Record Gold Deliveries Hit US as Banks Rush to Beat Tariffs
Published: Monday, 03 February 2025 08:45 | 
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JPMorgan Chase, the world's largest bullion dealer, is spearheading an unprecedented movement of gold to US markets, planning to deliver over $4 billion in bullion against February Comex futures contracts. This massive delivery, part of a total 3 million troy ounces from major banks, represents the second-largest delivery in exchange history since 1994. The unusual movement reflects growing concerns about potential import tariffs under President Trump, which has created a significant premium for US gold prices over London spot rates. The situation has triggered remarkable market dynamics, with physical gold inventories in Comex depositories swelling by 14 million ounces ($39 billion) since the US election. The price disparity has become so significant that traders are even airfreighting silver into the US, an unprecedented move given silver's typically prohibitive transport costs relative to value. While JPMorgan accounts for roughly half the planned deliveries at 1.485 million ounces, other major institutions including Deutsche Bank, Morgan Stanley, and Goldman Sachs are also participating in this extraordinary movement of physical precious metals to US markets.
Oil Prices Rise as Tariffs Threaten North American Energy Trade
Published: Monday, 03 February 2025 08:44 | |
| Oil markets responded strongly to Trump's new tariffs, with prices rising on concerns about potential supply disruptions in North America's integrated energy market. Brent crude gained 1.7% to $76.95 while U.S. WTI crude jumped 2.6% to $74.42, reaching its highest level since January. The impact is particularly significant given that Canada and Mexico together supply about a quarter of U.S. refineries' crude oil needs. While Canadian energy imports face a lower 10% tariff compared to the broader 25% levies, analysts warn of significant market disruption. Barclays notes the relatively softer stance on Canadian energy likely reflects concerns about domestic market stability, but Rystad Energy warns of inevitable gasoline price increases as refineries face higher costs for heavy crude grades. The situation could benefit OPEC+ if prolonged tariffs lead to production cuts in North America, potentially helping the producer group unwind its output restrictions. Meanwhile, U.S. gasoline futures surged 2.5% to $2.11 per gallon as markets priced in expected supply constraints.
Chinese Buyers Swap Property for Gold as Economy Slows
Published: Monday, 03 February 2025 08:42 | |
| Chinese consumers' strong demand for gold helped drive prices to record highs in 2024, particularly in Shubei's massive retail market. While general consumer spending and jewelry purchases declined amid China's economic slowdown, gold remained attractive as a wealth preservation tool, with sustained demand for bars and coins. The persistent demand for gold bars and coins highlights a broader transformation in Chinese investment patterns, as consumers increasingly view the precious metal as a reliable hedge against economic instability. This shift is particularly significant given China's property market troubles, traditionally a primary wealth storage vehicle for Chinese citizens. Unlike other luxury purchases that have seen decreased interest during the economic downturn, gold's cultural and financial significance has made it a preferred choice for wealth preservation, driving sustained buying despite broader economic challenges.
Yield Curve Flattens as Markets Digest Trump Tariffs
Published: Monday, 03 February 2025 08:41 | |
| Treasury markets showed a divergent reaction to Trump's new tariffs, with short-term yields rising on inflation concerns while longer-term yields remained stable or declined. The 2-year yield climbed 6 basis points to 4.28% while the 10-year yield dipped slightly, suggesting markets expect the Fed to maintain higher rates near-term while long-term growth faces headwinds.
Markets Tumble as Trump's Tariffs Spark Global Selloff
Published: Monday, 03 February 2025 08:38 | |
| Global financial markets experienced significant upheaval as Trump's sweeping tariffs against major trading partners marked the beginning of what investors fear could be a prolonged trade war. The dollar index jumped 0.9% to near two-year highs as traders sought safety, pushing the Canadian dollar to its lowest level since 2003 and pressuring the euro toward parity. The market impact was broad and severe, with S&P 500 futures dropping 1.6%, European automakers tumbling more than 5%, and cryptocurrencies facing sharp selloffs. The tariffs represent the most extensive protectionist action by a US president in almost a century, prompting dire warnings from major financial institutions. Goldman Sachs warns of a potential 5% US stock market decline, while RBC Capital Markets suggests losses could reach 10%. Bloomberg Economics estimates the measures could reduce US economic growth by 1.2% while adding 0.7% to core inflation. The ripple effects extended to emerging markets and commodities, with the Mexican peso falling over 2% and oil prices surging on supply disruption fears, threatening higher gasoline prices for American consumers. Market analysts describe the move as a watershed moment, with XTB Ltd.'s research director comparing it to "crossing the Rubicon."