The amount of gold stored in the London vaults fell 1.7% month on month to 8,535 metric tons worth $771.6 billion in January due to a rush in shipments to the United States, the London Bullion Market Association said.
London is home to the world's largest over-the-counter gold trading hub, where market players trade directly with each other rather than via an exchange. The LBMA oversees it.
The London market, with the average daily OTC trading volume of $127.85 billion in January, remains robust despite the outflow, the LBMA said. For historic comparison, London gold stocks hovered around 8,540 tonnes to 8,775 tonnes in 2024.
U.S. gold futures have been trading at an unusually large price premium against the spot gold in recent months due to worries that the U.S. import tariffs planned by President Donald Trump would affect gold deliveries to the United States.
This premium has attracted massive deliveries to the COMEX gold inventories , which jumped by 93% since late November, or by 16.3 million troy ounces (507 tons), with supplies coming from London, Switzerland and Asia-focused hubs.
In London, the speed of these deliveries thinned short-term liquidity of "unallocated" gold, and prompted a race among London bullion market players to borrow gold from central banks, which store bullion in London.
"The monthly decline in gold stocks reflects the well-documented market dynamics at present. Given the flow of metal from London to New York, a 151 ton decline in stocks in January is unsurprising. Indeed, the pace of the outflow reflects the market functionality," the LBMA said.
As the U.S. futures contracts are typically rolled or cash settled, the physical metal which went to New York can be expected to return to London at some point, the LBMA added.
The situation has been similar with a rush to deliver silver to the COMEX inventories, and part of the supplies came from London.
The amount of silver stored in the London vaults fell by 8.6% from December to 23,528 tons worth $23.9 billion, the LBMA said.
This monthly decline was the largest since the LBMA records began in July, 2016, it added.