Some banks unwilling to hand over client-held physical gold and silver?

For some time some of the more outspoken gold commentators, like GATA, have been suggesting that title is held to far more gold and silver supposedly stored in bank's vaults, than is actually there - indeed they even have been questioning Central Banks' holdings of physical bullion - even in Fort Knox. Now there is some anecdotal evidence emerging on the internet and news programmes that may serve to back up some of these claims, at least as far as some commercial banks are concerned.

The theory that physical gold and silver may be in short supply comes about because there appears to be more gold, in particular, supposedly held by the banks than is in reality in existence. While banks do not hold the amount of cash on hand that is owed to depositors at any given time (hence the serious consequences of a run on a particular bank), the premise is that the same may well be applied by these banks to stocks of bullion. In this case, so the banks may say, that if push comes to shove, they would be able to lay their hands on the actual metal fairly quickly - or at the very least provide cash in lieu, although this may not be wanted by the metal owner. It certainly has been assumed that ‘allocated' gold (or silver) is actually kept on hand, but ‘unallocated' bullion may be loaned or sold, but returned or repurchased should the need arise. However the analysts will also tell you that the amount of gold or silver traded in virtual transactions exceeds the global holdings by a large multiple and if everyone insisted on physical delivery of their metal, this would be completely impossible to provide.

If a bank holds physical gold or silver on a client's behalf, storage fees will be being charged, but if that gold or silver is not actually being held in the vaults, but has been say leased out to a third party, would it be fraudulent to continue charging for this ‘storage'? - a point which probably has yet to be challenged legally.