LONDON- Gold stocks held in New York vaults registered with CME Group have jumped almost 50% since the end of last week after the exchange launched a new contract and a price premium since the outbreak of the coronavirus encouraged stockpiling.

The premium on CME's Comex exchange over spot gold traded in London rose sharply again on Tuesday as supply routes remained partially closed and banks and brokers wary of the price gap reduced trading.

CME said late on Monday that gold stocks in Comex-registered vaults totalled 15.9 million ounces, a record high and their highest level since ever and worth around $26 billion.

Of the new arrivals, 4.8 million ounces were 400-ounce bars of the type used in London, which cannot be delivered against Comex's main gold futures but are eligible for new contracts launched on Monday to address the supply concerns. 

Gold futures on Comex leaped above London spot prices two weeks ago after coronavirus control measures grounded passenger airlines on which gold usually shipped and closed several major precious metals refineries.

Traders feared it would be impossible to ship gold from London, a major storage centre, to settle contract obligations in New York, where much more gold trades than is stored.

Adding to the difficulty, Comex's main gold futures run on 100-ounce bars, meaning 400-ounce bars from London must be melted down and recast, usually in Switzerland, before shipping to New York.

Higher prices create an incentive to move metal, and the stockpile in Comex-registered vaults has surged from 11 million ounces at the end of last week and less than 9 million ounces two weeks ago, CME data showed.

But worries over settlement of the existing futures persist, despite CME saying it will offer instruments to link it with its new contract.

The premium for the most-traded June contract rose to $50 - or 3% - above London spot gold from around $25 in recent days.

There are currently 357,369 of these contracts active representing 35.7 million ounces of gold for delivery in June.

"Capacity in the market is massively lower and risk appetite is massively lower," said a source at a gold-trading bank in London.

More gold was on its way to New York and Comex stocks would continue to rise, they said. Traders also said the partial reopening of several Swiss refiners this week would increase supply. 

Investors on Comex typically do not take delivery of gold, using the exchange instead to gain exposure to gold prices and rolling their positions forward to future months.

Of around 200,000 contracts for April delivery active on March 23, when prices on Comex began to rise sharply above spot gold, around 25,000 equivalent to 2.5 million ounces have been taken to delivery, according to CME data. 

(Reporting by Peter Hobson. Editing by Jane Merriman and Susan Fenton) ((Peter.Hobson@thomsonreuters.com; +44 207 542 0083;))