Metals in Motion: How Tariff Fears Are Driving a Physical Gold Stockpiling Frenzy

The global precious metals market is experiencing its most significant transformation since the 1970s, driven by political uncertainty, tariff threats, and unprecedented logistical challenges.

Greg Frith of StoneX highlights how Trump’s America First policy and potential tariffs have created significant uncertainty, prompting major banks to stockpile physical gold in New York’s Comex vaults—similar to behavior during the early pandemic.

This defensive positioning has fundamentally altered the relationship between London’s physical markets and New York’s futures markets. The most notable shift has been from contango (future prices exceeding spot prices) to backwardation, as gold rapidly moves from London to New York, creating a supply squeeze. This has reversed traditional pricing dynamics and increased costs for traders maintaining positions. The situation extends beyond gold, affecting other precious and base metals, with logistical challenges in transferring physical metals across continents due to increased demand and limited refinery capacity.

While these developments present significant challenges, they also create unique opportunities for adaptable market participants in what may be the most dynamic commodities market in half a century.