In fact, it can’t move fast enough.

Logistical issues combined with quirks of the market are making it difficult for traders to get enough bullion where it’s wanted. As a result, gold and silver are selling at unusually large premiums over the global benchmark price in some Asian markets.

“The incentive to hold gold is a lot lower. It’s going from west to east now,” said Joseph Stefans, head of trading at MKS PAMP SA, a gold refining and trading firm. “We are trying to keep up as best we can.”

The rotation of metal around the world is part of a gold-market cycle that has repeated for decades: when investors retreat and prices drop, Asian buying picks up and precious metals flow east — helping to put a floor on the gold price during times of weakness.

Then, when gold eventually rallies again, much of it returns to sit in bank vaults beneath the streets of New York, London and Zurich.

Since peaking in March, gold prices have tumbled 18% as the Federal Reserve’s aggressive rate hikes caused mass liquidation by financial investors.

More than 527 tons of gold has poured out of New York and London vaults that back the two biggest Western markets since the end of April, according to data from the CME Group Inc. and London Bullion Market Association.

At the same time, shipments are rising into big Asian gold consumers like China, whose imports hit a four-year high in August.

While plenty of gold is heading east, it’s still not enough to meet demand. Gold in Dubai and Istanbul or on the Shanghai Gold Exchange has traded at multi-year premiums to the London benchmark in recent weeks, according to MKS PAMP — a sign that buying is outstripping imports.

“Demand typically picks up when prices fall,” said Philip Klapwijk, managing director of Hong Kong-based consultant Precious Metals Insights Ltd. “Buyers want to source metal at the lower price and in the local physical market in question there may not be sufficient metal available when the price falls, so the local premium increases.”

Gold in Thailand is also trading at a premium to London prices, due to a lack of supply and weakness in the local currency, according to Jitti Tangsithpakdi, the president of Thailand’s Gold Traders Association.

In India, it is silver that is seeing big premiums. The differential has soared recently to $1, more than triple the usual level, according to consultancy Metals Focus Ltd.

“Right now the demand for silver is huge as traders restock,” said Chirag Sheth, the firm’s principal consultant in Mumbai. “Premiums could remain elevated during the festival season that concludes with Diwali.”

Analysts say that much of the precious metals feeding Asia’s appetite is coming out of vaults run by CME Group, which back the Comex futures market in New York.

Market dislocations early in the pandemic drove a massive surge in prices there, forcing banks to build large stockpiles to cover their futures positions. In recent months gold has traded at a discount on the Comex compared to London, and those inventories are now being drawn down to meet Asian demand.

However, it can be slow going, partly because Asian buyers tend to prefer one-kilogram bars over larger sizes. To fill a standard shipment box of 25 kg of gold, physical traders must take delivery of multiple Comex gold futures, often backed by bullion in different warehouses.

Traders say they are facing other logistical challenges as well, which are contributing to the high Asian premiums.

“Getting stuff on boats or on planes is a bit harder than it used to be,” said MKS PAMP’s Stefans. “It’s really just a classic example of demand far out-pacing supply.”

(By Eddie Spence and Sing Yee Ong, with assistance from Swansy Afonso, Suttinee Yuvejwattana and Masumi Suga)