GOOD: GOLD'S AUDIT AFTER 5 MONTHS AND THE FANTASMA OF THE DEFAULT JANUARY

[Igor Pereira]

The integrity of the London gold market faces its most critical test of the year. The annual audited report of the Cambial Equalisation Account (EEA) the United Kingdom, for the fiscal year ended on 31 March 2025, has not yet been published.

By Igor Pereira, Financial Market Analyst & Junior Member WallStreet NYSE

We have already exceeded the five-month delay mark, an administrative silence that raises serious suspicions about the real solvency of the reserves held by the Bank of England (BoE).

Robert Lambourne, an analyst who meticulously monitors BoE's balance sheets, points out that this delay strengthens the thesis that the central bank may be operating with dangerously low fractional reserves, possibly complicit in price suppression mechanisms.

To understand the severity of the delayed audit, we need to revisit the "black swan" event that took place at the end of January this year. At the time, the LBMA (London Bullion Market Association) entered a state of "technical default" (delivery failure in T+60).

The physical market has stopped. The official narrative was laughable: they blamed " logistics bottlenecks", lack of trucks and even the weight of gold bars, generating jokes in the sector about the slow delivery. However, institutional analysis suggests a much darker reality: LBMA could not borrow gold from BoE quickly enough to cover physical delivery demands.

The questions I'm asking now are the same questions the auditors are probably asking behind closed doors:

1. Did the Bank of England lend metal belonging to other nations to cover the LBMA crash in January?

2. Was that gold returned?

3. Is the audit delayed because the physical numbers don't match the accounting records?

ETF GLD (SPDR Gold Shares) Connection

The situation worsens by analysing the GLD , the world's largest gold ETF. Reports from Ronan Manly (Bullion Star) indicate persistent flaws in the disclosure of how much of the gold from the fund (approx. 1,010 tons) is undercosted in the BoE.

With JP Morgan and HSBC — two of the largest gold derivatives operators — now acting as joint custodians, opacity is total. If GLD gold was "rented" to cover delivery deficits in January, ETF quota holders have only paper promises, not physical metal.

The confirmation that the delay in auditing is due to the lack of physical gold would be the final catalyst for decoupling between the "paper price" and the "physical price".

• Short Term: Uncertainty creates volatility. We can see erratic movements while insiders try to position themselves before the news becomes mainstream.

• Medium/Long Term: If the market loses confidence in London's delivery capacity, we'll see a bank race to physical metal. The prize (agius) on the spot price will explode, and the XAU/USD will tend to seek new historical maxims, ignoring the manipulation of future markets.

Given this systemic risk scenario in London's custody:

1. Avoid Paper ETFs: Instruments such as GLD and SLV carry excessive counterparty risk at the moment. They are the first to suffer in case of physical default or force majesty.

2. Focus on Physical and Mining: The actual exposure to gold (physically allocated outside the banking system) or high-quality mining companies (who own the asset on the ground) is the only protection against LBMA insolvency.

3. XAU/USD position: Keep positions purchased (long), but use stops broad technicians to avoid short-term volatility generated by margin manipulation. The macroeconomic foundation of physical scarcity remains unchanged and extremely high.

The five-month delay is not bureaucracy. It's a smoke signal. And where there's smoke in the gold market, there's usually an empty safe.