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If you’ve recently flown from London to the U.S., something very valuable may have been in the cargo hold with your luggage: gold bars. The Wall Street Journal is reporting America’s demand for gold is so strong that big banks like JPMorgan Chase (NYSE: JPM) are buying bars in London and flying them to New York on commercial jets. To be certain, JPMorgan’s motives go further than just satisfying their customers.
Buying gold in bulk is a winning deal for them. According to the Journal, the price of gold in America is much higher than in London. So, JPMorgan and other banks are taking advantage of that by purchasing London gold bars at a discount and then selling them to American investors at a profit. They’re not just looking in London either. Buyers are searching for gold in Switzerland too.
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Ironically, the cheapest way to get them here quickly is via commercial jet. The Journal says the domestic price of gold futures has risen by roughly 11% this year while going in the opposite direction in London, where it’s down about $20 per ounce since December. That makes buying gold across the pond a smart play.
Goldman Sachs‘ research team recently noted the price of gold has increased by a whopping 40% since January 2024 and more importantly, they believe there is still room for upside. They project the price of gold will rise by another 8% this year and settle at $3,100 per ounce. That’s a significant upward adjustment from their prior projection of $2,890 per ounce.
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Goldman attributes some of the spike in gold prices to high demand from the world’s central banks. They have been steadily increasing their gold reserves since Russia’s assets were frozen as punishment for invading Ukraine. Goldman’s forecast also cited concerns that Trump’s tariffs could kick off a trade war that destabilizes the global economy. Their analysts believe that scenario could push the price of gold as high as $3,300 per ounce.
