The market has 380 million ounces in outstanding spot contracts but only 36 million ounces available for immediate use. Do the math. It’s a recipe for disaster. Technical defaults are already happening as delivery timelines get missed. So much for London’s reliable gold market.
What’s causing this mess? A perfect storm. Speculation about U.S. import tariffs. America’s “safe haven” status. Countries hoarding physical bullion. And let’s not forget the extreme paper-to-physical leverage that everyone pretended wasn’t a problem… until now.
The gold is literally flying across the Atlantic. A staggering 12.2 million ounces shipped to U.S. COMEX warehouses in just two months. That’s about $134 billion worth of gold. JPMorgan alone plans to move $4 billion worth in a single month.
An Atlantic gold exodus is underway — millions of ounces flooding into COMEX as London’s vaults empty at an alarming rate.
Banks are scrambling, loading bullion onto commercial flights after transporting it in high-security vans to London airports. This exodus has caused COMEX inventories to surge 75% since November 2024, reaching 29.8 million ounces.
Meanwhile, London’s vaults are getting emptier by the day. The LBMA’s claims about gold liquidity are increasingly questioned as the physical reality contradicts their reassurances. The fundamental premise of London’s spot gold market is under siege. The discrepancy between paper claims and physical holdings can no longer be ignored. Delivery times have extended from the standard 2-3 days to a concerning 4-8 weeks timeframe.
Some experts are even speculating about gold reaching $10,000 per ounce. The message is clear: physical possession trumps paper contracts.
Global gold markets could break apart in a severe crisis, with pricing discrepancies between major trading hubs. Faith in the “paper claims” model is eroding fast. And who can blame investors? When push comes to shove, you can’t wear a paper certificate around your neck.
