http://www.zerohedge.com/news/2013-07-19/jpm-eligible-gold-plummets-66-one-day-total-gold-fresh-all-time-low
Submitted by Tyler Durden on 07/19/2013 16:31 -0400
Registered gold on the COMEX falls to another new low for this bull market, to below 30 tonnes.
I enjoyed the perspective Harvey Organ put on it this evening.
Or is this just another example of reckless disregard, fostered by large bonuses playing with other people's money?
If gold starts to run, the ensuing rush to the exits could be rather impressive.
Nick of Sharelynx.com does a rough calculation of the open interest/registered or dealer's gold. The number of owners per ounce is up to a bull market high of 46 claims for every ounce registered as deliverable. There is a chart of this below.
Granted that this is not a realistic expectation, that everyone would stand for delivery, but it is an interesting metric that shows the relative balance between paper claims and physical reality. No wonder the Gold Forwards have been negative for the past nine days.
Let's see what happens. Confidence in the US commodities business has been racked by scandal after scandal, from price fixing to the theft of customer accounts. Little enough effort seems to have been made to reform it, to make it more transparent and efficient in price discovery. The attitude seems to be that if you don't trust the markets, so what?
I am not saying that they will not be able to finesse their way through August. There are plenty of ways to do it, higher prices being the text book example. But one has to wonder how long they can keep this up, especially if the storms in the currency markets start blowing come November.
Stand and deliver.
JPM Eligible Gold Plummets By 66% In One Day To Just Over 1 Tonne, Total Gold At Fresh All Time Low
For over a month, JPMorgan managed to mysteriously avoid matching up the gold held in its (world's largest) vault with the Comex delivery notice update. However, as of today, that particular can will be kicked no more. Starting yesterday, JPM reported that just under 12,000 ounces of Eligible gold (the same Registered gold that two days earlier saw its warrants detached and convert to eligible) were withdrawn from its warehouse 100 feet below CMP 1. But it was today'smove that was the kicker, as a whopping 90,311 ounces of eligible gold were withdrawn, accounting for a massive 66% of the firm's entire inventory of non-Registered gold, and leaving a token 46K ounces, or a little over 1 tonne in JPM's possession.
Needless to say, today's massive move which increasingly puts JPM's gold holdings in the danger zone vis-a-vis future delivery notices which just refuse to stop, has pushed total JPM vault gold to a new all time low of just 436k ounces, or a little under 14k tonnes with just 12 tonnes, or 390k ounces, of Registered gold left and rapidly draining. And to think that two years ago around this time JPM had over 3 million ounces of gold in its possession.
Finally, those who believe there is a connection between the ongoing run on JPM's vault gold, the suppressed price of the metal, the redemption of Bundesbank gold, and the fact that 3M GOFO has now been negative for 10 straight days or the longest period in history it has been below zero, and indicating an unprecedented gold collateral shortage, you are correct.
Finally, putting it all in context, this is what 1 ton of gold looks like in the real world courtesy of Demonocracy:
http://jessescrossroadscafe.blogspot.com/2013/07/comex-registered-gold-fall-to-another.html
18 JULY 2013
COMEX Registered Gold Falls To Another New Low Ahead of Option Expiration and August Delivery
Registered gold on the COMEX falls to another new low for this bull market, to below 30 tonnes.
I enjoyed the perspective Harvey Organ put on it this evening.
"Tonight, the Comex registered or dealer inventory of gold lowers again and remaining below the 1 million oz mark to 950,441.152 oz or 29.56 tonnes.Perhaps I am missing something but one has to wonder what goes through someone's mind who is short into a market structure such as this, wherein the ability to deliver into demand appears to be increasingly impractical. Do they think that they are operating on insider information? Are they?
This is dangerously low especially when we are coming up to the August delivery month. Remember in June we had almost 31 tonnes of gold stand for delivery."
Or is this just another example of reckless disregard, fostered by large bonuses playing with other people's money?
If gold starts to run, the ensuing rush to the exits could be rather impressive.
Nick of Sharelynx.com does a rough calculation of the open interest/registered or dealer's gold. The number of owners per ounce is up to a bull market high of 46 claims for every ounce registered as deliverable. There is a chart of this below.
Granted that this is not a realistic expectation, that everyone would stand for delivery, but it is an interesting metric that shows the relative balance between paper claims and physical reality. No wonder the Gold Forwards have been negative for the past nine days.
