by Ronan Manly, BullionStar:
In a recent roundtable discussion, BullionStar’s Claudia Merkert sat down with two of the most respected voices in the precious metals industry: Eric Yeung, a global macro strategist, and Ronan Manly, a renowned precious metals analyst. Together, they explored the latest trends in the gold market, including the unprecedented movement of physical gold into the U.S., the growing rift between paper and physical gold markets, and the broader implications of economic and geopolitical developments on gold’s future.
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The Surge in Physical Gold Transfers: Unprecedented Market Movements
One of the most pressing topics in the conversation was the massive influx of gold into the U.S. market. Over the past two months, an estimated 2,000 metric tonnes of gold have moved from major global gold hubs—such as London, Switzerland, Singapore, and Australia—into U.S. markets. Of this, nearly 700 metric tonnes have been transferred to the COMEX, with the remaining 1,300 metric tonnes believed to have been absorbed through over-the-counter (OTC) markets. This movement raises significant questions about the motivations behind such large-scale transfers.
Eric and Ronan emphasized that this shift is far from just commercial. The scale and speed of the gold inflows suggest the involvement of a powerful entity—likely one with considerable political and financial influence—that is actively repatriating gold. This theory gains further credence following statements from the CEO of StoneX, one of the world’s largest commodity traders, who confirmed these numbers on several occasions.
Paper vs. Physical Gold: The Growing Discrepancy
Another central topic discussed was the widening gap between the price of physical gold and its paper counterpart. While the LBMA (London Bullion Market Association) and COMEX have long been key players in the gold market, their roles are increasingly being called into question. Historically, the COMEX was seen as a price discovery mechanism, but now it is clear that the growing demand for physical gold is highlighting deeper liquidity issues in the LBMA’s unallocated gold system.
According to Ronan, the increased demand for physical delivery from COMEX signals deeper liquidity concerns within the LBMA’s unallocated gold system. This has led to a rise in gold lease rates and extended delivery times, with Eric pointing out that some orders are stretching from a typical T+2 settlement timeframe to as long as T+60 at present.
Eric likened the LBMA system to a “paper gold fire brigade” that relies on a thin layer of physical reserves to control market fluctuations. However, as demand intensifies, this mechanism is becoming increasingly fragile, raising concerns about the sustainability of the paper gold market and potential systemic risks.
