There’s been a fair bit of noise in the media recently about a supposed “gold shortage” in London. If you’re looking to buy gold or other precious metals including silver, palladium and platinum then this deserves your attention. Don’t worry, it’s not time to panic, instead, it might be an opportunity in disguise.

What’s Actually Happening?

Since President Trump won the US election in November 2024, investors have been trying to get ahead of the impact of potential tariffs. This is true now more than ever as he announced tariffs as high as 50% on most important consumer goods as he crusades towards a more protectionist trade environment. One key move that investors are making is to secure physical gold inside US borders to protect against the inevitable inflation we expect to see in the United States; this inflation will ripple across the globe as prices increase globally to make up for the cost of trade with the USA. The surge in demand for gold and other metals is being channelled through the COMEX market in New York, which requires specific bar sizes and vaulting arrangements in the States.

“The COMEX is the principal market in which precious metals contracts are traded.
The COMEX is administered by the CME Group, which oversees around 3 billion
options and future, making it the largest derivatives market in the world.

This has created a price premium in the US and gold has been trading above the global spot rate. Naturally, that’s led to an arbitrage rush: buy in London, sell in New York, and pocket the difference before any new tariffs bite” says Bullion By Post.

It’s Not a Shortage, It’s a Logistics Headache

Moving gold at scale is no small task. The delays are real, but they’re not because London’s run out of bullion. Here’s what’s holding things up:

  • Weight and segregation: Gold bars weigh around 400oz (12.5kg). Not all of it’s for sale as a lot of it is locked down in ETFs or held in reserve by central banks (and banks are buying more gold right now!).
  • Security limits: Couriers can only carry so much in one van. There are limits on load size and how many vans can run in a day.
  • Flight queues: Gold is usually transported by plane. But there’s a backlog, and only certain flights can handle the cargo due to the weight, security and insurances required to transport it, that’s before considering ground logistics of moving large quantities of the precious metal.
  • Refinery bottlenecks: COMEX wants 1kg or 100oz bars. Much of London’s gold is 400oz, so it has to be melted and recast, mostly in European refineries with finite capacity and additional expense.
  • US intake delays: When the gold arrives, it still has to be assayed and weighed before it’s good to go.

The result? What used to take days is now taking weeks. Cue headlines about shortages. But the metal is still there and available to buy and sell, it’s just stuck in a queue and ultimately, this restricts supply which in turn increases demand and drives the value of the metal up.

What the Vault Data Tells Us

The London Bullion Market Association (LBMA) publishes monthly vaulting data. Comparing January 2025 with October 2024 (pre-election), total gold holdings have dipped by just under 3%.

Not massive on the face of it, but keep in mind that most of that gold belongs to entities that aren’t selling (central banks, ETFs, etc.). The LBMA has also responded, confirming they’re monitoring the situation with the CME Group and US authorities. And while COMEX premiums aren’t typical in the West, they’re more common in markets like China and India where regulation and tax distort pricing.

Tariffs Are Kicking In

Since the initial delay, Trump has pushed forward with 25% tariffs on goods from Mexico and Canada, and 20% on imports from China. Now there’s speculation that the EU might be next.

This uncertainty, layered over ongoing geopolitical risk and inflation concerns, is sending gold prices ever higher. And that’s got implications for everyday buyers too.

What This Means If You’re Buying Gold

The institutional world’s fixation on COMEX is starting to spill into the retail space:

  • Gold leasing rates are up: This could raise costs for wholesalers and manufacturers who lease gold to hold stock. Expect some of that cost to be passed on in retail premiums or jewellery making charges.
  • Refining capacity is stretched: Refineries are prioritising COMEX bar formats. That means potential delays in producing smaller bars or coins for retail buyers.

That said, casting large bars and making blanks for smaller retail bars are different processes so if refiners can keep up with sourcing raw material, the impact for smaller investors may stay minimal. In other words, because COMEX buys in larger unit sizes than the majority of retail investors, the cost of gold won’t be influenced dramatically, instead what will influence the price is the diversion of smaller unit sizes to be molten down and recast into larger units for COMEX but right now, with the logistical challenges and the backlog, the demand from COMEX isn’t so great that this is necessary, but it could be on the horizon.

How to Play It Smart

If you’re looking to invest in physical gold, don’t be swayed by panic. The long-term fundamentals remain bullish, and central banks are still buying at record pace.

To sidestep the volatility, consider UK-based vaulting solutions like The Royal Mint Vault, Direct Bullion, Bullion By Post or Gold.co.uk. It allows you to store gold securely in the UK, with the option to take delivery if needed. It’s a sensible middle ground for those who want access to physical bullion without the US-centric drama.

Where to Track the Market

Gold isn’t running out but the way it’s moving around is changing and this could eventually start impacting prices. If you’re thinking of buying, do it with a cool head, solid research, and an eye on what’s next.

There is an opportunity on the horizon, it is up to you to decide whether that opportunity is now or not. Whilst I’m buying gold and silver now in larger quantities than I did before, it would not serve you well to do the same based on a single article you read online. Therefore, seek independent advice before making any investment decision and remember, as with all investments, the value of them can fall as well as rise so only invest any amount of money you’re prepared to lose.