A record amount of gold is now stockpiled in U.S. exchange warehouses, as tens of billions of dollars’ worth of bullion flowed into the country in response to tariff-driven market distortions. The latest data shows that inventories in New York’s Comex bourse reached 39.7 million ounces, valued at approximately $115 billion—the highest level since records began in 1992.
The surge in U.S. gold holdings was driven by a unique arbitrage opportunity that arose late last year, as fears mounted that President Donald Trump’s trade policies might include new tariffs on gold imports. This prompted traders to close out short positions on Comex, causing U.S. futures prices to spike well above international benchmarks, particularly the London spot market. As a result, traders rushed to transport gold to the U.S., profiting from the price gap.
Comex Inventories Hit New Highs but Are Now Stabilizing
The current stockpile in Comex-registered warehouses has now surpassed the previous pandemic-driven record set in February 2021, when gold inventories spiked due to global market disruptions. However, gold inflows into U.S. depositories are now slowing, suggesting that the market is returning to normal.
Daily gold inflows, which peaked at over 1 million ounces in late January, have since declined to about 200,000 ounces or less per day. This decline indicates that the physical market is stabilizing, and the unusual price gap between U.S. and international gold markets is narrowing.
In a typical market environment, traders settle their Comex futures contracts in cash, rather than taking physical delivery of gold. However, due to recent market disruptions, many opted to deliver gold into Comex depositories instead, leading to an unprecedented accumulation. Currently, the amount of gold held in Comex warehouses is equivalent to 80% of the total open interest in Comex gold futures—a significant shift from the historical norm of 20%.
Gold Prices Hold Strong Amid Economic Uncertainty
Despite easing market tightness, gold prices remain elevated, reflecting growing investor anxiety about the global economic outlook. Spot bullion steadied near $2,910 an ounce after gaining almost 2% last week. Since the start of 2025, gold has surged every week except one, repeatedly setting new all-time highs.
Several factors continue to fuel gold’s rally:
- Tariff-Driven Market Disruptions – Concerns over Trump’s escalating trade policies and tariffs have driven safe-haven demand.
- Central Bank Buying – Sustained purchases by major central banks have bolstered gold’s upward momentum.
- Interest Rate Speculation – The possibility of the Federal Reserve cutting rates further has kept gold attractive to investors.
President Donald Trump has acknowledged that the U.S. economy is in a “period of transition”, as he continues to push for more tariffs and federal job cuts. Meanwhile, data from China suggests persistent deflationary pressures, further reinforcing gold’s role as a global hedge.
Will the Fed’s Next Move Keep Gold at Record Highs?
Federal Reserve Chair Jerome Powell recently addressed rising economic uncertainties but stated that officials are not rushing to adjust monetary policy. However, key economic indicators—such as the Atlanta Fed’s GDPNow gauge, which suggests the U.S. economy may shrink this quarter—are increasing expectations for potential rate cuts.
Analysts agree that gold will remain a strong performer if economic weakness continues. Zhu Shanying, an analyst at CITIC Futures Co., stated that “weak U.S. economic data and recession fears have raised rate-cut expectations, which are all supportive of gold.” However, she noted that bullion may remain range-bound until the Fed’s next policy decision later this month.
Meanwhile, investors continue to pile into bullion-backed exchange-traded funds (ETFs), which have seen six consecutive weeks of inflows, reaching their highest level since December 2023.
Gold’s Strong Performance Amid Dollar Weakness
As of 2:02 p.m. in Singapore, spot gold traded at $2,910.40 an ounce, up 11% this year. Its most recent record high was just above $2,956 last month. Meanwhile, the Bloomberg Dollar Spot Index remains weak, following its steepest weekly decline since 2022.
While gold held firm, silver, platinum, and palladium saw slight declines. However, with ongoing economic uncertainty, investor demand for precious metals remains strong, keeping gold firmly in the spotlight as a premier safe-haven asset.
As long as economic volatility, trade disruptions, and central bank activity persist, gold’s historic rally may have even further to go.
