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The spike in gold (and silver) metal is moving from London to New York (COMEX) over the last couple of months is due to the tariff threat. The tariff threat caused the blowout in EFP and folks short on the COMEX are following the economic incentive to take delivery of London metal. They were basically reiterating everything that Bob Coleman has been saying since December.
LBMA webinar has ended. This is what I got out of it (not necessarily in order as Q&A rambled a bit here and there):
LBMA honchos claim gold market if functioning as intended. The spike in gold (and silver) metal is moving from London to New York (COMEX) over the last couple of months is due to the tariff threat. The tariff threat caused the blowout in EFP and folks short on the COMEX are following the economic incentive to take delivery of London metal. They were basically reiterating everything that Bob Coleman has been saying since December.
London gold only supplied half of COMEX vault inflows. The other half supplied by refiners producing COMEX standard bars (shifting production from LBMA standard) due to the COMEX premium (following the economics).
Who are the actors taking London metal? Folks (hedgers) who are net short on the COMEX. Folks buying spot (LBMA) and selling futures (COMEX) are trying to unwind EFP positions as lease rates are spiking.
The LBMA honchos are as in the dark on the details of Trump's tariff plans (with respect to precious metals) as anyone else. Will there be exemptions? Will they be tariffed? No one knows, so the markets are acting to remove the risk.
LBMA reiterated at least twice that they do not have a shortage of physical metal. They again asserted that delivery delays are a logistical issue. They also asserted that the way pundits/analysts calculate free float - the amount of vaulted metal that actually unencumbered and deliverable - is flawed. They claim that essentially all the vaulted metal is free float. They stated that central bank metal stock has been reducing as evidence that central bank metal is available. They claimed that ETFs will sell their metal to the market when premiums/price dictates. Gold flows to the best price. I'm not convinced on this issue - there's a lot more to it and they just glossed over this subject.
They mentioned silver a little bit, but mostly focused on gold. For silver, they did mention that COMEX buyers of London metal may actually need the physical metal as they are generally industry players needing silver for production of goods. They laughed at the idea of a #silversqueeze. They claimed there is bountiful metal to continue meeting industrial demand.
Moving metal from London to COMEX requires actors to check numerous (at least 5) boxes for different logistical challenges including having a refinery recast the metal into COMEX standard forms.
One LBMA honcho commented that gold tends to rise when global trade contracts and right now we are seeing global trade contracting. He did not clarify what metric he was using to measure global trade. The comment seemed maybe disingenuous if he's talking about trade volume conducted via SWIFT as the BRICS are ramping up trade outside of the SWIFT system. So, to my mind, there is a bit more to that story than he let on.
There were a few other questions about lease rates, and such, but I was unable to distill the answer commentary into anything coherent.
"Rules of origin determine where goods originate, i.e. not where they have been shipped from, but where they have been produced or manufactured.
The tariff classification, value and origin of a good are determining factors based on which the customs tariff treatment is applied."
The ingots don't bear any signs about the country of origin of the concentrate
--> US custom can't identify the country of origin of bullion coming from London
--> US tariffs cannot hit bullion coming from London.
"Part 134 of the U.S. Code of Federal Regulations (CFR), defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin.”
If US custom look at the bar stamp and consider as country of origin the refinery country, US tariff threats don't concern 90% of the bullion sitting in London. That's why LMBA says tariffs are also not believed to incur in the future.
So, Comex traders - whom usually are denied large delivery orders by the LMBA bullion banks - apparently are shipping hundreds of tons of bullion from London to NY even if
currently there are no US tariff threats concerning that bullion
no US tariff threats are believed to incur in the future
US tariffs cannot hit that bullion
This is the narrative pushed by mainstream media + LMBA + Bob Coleman, the raising star among the hedge fund managers.
Hey, good note taking Bug, you got a shout out from Prov Vince.
One word of caution as I just don't quite trust this Gold rally. First, its mostly left Silver and Miners in mud. Second we know that bankers like gold as they have most of the metal. The market sniper has had the 2,900 level on Gold as a long term target and we just about got there. So I might hedge some by selling GLD call spreads and getting a few puts. Staying long the silver and miners.
