(Money Metals News Service) The global gold market is experiencing seismic shifts, and according to Jan Nieuwenhuijs, a gold market analyst for Money Metals, key developments in gold flows, central bank holdings, and U.S. gold policy signal significant changes ahead.
In a recent interview with Tom Bodrovics on Palisades Gold Radio, Nieuwenhuijs provided insights into the movement of gold from London to the COMEX, the controversial audit history of U.S. gold reserves, and the growing role of gold in the international monetary system.
Gold Flow from London to the U.S.: Trade Tariffs and Arbitrage
One of the most significant trends in the gold market has been the movement of gold out of the London Bullion Market Association (LBMA) vaults and into the U.S. COMEX system.
According to Nieuwenhuijs, this shift began after former President Donald Trump’s election in 2016, when fears of potential tariffs prompted bullion banks and traders to move gold into the U.S.
“We saw a premium rising on COMEX relative to the London spot price, and this was very much tied to tariff concerns,” Nieuwenhuijs explained. “Some dealers wanted to secure gold inside the U.S. before any tariffs were imposed, while others saw an opportunity to arbitrage between the two markets.”
JP Morgan and other bullion banks played a significant role in this arbitrage, purchasing gold in London at a lower price, refining it in Switzerland into 100-ounce and kilo gold bars, and then delivering it to COMEX. The result was record-breaking delivery volumes at COMEX, reflecting rising demand for physical gold within the U.S.
However, Nieuwenhuijs noted that the continuation of this trend remains uncertain.
“Trump’s stance on tariffs has been inconsistent, and that uncertainty itself is driving some of the gold movements,” he said.
The U.S. Gold Reserves: A Controversial Audit History
One of the most contentious topics in the gold market is the status of the U.S. gold reserves, particularly those stored at Fort Knox, West Point, and Denver. Despite claims by the U.S. Treasury that the gold is audited, Nieuwenhuijs has written extensively on the flaws in these audits.
The most recent U.S. gold audit began in 1974 following public pressure. The plan was to inspect 10% of the reserves annually, completing a full audit by 1983. However, by 1993, not only had the process failed to meet this timeline, but previous compartments were inexplicably reopened multiple times—violating the intended audit procedure and responsible practices.
“The idea was that once a compartment was audited, it would be sealed permanently,” Nieuwenhuijs explained. “Yet, in the 1990s and 2000s, we saw compartments being reopened multiple times with no clear justification.”
By 2008, a full inventory check had been completed, but since then, only the seals on vaults have been inspected—not the gold itself. Questions remain about whether any of the U.S. gold has been leased, swapped, or otherwise encumbered in financial transactions — such activities have never been disclosed or potentially even examined.
Nieuwenhuijs called for a new, independent audit, stating, “We need a transparent process with third-party verification to truly confirm that the gold is there.”
Gold Revaluation and Its Impact on U.S. Financial Policy
A crucial issue tied to U.S. gold policy is the valuation of its reserves. Currently, the U.S. Treasury values its gold holdings at just $42.22 per ounce—far below the market price of over $2,000 per ounce.
“This outdated valuation is a legacy from the Bretton Woods system, which collapsed in the 1970s,” Nieuwenhuijs said. “While other central banks mark their gold to market value, the U.S. continues to downplay gold’s role, which aligns with its strategy to maintain the dollar’s dominance.”
Revaluing gold to its market price could unlock approximately $700–800 billion in new liquidity for the U.S. government. This money could be used to reduce national debt or fund economic stimulus programs, though such a move would also acknowledge the long-term depreciation of the Federal Reserve note dollar against gold.
“If the U.S. were to revalue its gold and use it as collateral for spending, it would inject a massive amount of liquidity into the economy, which could be highly inflationary,” Nieuwenhuijs cautioned.
China’s Secret Gold Accumulation and the Eastern Shift
While the U.S. has been reluctant to highlight gold’s importance, China has taken the opposite approach—quietly amassing massive gold reserves while downplaying its official numbers.
Officially, the People’s Bank of China (PBOC) reports purchasing only 5 tons of gold per month. However, Nieuwenhuijs believes the real figure is closer to 50–70 tons per month when accounting for undisclosed purchases in London and other markets.
“China wants to reduce its dependency on the U.S. dollar, but they don’t want to make it obvious,” Nieuwenhuijs noted. “If the world knew exactly how much gold China was buying, the price would skyrocket, making it harder for them to accumulate more.”
China’s approach aligns with broader trends in the East, where countries like Russia, Saudi Arabia, and India are also increasing their gold holdings to hedge against financial instability and potential sanctions.
A Global Deleveraging and the Future of Gold
The increasing demand for gold from central banks signals a broader economic shift.
According to Nieuwenhuijs, the world is at the end of a major debt cycle, where excessive credit expansion has created imbalances that must now be corrected.
One way to address these imbalances is by allowing the gold price to rise, increasing the base of the global financial system while reducing reliance on debt-backed assets.
“Gold is at the bottom of the financial pyramid, with everything else—stocks, bonds, and currencies—resting on top of it,” Nieuwenhuijs explained. “When there is too much leverage in the system, gold’s role as a neutral asset becomes more important.”