Let's see what happens. Confidence in the US commodities business has been racked by scandal after scandal, from price fixing to the theft of customer accounts. Little enough effort seems to have been made to reform it, to make it more transparent and efficient in price discovery. The attitude seems to be that if you don't trust the markets, so what?
I am not saying that they will not be able to finesse their way through August. There are plenty of ways to do it, higher prices being the text book example. But one has to wonder how long they can keep this up, especially if the storms in the currency markets start blowing come November.
Stand and deliver.
Reuters notices gold backwardation and even quotes Naylor-Leyland
Submitted by cpowell on Fri, 2013-07-19 20:14. Section: Daily Dispatches
Gold Futures Hiccup Indicates Demand Outpacing Supply
By Mike Kentz
Reuters
Friday, July 19, 2013
Reuters
Friday, July 19, 2013
A dislocation in the gold futures market indicating that demand for physical delivery of the metal is now far outweighing supply has intensified in recent weeks, increasing concern in the market that the change may not be a momentary blip and participants may have become over-leveraged.
For the full story:
Price smash just made things worse for gold banking system, Maguire says
Submitted by cpowell on Fri, 2013-07-19 18:16. Section: Daily Dispatches
2:14p ET Friday, July 19, 2013
Dear Friend of GATA and Gold:
London gold and silver trader and silver market rigging whistleblower Andrew Maguire tells King World News today that the recent gold price smash has increased demand so much as to endanger the whole fractional-reserve gold banking system. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
http://news.goldseek.com/GoldSeek/1374261184.php
-- Posted Friday, 19 July 2013 | | Comment - New! By David Baker and David Franklin The physical gold market continues to develop in the most wonderfully counterintuitive way. While the paper gold price languishes below US$1,300 per ounce, physical demand out of China is now reaching previously unforeseen levels. If you’ve heard this story before, it’s more of the same, except that the demand tonnage is now so high as to be almost comical. According to data released by the Shanghai Gold Exchange, the amount of gold contracts settled for physical delivery on its exchange reached a staggering 1,098 metric tonnes year-to-date as of the end of June.1 This is an astoundingly large amount of physical gold. For perspective, 1,098 tonnes represents approximately 40% of the entire estimated global gold mine production in 2013. It also represents roughly 1/8th of the US Treasury’s official gold reserves, and over 100% of China’s stated official gold reserves. If the rate of physical delivery on the Shanghai Gold Exchange continues at current levels, it will deliver the equivalent of over 100% of global mine production by the end of this year… all through one exchange. In contrast, the COMEX futures exchange in New York, where the bulk of US gold futures are traded, saw a measly 160.7 tonnes of physical delivery requests over the same period (year-to-date to June).2 Although the paper volume on the COMEX dwarfs that of the Shanghai Gold Exchange, the level of physical delivery requests is only 15% of that seen in Shanghai. If the Shanghai data is true, when combined with the gold imports going into China via Hong Kong, we now have a situation where China is buying the equivalent of all global gold mine production produced on a monthly basis. How that can coincide with a gold price drop of US$400 per ounce over Q2 is beyond our capability to explain, but it does mean that China is now the undisputed hub for physical gold. Interestingly, China’s demand for physical gold does not seem to be benefitting the growth of gold ETF products within the country. Bloomberg recently reported that China’s first two exchange-traded funds backed by bullion both had disappointing debuts, with Huaan Asset Management Co. reportedly raising only $195 million out of an expected $400 million at launch.3 Although the press has naturally concluded that this news indicates waning gold demand in China, we can’t help but think it shows that China’s gold interest is primarily focused on the physical metal, as opposed to financial products that trade on exchange. Certainly if the time ever comes where the physical gold market sets price discovery for the gold price (as opposed to the futures market) it seems highly likely that the first place that will happen now is within Shanghai itself. Whether there’s a link between China’s increasing physical gold deliveries and the drop in gold inventories within the COMEX and GLD ETF remains to be seen, but whoever is supplying China’s gold appetite is supplying it in size. Despite gold’s lackluster price performance, these developments strongly suggest we could be in for an interesting summer in the weeks ahead. Gold is a finite resource - if China’s current purchase rates continue, it is going to own a significantly large proportion of global gold reserves. http://sprottgroup.com/invest-with-sprott/
http://news.goldseek.com/COT/1374262446.php
Gold and silver - large specs increase net long positioning while commercials increase net short positioning...