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1) In early December Comex short position holders, generally bullion banks, recognized a sharp increase in customer accounts readying to stand for delivery on the gold and silver contracts. Since many of those banks are also brokers and insiders, this information could be discerned from non-public data such as details on those customer accounts readying cash for delivery and requests for exceptions to position limits.
2) Instead of bullion banks just exiting short positions to protect their short position, bullion banks prepared to deliver metal. Why didn’t they just close to avoid the buying deluge? That’s an answer for another day. Covering shorts would certainly have resulted in a price spike.
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Forgot to mention … tariffs have nothing to do with this. This is all about customer accounts at comex thirsty for metal.
I should just stop there, but I want to address the EFP spread situation. I see this as a mix up of cause and effect. EFP is not causing the market turmoil, nor is the inability of the Bank of England to move metal. The core reason is the surge in customer accounts buying metal at comex.
Cause and effect. The EFP spread blew out because of the surge in buying in NYC AND there isn’t enough metal to settle those longs. If there was enough metal at comex, there would be no price disengagement with London spot.
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1/9 The biggest buyers of physical gold and silver right now are the Banks who are involved in the precious metals derivatives and trading markets!
Are growing risks of default or failures imminent?
2/9 Below is a report from the Office of the Comptroller of the Currency. They compile a quarterly report on Banks involved in Derivative Trading. Amazingly, four large US banks held 88.1 percent of the total banking industry notional amount of derivatives. These derivative notional amounts increased in the third quarter of 2024 by $10.7 trillion, or 5.2 percent, to $218.8 trillion.
3/9 Part of these derivatives are precious metals. I have 2 charts below that show a snap shot of the 4 largest holders. The report is delayed by 3 months so the 3rd quarter of 2024 is the most recent data. Precious metals derivatives grew from the second quarter of 2024 of $486,472,000,000 to $566,512,000,000 in the 3rd quarter of 2024. This is an increase of $83 Billion.
4/9 The chart below gives a great snapshot of the growth we have seen in derivatives by bank in the precious metals markets. Please note in 2023 the big jump was simply moving gold derivatives from the interest rate swap category to the precious metals category.
5/9 What does this all mean? In summary banks are on the hook if the cost of obtaining physical metal rises and these derivatives they have sold and used as indexing or money management transactions need to be backed or related to actual physical metal rather than deferred spot contracts. The sudden rise of leasing and financing costs associated with the need to obtain physical precious metals rather than relying on existing spot or spot deferred paper contracts adds unforeseen exposure.
6/9 Basel 3 is also being implemented in the USA. Please note the term Tier or Level One Asset is commonly misquoted. This phrase has to do with the bank’s cost of capital of funding. The focus for this article should be centered on the term QCCPs or qualifying central counterparty. The Comex of Nymex would be a good example. The chart below is from the OCC’s Quarterly Report on Bank Trading and Derivatives Activities. At the end of 2ndQuarter of 2022, Basel 3 was to begin implementation. We started to see a higher weighting of centrally cleared derivative contracts. I believe the gold and silver coming onto the Comex and Nymex are not only due to Bank’s concerns over tariffs but also to remove as much of their liability from traditional OTC transactions commonly used in London. Basically, de-risking Bank Balance Sheets and placing the responsibility of clearing onto regulated exchanges such as Comex and Nymex. We should start to see in future OCC reports a noticeable increase in Centrally Cleared Derivative Contracts for precious metals.
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8/9 The final chart below is something I have created over the years to measure the leverage of paper ounces to physical ounces in the futures markets. Since the election, the futures market (Comex) has been in the process of deleveraging. Meaning a wave of physical deliveries are reducing the paper ounces of existing open interest relative to physical ounces held in Comex depositories backing those paper ounces. I have compared the dates of 10/15/2024 to 2/4/2025. Silver paper ounces to physical ounces dropped from 10.26 to 8.71 and Gold paper ounces to physical ounces dropped from 6.92 to 3.26.
9/9 What few are expecting is a market where this deleveraging continues. Higher carrying and lease costs are also having a similar effect. This may allow more price discovery by the physical metal versus traditional finance instruments. Many players who have been benefiting from this arbitrage have gotten stung by being short the futures and have disengaged or taken severe losses. President Trumps seems to be setting a policy going forward which makes tariffs a more involved strategy for tax revenue and trade policy. I do not believe this volatility is going away anytime soon.
