LONDON – Insurance firms have started covering charter flights to carry gold, helping to ease logjams in the bullion supply chain that caused prices to diverge sharply in different markets, the London Bullion Market Association (LBMA) said on Thursday.
Gold is usually moved between countries in the holds of passenger planes but most flights around the world have been grounded by measures to control the spread of the coronavirus.
Worries that it would be impossible to ship gold quickly from London to New York, the two biggest trading hubs, had pushed US gold futures prices far above London spot levels.
"Charter flights have now been approved by insurers in terms of shipping gold," LBMA CEO Ruth Crowell said in a conference call with market participants, calling it a "positive and significant development".
Charter flights remained expensive, however, because of increased competition, she said.