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This theory came up years ago when sites such as ZeroHedge were claiming JP Morgan controls a precious metals international scam and there isn’t enough physical gold or silver to cover everything. People were told to buy as much physical gold and silver as possible because it was all about to burst. Silver went to $50 and then collapsed and it was never mentioned again.

Is this theory back doing the rounds?

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The difference now is that professional market participants act on this "theory" by physically moving a significant amount of gold from UK to US. And "weeks-long" withdrawal queues certainly do not look great and confidence inspiring.

And there is the example of Poland which has repatriated all of its gold from UK years prior and stories like this: https://x.com/SenatorRennick/status/1891051795159429514

And yet this physical transfer of gold has had largely zero impact on the price of gold. Nobody was fretting about 'where will we source Poland's gold?'

Well, there's the notion that price no longer quite reflects what's going on under the surface. Certainly, it's in the interests of an entity experiencing a run on its reserves to do everything it can to obfuscate any indication that a run is taking place, including suspicious price shifts. Perhaps it's even more suspicious that such clear movement isn't being reflected in price volatility. If there were no trouble, a small shift reflecting physical movement wouldn't be too dangerous to allow to happen. But what if it wouldn't be a small shift?

>there isn’t enough physical gold or silver to cover everything

What does this even mean in the context of trading derivatives of commodities? Of course there isn't, people financed other purchases by borrowing precious metals and selling them, or trading futures on margin with no physical position. Isn't that literally what this market is?

And, like it or not, it's the endpoint for all holdings of non-productive assets. Lease the metal back to traders and make 1%; hold it and pay 1% in storage fees.

Never mentioned again? You haven't been on the right parts of the Internet. It's still a common belief. Probably true too

I do suspect BoE doesn't have enough gold to deliver now, it looks like so

It’s also standard practice to delay or slow walk withdrawals when you know they’re going to run you dry.

There may be practical issues that explain delays. Consider a team who are staffed to suit normal activity. Then there is a period of increased activity, the team fall behind.

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