NEWS: RTRS Reports LBMA Scramble for Gold is Real
London Gold Market Borrows Central Bank Gold After U.S. Shipments
London Gold Market Scrambles for Central Bank Gold After U.S. Shipments
GoldFix News
Yesterday Reuters reported increasing stress on LBMA gold inventories and a move to borrow Central Bank Gold to compensate for it. Here is GoldFix coverage of that news
Gold Flows Tighten London Supply
London’s bullion market is under pressure as traders rush to borrow gold from central banks following a surge in shipments to the U.S., two sources told Reuters. The Bank of England, a key storage hub for central bank gold, now has a four-week wait time for releases—far longer than the usual few days. The BoE declined to comment.
Gold Shipments Surge on U.S. Tariff Fears
While President Trump has not explicitly included gold in his tariff plans, speculation alone has driven increased deliveries to New York. Market participants are hedging positions on COMEX or capitalizing on the rising premium of COMEX futures over London spot prices.
London’s Liquidity Squeeze
London, home to the world’s largest over-the-counter (OTC) gold market, is feeling the strain. “The BoE isn’t a commercial vault and isn’t equipped to handle the surge in borrowing requests,” said Robert Gottlieb, former head of precious metals at Koch Supply and Trading. The free float—gold available for immediate OTC trading—has declined after the wave of shipments to New York.
Record Deliveries to COMEX
Over the past two months, 12.2 million troy ounces have been delivered to COMEX-approved warehouses, boosting stockpiles there by 70% to 29.8 million ounces—the highest since August 2022.
BoE Governor Addresses Concerns
The British Parliament’s Treasury Committee took notice, with one member questioning BoE Governor Andrew Bailey about the risks. Bailey downplayed the concerns, stating, “We are not in the gold standard anymore,” but acknowledged London’s importance, adding, “If you want to trade and use your gold, you need to have it in London.”
Global Impact
With less gold available in London’s vaults, demand has increased for leased metal to maintain OTC liquidity. Other global trading hubs are also feeling the effects. “The logistical challenge of moving large amounts of gold from Europe to the U.S. is amplifying these stresses,” said Alexander Zumpfe of Heraeus Metals. Markets in Asia, particularly Singapore and Hong Kong, are also experiencing spillover effects.