London gold vault Bait-and-Switch as LBMA prepares bigger changes

By Ronan Manly

In a coordinated development which signals more than meets the eye, the Bank of England and London Bullion Market Association (LBMA) have together moved to begin reporting gold and silver vault holdings data on a 1 month lagged basis instead of the 3 month lagged basis under which they had been previously reporting vault stocks since 2017.

London Vault Reporting – As Clear as Mud  

In addition to the Bank of England’s gold vaults in London, LBMA vault reporting applies to commercial precious metals vaults in London operated by the LBMA bullion banks HSBC, JPMorgan, and ICBC Standard Bank, and vaults operated by the LBMA security providers Brinks, Malca-Amit, Loomis and G4S. 

Under these new vault reporting changes, it for example now means that as of the end of August, the Bank of England and LBMA have reported claimed gold bar holdings in the London vaults for month-end July (a 1-month lag) instead of for month-end May (a 3-month lag).

The LBMA has also made the same reporting change (from a 3-month to a 1-month lag) for Good Delivery silver bar inventories claimed to be in the LBMA London vaults. Note that while the Bank of England London vaults hold gold bars in custody storage for central bank and bullion bank clients, the Bank of England does not store silver, so the silver data reported by the LBMA applies to just the other seven vault operators listed above.

Putting aside for a moment as to why gold and silver vault stocks in London are not already reported at the end of each and every business day as happens in the COMEX precious metals vaults in New York, this London vault reporting change is suspicious in that the reason stated from both the LBMA and Bank of England is that its an altruistic move to improve gold market transparency. Furthermore, both parties claim that they are following a recommendation (for improved transparency) set out in the UK regulators’ Fair and Effective Market Review (FEMR).

The trouble with this claim is that the FEMR’s final report (of which the Bank of England was one of the authors) was published over 5 years ago in June 2015, so the explanation now being pitched by the LBMA and Bank of England is both hard to fathom as difficult to swallow. That card had already been played by the LBMA in 2017 so the real motive is something else.

Convincing the world that the London gold and silver vault inventories are healthy may be part of the strategy, but not in the way you might think. The real agenda in my opinion is to prepare the London vaults for COMEX gold and silver contract delivery by giving a more recent glimpse into vault stocks but without giving COMEX like visibility. How could a one month lag meet COMEX vault approval requirements you might ask? By bending the rules would be the answer. Whether this plays out the way I think it will, we will have to wait and see.

Gold in the Vaults but already Owned 

The London gold stocks as of July month-end now total a claimed 8,790 tonnes. Of this total, 5,342 tonnes is claimed to be stored at the Bank of England, meaning that 3,448 tonnes are claimed to be stored in the LBMA London commercial vaults. Subtracting the 2,588 tonnes of ETF gold held in the LBMA London commercial vaults at the end of July, this leaves just 861 tonnes of gold not at the Bank of England and not in ETFs. This 861 tonnes represents gold held by other allocated holders such as institutions, sovereign wealth funds, family offices and ultra high net worth individuals. The bullion banks gold and silver floats then have to compete with these entities to get their fill as well as by raiding GLD and by borrowing gold from central bank clients at the Bank of England.   

Total gold stocks CLAIMED to be held in the London vaults as of the July month-end, Bank of England, LBMA vaults, and ETFs. Source:

Singing from the same Song Sheet

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