Missing Metals: The Big Gold Squeeze

A constant stream of Boeing 737s packed full of gold are flying into America.

Much of the bullion is coming from London, where the Bank of England (BoE) is having some… issues delivering its customers’ gold.

BoE is a major gold depository which claims to hold more than 5,000 metric tonnes of gold in its underground vaults. The precious metal is held for both central banks and commercial groups.

But lately it’s taking much longer than usual to withdraw bullion from the Bank of England.

Here’s the Financial Times a few weeks back:

The wait to withdraw bullion stored in the Bank of England’s vaults has risen from a few days to between four and eight weeks.

Since then, the problem has gotten worse. Suddenly gold in BoE vaults is being valued $20/oz cheaper than equivalent bullion in New York vaults. The cost to lease gold and silver has increased by roughly 300%.

That’s strange. Media outlets like the FT are speculating that the spike in lease rates and price differences are being driven by expected tariffs on precious metals.

This week the BoE held a press conference, in which they explained that the delays are due to the fact that gold is heavy, and there aren’t enough vans to transport it quickly enough. If it were possible, my eyes would have rolled a complete 360 degrees.

Some of us in the gold community remain skeptical. We speculate on more nefarious happenings behind the scenes.

What if the Bank of England leased out too much of its gold? “Leasing” out metals is a common practice for bullion banks, as it generates a small amount of income on assets that are otherwise dormant.

And the Bank of England isn’t the only place where strange happenings are occurring in the precious metal space…

Ron Paul, The Fed, and Bessent

Long-time Fed Chairman Alan Greenspan famously once said, “central banks stand ready to lease gold in increasing quantities should the price rise.”

To me, it sure sounds like that’s an admission of a gold price suppression scheme. It would make perfect sense, because the dollar’s primary competitor has always been gold. In order for the dollar to shine strongest, gold needs to be kneecapped.

That Greenspan quote is why I’m so excited by the news this week that Ron Paul may assist DOGE in auditing the Federal Reserve. A user on X (formerly Twitter) suggested to Elon Musk that Ron Paul should assist in this effort, and Elon responded, “Good idea.”

This would be a lifelong dream of many of us coming true. Ron Paul has been a principal opponent of the Fed since his early days as a Congressman. His book End The Fed is an all-time classic.

Who knows what Ron Paul and DOGE would find if it audited the Fed? Evidence of precious metal price suppression? Perhaps…

All of this is occurring as we have our first U.S. Treasury Secretary who is a gold enthusiast. Scott Bessent has said gold is his #1 portfolio position, and for once we truly have someone in this position who understands the appeal of hard money.

And in other news this week, the South Korean Mint suddenly suspended gold bar sales. The organization said it is, “facing problems with sourcing supply and managing demand”.

More evidence that the squeeze is on…

Big Physical Squeeze

Major things are happening. It’s glorious to see the big squeeze finally taking shape.

For decades big banks have been manipulating the price of gold and silver lower. They’ve been fined for it many times, but it’s always a fraction of their profits. I think these shenanigans may be over.

It’s likely that many bullion depositories have leased out too much of their holdings, and may not be capable of delivering their customers’ metal in a timely manner (or possibly at all).

Now that the physical gold and silver squeezes are actually happening, we’re about to see who gets exposed as the tide goes out.

During times like these, it is extra important to own physical bullion. If you buy an ETF, I strongly recommend buying Sprott’s PHYS for gold, and PSLV for silver.

These options have slightly higher expense ratios than GLD and SLV, but I believe they have all the metal they claim to.

I put GLD and SLV in the “could be exposed during low tide” category. Many have speculated that these ETFs may hold a portion of their metal as paper contracts, or even in unallocated vaults. I don’t claim to know for sure, but the Sprott products are my preferred option.

Of course, physical bullion is a fantastic option as well. Gold is at all-time highs, but we think it’s just getting started.