The Bank of England faces mounting pressure as unprecedented demands to withdraw gold have stretched its processing times to four weeks, from a typical one-week turnaround, banking sources told Reuters on Tuesday.
The delays signal potential operational challenges at Britain’s central bank, undermining confidence in London’s status as a global gold trading center at a critical time.
“The key with the BoE is that they are not a commercial vault so not prepared to handle the onslaught of gold borrowing banks are requesting from the central banks,” said Robert Gottlieb, former head of precious metals at Koch Supply and Trading.
The strain comes as financial institutions rush to move bullion to the US amid possible trade restriction concerns, depleting London’s available trading stocks while US holdings have surged 70% to 30 million ounces.
When questioned about the risks at Parliament’s Treasury Committee on Wednesday, Bank of England Governor Andrew Bailey appeared to downplay the situation. “We are not in the gold standard anymore, it doesn’t have significance for policy in that sense,” Bailey said.
The bottleneck at the BoE has caused ripple effects across global trading hubs, with markets in Singapore and Hong Kong experiencing pressure, according to Alexander Zumpfe at Heraeus Metals.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
Gold Rush 2020: The Excitement Has Begun
The images are burned in many of our imaginations. The Klondike. The California Gold Rush....