*

Bullion hits record high at $2,911.30/oz

*

WGC estimates central bank demand jumped 54% y/y in Q4,

2024

*

London gold stocks fell by 1.7% m/m in January

By Ashitha Shivaprasad and Daksh Grover

Feb 10 (Reuters) - U.S. President Donald Trump's latest

tariff threats have ignited another gold rush, propelling the

safe-haven metal to new heights and bringing the glittering

$3,000 milestone into view.

Spot gold climbed to a record $2,911.30 a troy ounce

on Monday - its seventh record peak to date in 2025. Prices are

already up nearly 11% so far this year after a staggering 27%

gain in 2024.

Trump said on Sunday he will introduce new 25% tariffs on

all steel and aluminium imports into the U.S., adding that he

will announce reciprocal tariffs, applying them to all countries

and matching the tariff rates levied by each country.

"Gold is very clearly targeting the $3,000 level and the

market is incredibly strong, almost relentless. Now its only a

question of when it will scale the level and not if it will,"

independent analyst Ross Norman said.

"One should expect to see retracement on profit-taking, but

we never do, which reflects that the underlying momentum is very

very powerful."

The tariff plans are broadly viewed as inflationary and

capable of sparking trade wars, thereby increasing the demand

for safe-haven assets like bullion, traditionally regarded as a

hedge against inflation and geopolitical instability.

US PREMIUM

Worry over import tariff plans materialised in U.S. gold

futures, with key contracts trading at a premium to the

spot price, currently at about $28.

London bullion market players are racing to borrow gold from

central banks, which store bullion in London, following a surge

in gold deliveries to the United States, sources told Reuters.

"Gold in the Bank of England vault is trading at a discount

to the wider market. This has seen week-long queues to withdraw

the metal," said Daniel Hynes, senior commodity strategist, ANZ

bank.

Global bullion banks are flying gold into the United States

from trading hubs catering to Asian consumers, including Dubai

and Hong Kong, to capitalize on the unusually high premium.

Gold in COMEX-approved warehouses stood at

34.60 million ounces, a more than 90% rise since late November,

and at their highest level since June 2022.

The London Bullion Market Association also reported on

Friday that the amount of gold stored in 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.

CENTRAL BANK DEMAND

Analysts and traders have noted that central bank demand

will remain robust in 2025 and propel prices further.

Central banks bought more than 1,000 tons of the metal for

the third year in a row in 2024, the World Gold Council (WGC)

said in a quarterly report.

In the final quarter of 2024, when Trump won the U.S.

election, buying by central banks accelerated by 54% year on

year to 333 tons, the WGC calculated, based on reported

purchases and an estimate of unreported buying.

China's central bank added gold to its reserves in January

for a third straight month, official data showed.

"With the PBoC resuming its bullion purchases in January,

along with China's decision to allow insurance funds to now

invest in gold, such moves also appear to bolster bullion's

bullish momentum," said Exinity Group chief market analyst Han

Tan.

China, the world's biggest bullion consumer, will also allow

some of its insurance funds to buy gold for medium- and

long-term asset allocations as part of a pilot project, the

country's financial regulator said.