A Sudden Tightening in Physical Precious Metals
The global bullion market is tightening fast. Even as gold and silver spot prices have pulled back sharply, physical demand has surged to levels not seen in years. Around the world — from India and China to the U.K. and Australia — buyers are lining up to secure physical precious metals while they still can.
That rush is now rippling through the supply chain. Refiners and sovereign mints, facing soaring costs and higher lease rates, are refusing to produce new products unless they are already sold. Many are choosing to run lean rather than risk sitting on high-priced metal. The result: delays, shortages, and a rapidly thinning supply pipeline across nearly every major bullion category.
Wholesale Sheets Read the Same: “SOLD OUT”
SD Bullion is seeing this shift unfold in real time. Offer sheets from some of the largest wholesalers in the U.S. are nearly identical — “SOLD OUT” in all caps across most gold and silver products. Silver Eagles, Silver Maple Leafs, and Silver Britannias now show 7–10 day delays for fulfillment.
In normal markets, major distributors can ship immediately. Today, however, even the biggest names in the industry are warning that shipments may not move until early November — and that assumes no further surge in demand.
It’s the early stage of what’s often referred to as the “Supply Crunch” phase of a bullion rally: premiums start to climb, inventories dry up, and refineries struggle to keep up as new orders pile in.
Why the Market Is So Tight
Lease rates — the hidden cost of holding physical precious metals — have jumped sharply in recent weeks. That spike makes it expensive and often unprofitable for mints and refiners to carry inventory. To protect margins, they’re producing only what’s pre-sold, leaving little to no flexibility to respond when demand suddenly spikes.
At the same time, large institutional and family-office buyers have returned to the market, often purchasing metal in dollar-based amounts rather than by ounce — further draining available supply. This combination of global demand and cautious production is what’s fueling today’s scarcity.
What It Means for Investors
Periods like this are more rare but instructive. When physical availability falls while paper prices drop, it signals an imbalance between market price and real-world demand. The last time this happened, premiums surged and delays stretched for weeks.
For now, investors who can find live inventory are acting quickly to secure it. As SD Bullion’s team notes in the latest market update, “Whatever’s available today may not be available tomorrow.”
