Gold has very quietly pushed into new all-time highs. The retail explanations say it’s because of concerns about Trump’s proposed tariffs. I’m not buying them.
That’s a handy excuse, but it fails to account for the truly unprecedented loss of gold from London’s vaults into US vaults. There’s a bigger story driving this.
I offer three hypotheses to consider:
1 – Some big player(s), possibly a European large bank,is (are) in trouble and big money doesn’t want to hold cash as a liability of a bank, but would prefer to hold physical gold in a nearby vault.
2 – The US Treasury market is about to go bonkers with volatility courtesy of the goose egg Janey Yellen left to Scott Bessent in the form of an exhausted debt-ceiling limit coupled to a massive $10-$11 trillion Treasury market refunding for 2025.
3- The gold market actually broke in Feb 2022 when the US froze Russia’s sovereign reserves. That’s precisely when all of the most enduring of gold charts broke down, such as gold to 10-year treasury yields and gold to the buck. The Comex shenanigans were able to keep things limping along, but now the jig is up.
Any (or all) of those three possibilities promises to make 2025 quite…spicy.
While I can’t be 100% sure that the retail explanation isn’t correct, I’m as close to positive as I can be. Why? Because of all the financial data I can dig up the system is the most stingy and guarded about disclosing how much gold is where and who exactly thinks they can lay claim to any particular bar.