When BullionStar repeatedly called on the LBMA to uphold its own mission – reforming for integrity and transparency in the precious metals market – how do you think LBMA responded?
Did LBMA commit to clearer reporting of unencumbered gold? Did LBMA commit to end the price manipulation?
No, instead LBMA sent an operative and his secretary to BullionStar's Bullion Retail Center in Singapore to inform us that there are inaccuracies in our coverage. The secretary’s assigned task, we were told, was to read our blog posts as soon as published!
However, they kindly suggested a solution – if we sent our blog posts to the LBMA for review before publishing, they could ‘correct’ any inaccuracies for us!
We rejected LBMA’s offer to censor us.
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But this giant Ponzi scheme is coming to an end as more wealthy nations and individuals wake up to the truth – the self-proclaimed LBMA emperor has no clothes. There isn’t enough gold to back up even a fraction of the paper promises and the run on physical gold has begun.
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JPMorgan said in a filing with CME Group’s Comex that it plans to move about $4 billion in gold from London to New York in February. ...
Problem? ...
BullionStar said:The LBMA has managed to implant itself as a referee in the physical gold and silver markets, yet they work against them with full force.
LBMA feeds the illusion of being both teammate and referee, while in reality playing for central banks, governments, and bullion banks protecting the fractionally reserved fiat monetary system and the fractionally reserved bullion banking system.
LBMA sits at the heart of the enormous paper gold and silver fraud. Naturally, they resist increasing transparency because it would expose their integral role in this misrepresentation.
Many gold vaults contain little to nothing. These vaults safeguard the secret of no gold rather than actual gold itself.
To understand the gold price, we must first understand what dictates it.
Discussions have revolved for many years revolved around gold price manipulation. Sure, gold price manipulation exists, as evidenced by JP Morgan traders being criminally convicted in court and many banks being fined.
However, the elephant in the room is the market mechanics. The LBMA claims to represent the gold industry, but they are the ones protecting market mechanisms that allow inconceivable quantities of synthetic paper gold and silver—hundreds of times greater than the real physical metal.
LBMA also attempts to suppress valid criticism and calls to reform by dictating which speech and actions are permissible.
We urge all miners, wholesalers, refiners, and dealers in the physical precious metals industry to abandon the LBMA and genuinely commit to transparency and trust in the gold market.
... jensendavid.substack.com ...
... helping @Ripple & XRP engineer the replacement of The @federalreserve ...
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The SEC had accused the company and its current and former chief executives of conducting a $1.3 billion unregistered securities offering by selling XRP, which Ripple's founders created in 2012.
The case has been closely watched in the cryptocurrency industry, which disputes the SEC's assertion that the vast majority of crypto tokens are securities and subject to its strict investor...
South Korea's state-run mint is grappling with a gold bar shortage amid robust demand for the precious metal.
The Korea Minting and Security Printing Corporation (KOMSCO), which is responsible for the production and distribution of various security products, suspended sales of gold bars last month.
KOMSCO attributed the suspension to issues with procuring supply of raw materials, according to a Google translation of the notice on its website. The mint typically supplies bullion bars to Korea's commercial banks, stores and online shopping malls.
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The Korea Times
Get the latest on what's happening in Korea from the nation's top English-language media outlet.www.koreatimes.co.kr
While stocks in the Bank of England declined by a similar pace to that seen in January, gold stocks in London’s commercial vaults in fact increased - in contrast with the trend seen last month. This highlights that gold is moving from BoE into the Loco London system but also shows that the market dynamics that led to gold travelling to NY in recent months have somewhat eased. Silver outflows were slightly less than half in February compared to January.
These figures provide an important insight into London’s ability to underpin the physical OTC market.
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Australia’s non-monetary gold exports to the US have surged to record levels with data from the Australian Bureau of Statistics’ monthly trade report revealing the total value reaching $5.272 billion in January.
Gold sales to the US in December 2024 saw a dramatic jump to $1.17 billion, followed by an even more staggering $4.62 billion in January 2025 (87% of the $5.272 billion total), more than twice the value of exports to the same destination for the entire calendar year of 2024.
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