Analysis: The Bank of England gold rush that's pushing up the price | Ed Conway

Summary

The video discusses the global gold trade, focusing on the movement and storage of gold between London and New York. It highlights how gold is mined worldwide, with significant stocks in vaults, particularly under the Bank of England and the New York Fed. The video touches on the challenges of moving gold due to security and logistical constraints, as well as the impact of geopolitical factors like tariffs. Despite fluctuations, London remains the world’s leading center for physical gold storage, though recent trends show a gradual shift as countries repatriate their gold.

Takeaways

• 😀 Gold is used primarily as an asset these days, alongside its use in jewelry and electronics.
• 😀 Gold is mined from countries like Russia, China, the US, and Canada, before being processed into bars.
• 😀 After processing, much of the gold ends up being stored in vaults, primarily in New York and London.
• 😀 A significant amount of gold from London has been transported to New York recently, often via commercial flights.
• 😀 The movement of gold from London to New York surged around the time of the US election, driven by concerns about potential tariffs on gold.
• 😀 The sudden surge in gold movement also included silver and other assets being moved to New York.
• 😀 The Bank of England holds large quantities of gold, but it faces challenges in accessing and moving gold as quickly as required.
• 😀 The Bank of England has a lot of gold, with over 420,000 bars stored in its vaults.
• 😀 While there are logistical constraints, the Bank of England ensures gold can be moved in and out, albeit with security and insurance measures.
• 😀 The amount of gold in the New York Federal Reserve's vault has decreased by 10% since 2022, even before Donald Trump took office, as countries like China and India repatriate their gold.
• 😀 Despite the decreasing gold stock in the New York Fed, London remains the leading global center for physical gold storage.

Q & A

Where does most of the gold come from around the world?

Most of the gold comes from countries like Russia, China, the US, and Canada, where it is mined and then processed into bars.

What is the primary use of gold today besides jewelry and electronics?

The main use of gold today is as an asset, with people storing it in vaults as a form of financial security.

Where are the major vaults for storing gold located?

The two major vaults for storing gold are located in New York and London, specifically under the Bank of England in London.

What has been happening to the amount of gold in London's vaults recently?

Recently, some of the gold in London's vaults has been leaving and heading to New York, as people are moving their gold due to concerns about tariffs.

Why are people bringing more gold into New York's warehouses?

People are worried that the US might impose tariffs on gold being moved back into the country, leading to an influx of gold into New York.

How did the amount of gold in New York warehouses change after the US election?

After the US election, the amount of gold in New York's warehouses surged, likely due to concerns about potential tariffs on gold imports.

What issues are arising at the Bank of England regarding gold storage?

The Bank of England is facing challenges with physically moving large amounts of gold, as there are security and logistical constraints, despite having sufficient slots for gold movement.

How much gold does the Bank of England currently store?

The Bank of England stores around 420,000 bars of gold, though not all of it is easy to access immediately.

Has the amount of gold in the Bank of England's vaults increased or decreased over time?

The amount of gold in the Bank of England's vaults has been relatively stable, but in recent years, there has been a slight decrease, as gold has been repatriated to other countries like China and India.

What is the current trend regarding gold storage between New York and London?

London remains the world's center for storing physical gold, even though there has been a shift of some gold to New York in recent years.