As geopolitical uncertainty grows and economic policies become more erratic, Nieuwenhuijs believes gold will play an increasingly critical role in the global monetary system.
“The world is shifting, and gold is the asset that provides stability,” he concluded. “We’re seeing central banks position themselves for this new reality, and that’s a powerful signal for where gold is headed.”
Final Thoughts
The gold market is undergoing profound changes, driven by global trade tensions, geopolitical uncertainty, and shifting central bank policies. The movement of gold from London to the U.S., the lack of transparency in U.S. gold audits, and China’s aggressive accumulation all point to a world where gold is becoming more valuable as a financial anchor.
For investors and policymakers alike, understanding these trends is crucial. Whether through revaluing reserves, increasing transparency, or shifting away from dollar dependence, the role of gold in the global economy is poised to expand significantly in the years ahead.
For more in-depth research from Jan Nieuwenhuijs, and to learn more about investing in gold and silver, visit MoneyMetals.com.
Key Questions & Answers
The following are the key questions and answers from the Palisades Gold Radio interview with host Tom Bodrovics and Money Metals’ gold analyst Jan Nieuwenhuijs:
What prompted the movement of gold from London (LBMA) to COMEX in the U.S.?
The movement of gold from London to COMEX began largely due to concerns over trade tariffs, particularly after Donald Trump’s election in 2016. U.S. dealers sought to secure gold inside the country before any tariffs were imposed, while bullion banks engaged in arbitrage by purchasing gold in London, refining it in Switzerland, and delivering it to COMEX. This activity created a premium on COMEX relative to the London spot price, leading to record-breaking delivery volumes in New York.
What are the concerns about the U.S. gold reserves audit process?
The U.S. gold audit process has been controversial due to its inconsistencies and lack of transparency. The original audit plan, launched in 1974, aimed to inspect 10% of the reserves annually and complete the process by 1983. However, audits were repeatedly delayed, compartments were reopened multiple times without clear justification, and official procedures were not followed. Since 2008, only the seals on vaults have been checked rather than the gold itself. Nieuwenhuijs argues that a full, independent audit is necessary to ensure the integrity of U.S. gold reserves.
Why does the U.S. still value its gold at $42.22 per ounce?
The U.S. maintains an outdated valuation of its gold reserves at $42.22 per ounce, a legacy from the Bretton Woods system. This valuation serves to downplay gold’s role in the financial system and reinforce the dominance of the U.S. dollar. If the U.S. were to revalue gold at market prices (over $2,000 per ounce), it could unlock $700–800 billion in new liquidity. However, such a move would acknowledge the long-term depreciation of the U.S. dollar against gold.
How much gold is China really accumulating?
While the People’s Bank of China (PBOC) officially reports purchasing only 5 tons of gold per month, Nieuwenhuijs estimates the real figure is closer to 50–70 tons per month. China’s strategy involves buying gold in London and other markets while underreporting its actual holdings to avoid triggering a price surge. China’s broader goal is to reduce its dependency on the U.S. dollar while quietly increasing its gold reserves as a hedge against financial instability.
What role does gold play in global deleveraging?
Gold serves as the base of the financial system, with all other assets—stocks, bonds, and currencies—resting on top of it. As global debt levels become unsustainable, the system must deleverage, which often involves a rising gold price. This process reduces reliance on debt-backed assets and increases the value of gold as a neutral store of wealth. Central banks, particularly in China, are positioning themselves for this shift by accumulating gold while reducing their exposure to the U.S. dollar.
What would be the effects of revaluing U.S. gold reserves?
Revaluing U.S. gold reserves to market prices would inject a significant amount of liquidity into the financial system, potentially $700–800 billion. This could be used to reduce national debt, fund a sovereign wealth fund, or provide economic stimulus. However, such an action would also signal an official acknowledgment that the U.S. dollar has lost substantial value over time, potentially weakening confidence in the currency.
How are Eastern countries shifting away from the U.S. dollar?
Countries like China, Russia, Saudi Arabia, and India are increasingly diversifying away from the U.S. dollar by accumulating gold and exploring alternative payment systems. China, for instance, is developing the mBridge digital currency system, which allows for cross-border settlements outside the SWIFT network. Russia is also exploring gold-backed trade settlements, and Saudi Arabia has been discreetly increasing its gold holdings through purchases in Switzerland. These moves signal a gradual but determined effort to reduce reliance on the U.S. dollar in global trade.
Could the U.S. use gold to create a Sovereign Wealth Fund?
Yes, the U.S. could potentially use the value of its gold reserves to establish a Sovereign Wealth Fund. This would involve revaluing gold to market prices and using the unrealized gains as a financial backstop. However, doing so would require the U.S. to acknowledge gold’s true monetary role, which runs counter to its long-standing policy of promoting the dollar as the world’s primary reserve currency.
What is the long-term outlook for gold?
Nieuwenhuijs believes that gold’s role in the global financial system is strengthening as central banks, particularly in China, increase their holdings. He sees gold as a crucial asset in a world undergoing major financial realignments, where countries are shifting away from dollar dependency and preparing for a new monetary order. The growing demand for gold, coupled with concerns about global debt and monetary instability, makes gold a strong asset in the years ahead.
