London running out of gold and silver?

https://www.bloomberg.com/news/arti...re-fueling-a-chaotic-hunt-for-gold-in-london/

 

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I think that the bigger trend here is toward increasing demand for physical gold, as opposed to the "paper" ETF version. If an investor or a sovereign buyer (i.e. central bank) is looking to purchase gold as catastrophe insurance or as a hedge against dollar debasement/asset confiscation a la Russia, there is no real alternative to physical gold. ETFs/derivatives/mining stocks really won't cut it if the world falls apart again in a 1914 style crisis.

 

The news report I cited is highlighting stress in the paper market system as a result of Trump's tariff threat. Short traders on the COMEX are facing huge losses if the tariffs are realized as EFP premiums are blowing out. So the rush is on to get physical metal into the COMEX system, but the LBMA doesn't have enough to satisfy the imminent demand. Things could get very spicy in the next few weeks (if the tariffs are enacted). I posted more about this issue here (starting at post #91 and on through the end of the page).

 

Reuters (no paywall) report:

More:
https://www.reuters.com/world/uk/lo...-bank-gold-after-big-shipments-us-2025-01-29/

 

Gold would probably be EXEMPT from any tariffs, as would most of what comes from the UK (Trump wants closer ties to the UK and wants them closer to us since Brexit).

 

threats work just as good, Trump has everybody doing a double take what tariff is he going to do next looking at Canada and Mexico both getting 25%

 

https://www.theguardian.com/us-news...test-news-politics-live-canada-mexico-tariffs

 

https://www.mining.com/web/lbma-liaising-with-cme-group-and-us-authorities-on-comex-gold-premium/

What exactly are they "liaising" about?

 

LBMA held a webinar this morning. I listened in. I posted notes on what I got out of it here:

https://www.pmbug.com/threads/bank-of-england-delaying-gold-deliveries-4-to-8-weeks.8022/post-123954

 

LBMA silver may only have ~3 months of runway left at the current drain rate:

https://x.com/pmbug/status/1892979711245947118

 

I'll admit that settlements and custodial issues are NOT my strong point.

What do YOU think this all means. Unless LBMA was short huge amounts of gold -- as opposed to on behalf of clients -- this could all be much ado about nothing.

What are loan rates one must pay to borrow gold ?

 

I believe that bullion banks in the USA are desperate to acquire physical gold and silver to cover a gaping hole in their bullion trading desk balance sheets as the "short COMEX futures, long LBMA spot contract" arbitrage trade has switched from profitable to very expensive (risk). The US bullion banks are hoovering up all the gold and silver globally that isn't nailed to the floor or already claimed by China/India. The LBMA is already defaulting on spot gold delivery obligations. I think the LBMA defaults on spot silver delivery within the next 3 months or so if current conditions persist (sooner if they accelerate).

Bob Coleman did a good job of explaining what is happening:

https://threadreaderapp.com/thread/1891583167686914277.html

With respect to loan rates:

https://www.goldpriceforecast.com/explanations/gold-lease-rate-glr/

 

Who are these gold bullion banks ?

 

https://x.com/AndrewHigsdrew/status/1892645739563544587

 

There's reference to a BOA report in recent days on gold...and also some accounting of long/short positions (derivatives ?) that "...the Fed knew about for decades."

Anybody know what they are talking about ?

 

I wrote an article this morning about the silver market and the nascent #silversqueeze 2.0 effort:

https://www.pmbug.com/threads/silver-squeeze-2-0-comprehensive-thesis.8137/