London’s gold market is facing a critical transformation as its traditional role as the global gold trading hub comes under pressure from multiple directions. The crisis stems from a surge in US-bound gold shipments coinciding with China’s ongoing accumulation, creating a two-way drain on London’s physical gold reserves. This situation has exposed the fragility of the long-standing bullion banking model, which relied on readily available gold for leasing and trading. The market strain is evidenced by extended wait times at the Bank of England and diminishing liquidity in London’s over-the-counter trading. The crisis reflects a deeper shift in the global gold market structure, where traditional financial trading is giving way to physical possession priorities. Major nations, including China and Russia, have been steadily accumulating physical gold while reducing their exposure to US bonds, effectively removing substantial portions of gold from the leasing pool. This transformation is further complicated by gold’s elevated Tier 1 status and growing recognition as a strategic asset rather than merely a financial instrument. With only about 300 million ounces of London’s estimated billion-ounce stockpile available for trading, the market faces a fundamental restructuring as banks and nations compete for an increasingly scarce pool of leasable gold.