Zerohedge Edit-The LBMA Doesn't Have the Gold

London’s Gold Market Can’t Satisfy Current U.S. Demand

Zerohedge Edit- London’s Gold Market Can’t Satisfy Current U.S. Demand

London's bullion market is under strain. A surge in gold shipments to the U.S. has left traders scrambling to borrow from central banks, with wait times at the Bank of England stretching from days to weeks. The gold supply chain, long considered reliable, is now exposed to cracks that weren’t apparent before.

The Just-in-Time Model Breaks Down

For decades, bullion banks operated on the assumption that gold was always available. The system worked because gold isn’t consumed—it’s recycled, leased, and traded. When supply disruptions occurred, banks could borrow metal, cover their needs, and replace it later. That model is now failing.

A new kind of buyer has entered the market: one that doesn’t see gold as a financial instrument but as money itself. Countries like China and Russia have spent years accumulating gold, prioritizing it over U.S. bonds. Their strategy has chipped away at the available leasing pool, leaving Western banks exposed.

The Musical Chairs of Gold Supply

Bullion banks relied on a game of musical chairs, borrowing gold to meet short-term needs. But when enough chairs are removed—when buyers refuse to lease their holdings—banks are forced to compete for an ever-dwindling supply. That’s what’s happening now.