By Rajendra Jadhav
Mumbai (Reuters) – Global Bullion Banks fly gold to the United States of Handelshubs that focus on Asian consumers, including Dubai and Hong Kong, to take advantage of the unusually high premium that American Golden Futures enjoy the spot prices.
Traditionally, precious metal banks transport gold east from the West to make up for almost half of the worldwide consumption to the question from China and India, the world’s two largest consumers.
But alarm about American import tariffs planned by President Donald Trump has driven the Comex -Futures prices considerably above the spot prices in recent months, creating a lucrative arbitration option.
“The gold prices are up and in Asia the demand has almost disappeared,” said a precious metal dealer established in Singapore with a leading bullion that Bank supplies. Spot Gold Prizes reached a record high on Monday. [GOL/]
“In the meantime, a sweet chance has surfaced in the US, and of course almost every bank jumps on it – Moving gold for Comex delivery to cash in the arbitration,” he said.
Comex Gold Inventories have risen almost 80% since the end of November, or 13.8 million Troy Ounces worth more than $ 38 billion at current prices, with supplies from London, Switzerland and now focused on Asia.
The premium on Comex Futures on the spot prices was again expanded to around $ 40 on Monday, compared to discounts of up to $ 15 in India and a discount of around $ 1 in China.
The costs of moving gold from Asian hubs to the US are fractional compared to the prevailing Comex premiums, said a Bullion dealer established in Mumbai.
A leading Bullion bank even moved gold moved in a customs-free zone in India to the US last week, he said.
In normal situations, many banks bring gold in India and keep it in customs -free zones, so that the shipments are only cleaned up by paying import tax after realizing the demand. They can move the load back abroad without paying taxes.
Since the retail trade in the Asian markets was filled in by high prices, precious metal banks were even gold on the charges of refineries in Dubai, which usually serve as a large India stock hub, to meet their demand in the US, a Dubai said Bullion dealer.
“The US is currently like a golden magnet and attracts gold from all over the world,” he said.
(Reporting by Rajendra Jadhav; Additional reporting by Polina Devitt and Ashitha Shivaprasad; editing by Veronica Brown and David Evans)