35 and a stop loss above 3058$
Support & Resistance Levels:
