Bank of England delaying gold deliveries 4 to 8 weeks

pmbug said:

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.

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pmbug said:

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.

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Peter89 said:

"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.

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Voodoo said:

Hey, good note taking Bug, you got a shout out from Prov Vince.

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