Gold Market Turmoil as Bank of England Faces Withdrawal Surge
The Bank of England has faced an overwhelming surge in gold withdrawal requests after futures prices in New York soared beyond the cash price in London, according to reports from The Telegraph.
Dave Ramsden, deputy governor of the Bank, revealed that the wait time for withdrawing bullion from vaults has extended from a few days to several weeks. Additionally, traders have expressed concerns over potential new tariffs on bullion, which the U.S. President may impose as part of an ongoing trade war.
Bank of England’s Massive Gold Holdings Under Pressure
The Bank of England currently holds more than 400,000 gold bars, primarily on behalf of international banks and gold traders. A significant portion of the UK’s gold reserves is also stored at the Bank for the Treasury.
Meanwhile, European Commission (EC) President Ursula von der Leyen has stated that the European Union (EU) will strongly defend its trade interests if the U.S. implements tariffs on European goods. She emphasized that the trade relationship between the U.S. and the EU generates €1.5 trillion in profits and sustains jobs on both sides. However, she noted that no formal negotiations on tariffs have taken place between Washington and Brussels.
U.S. Tariff Threats Heighten Trade War Concerns
On February 5, the Financial Times reported that potential U.S. tariffs on European goods could cause division within the EU regarding retaliatory measures. The publication suggested that Europe is bracing for a potential trade war with U.S. President Donald Trump.
Trump signed an executive order on February 1 to impose a 25% trade tariff on imports from Canada, China, and Mexico. He has since announced plans to extend these tariffs to EU goods, citing concerns over illegal migration and the smuggling of opioids such as fentanyl across borders.
As geopolitical tensions escalate, gold traders and financial institutions remain on high alert, closely monitoring the implications of these trade policies on global markets.