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http://www.silverdoctors.com/second-dutch-bank-to-follow-abn-amro-close-gold-accounts/
Rabobank has just followed in the footsteps of ABN Amro which effectively defaulted by halting deliveries of gold bullion in April, as the Dutch bank will close customers’ gold accounts effective September 1st!
With the GOFO now negative for a record 8th consecutive day, it appears the wave of bullion bank defaults warned of by William Kay may be just getting started.
With the GOFO now negative for a record 8th consecutive day, it appears the wave of bullion bank defaults warned of by William Kay may be just getting started.
As Beurs reports (via google translate), Rabobank has given no explanations for the move, simply stated that customers can no longer acquire precious metals after September 1st, and will have up to 1 year to transfer open accounts to another institution:
Rabobank grabs the slump in the gold and silver market to get rid of accounts linked to these precious metals. It follows in the footsteps of ABN AMRO that made possible the delivery of physical gold and silver a few months ago. It is striking that another Dutch bank takes a decision that the liquidity of physical gold and silver limited.From September 1, customers can no longer precious metals purchases. Who then some in his account has standing, given a year to the balance to sell or transfer to another bank. The bank would be interested in such investment have seen decline for some time. Hence the decision to the product no longer to offer .“Why does Rabo it?”, Asks Pascal Paepen of De Morgen himself. , “I do not know” was his answer.Were there a little too much to lose customers who had speculated? Or would the bank no longer dealing with products that are not in the market? The popularity of the precious metals account may significantly decreased by the rise of all kinds of ‘trackers’ and ‘ETFs’.
(courtesy Bill Holter/Miles Franklin)How much is too much?
India has imported over 900 tons of Gold so far this year while China has imported just shy of 1,100 tons. To put these amounts into perspective, the world (ex China) produces 2,200 tons per year. As an aside, with prices where they are right now, production will decrease in the future as some mines are not profitable at these levels. My question is this, with China and India buying almost every ounce that comes out of the ground "how much is too much"?"Too much" as in what level is THE level where existing inventories cannot absorb the demand from "the rest of the world" as India and China are speaking for the current production. Where is the Gold going to come from? It is already clear that existing inventories are being squeezed as evidenced by the backwardated GOFO rates 8 days running. I would like to point out that this is not only the longest streak, but more days total than ALL of the last 20 years combined!Also lurking in the shadows is allegedly a second Dutch bank to call a halt to delivering out Gold. Why would this be? Why would any of this be? Why is the Gold market so tight after so much "selling"? Shouldn't inventories be not only flush with product but simply overflowing with so much metal that they don't know what to do with it? Where did all of this "metal" that was sold, in a panicked, fast and furious fashion go? Did it evaporate? Is it being held in some alien, invisible vault system that we don't know about?Of course not...because it was not GOLD in the first place. We are now more than 90 days past the April "fool's" selling of supposed Gold. This is enough time to look back and see for sure what happened. At the time "we" said that the selling was not physical Gold and in fact was merely paper contracts without any real metal backing. "We" said that only those who wanted a lower price would ever sell futures in the fashion that they were sold. Well guess what, WE were right. If we were wrong then Gold would be plentiful right now...it is not. Not only is the Gold market "tight", it is tighter than it has ever been over the last 20 years.I took some serious flack back in April when I said that "the plan" all along was to default. I said this because I knew that there was no way 1,000+++ tons of real metal could, or ever would in that fashion hit the market over less than 12 trading hours. So here we are, 90 days later and inventories have done nothing but bleed everywhere you look. Not only that but as I see it, some deliveries have not even been made. Unless someone can show me where JP Morgan has concluded their May deliveries or delivered anything at all on their June deliveries I will assume that I have read their reports correctly and are in serious arrears. Please, send me data that illustrates the movement of Gold from JP Morgan to those contractually entitled to receive it.That said, I will again state what I wrote back in April. We are facing a major default in both the Gold and Silver markets on COMEX which has a whopping 29 tons of registered Gold inventory available for delivery. I also believe we will see the LBMA in the same boat though they do not publish inventory numbers. All that is needed is to look at the inventory drain coupled with the explosion in demand caused by fraudulent prices to see that this will come to a head shortly. August COMEX deliveries of Gold should be at least 30 tons which would take care of all existing registered for delivery inventory...and then what? What happens after August? Like I said "How much is too much?" ...demand that is.
Regards, Bill H
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