LBMA claims record amount of gold in London’s vaults

By Ronan Manly – January 4, 2020

This week the LBMA in London claims that a record 8,228 tonnes of gold is held in the London vaults, vaults which include those at the Bank of England and the commercial vaults of such bullion banks as JP Morgan and HSBC.

But beyond the headline figure, how much of this gold is available to underpin the gargantuan daily trading volumes of the London gold market? Very little as it turns out.

Instead of cheer-leading and calling up the Guinness Book of Records, should not the Market be sounding alarm bells that in terms of the giant London casino, there is practically no gold to back up mammoth outstanding unallocated gold claims? Continue reading…

Given that LBMA monthly London vaulted gold holdings data is published on a 3-month lagged basis and was (with initial data going back to July 2016), the “record high” of London vaulted gold that the LBMA is referring to here is in terms of the 3.5 years since the LBMA made monthly vaulting data public from July 2016 onwards, i.e. the pink line in the chart below.

While the LBMA’s monthly gold vaulting data does not explicitly split out the amount of gold held by the commercial vault providers versus the amount of gold held at the Bank of England, the Bank of England helps in this endeavor as it publishes its own

(also on a 3 month lagged basis). This then means that the total held by the LBMA bank and commercial vaults can be inferred by subtracting the Bank of England vault holdings.

5152 tonnes – Total gold claimed to be held in Bank of England gold vaults in London as of Sept 2019. Chart: