http://www.zerohedge.com/news/2013-06-05/jpmorgan-parts-another-21000-ounces-gold-holdings-drop-new-record-low
Submitted by Tyler Durden on 06/05/2013 17:18 -0400
'Registered gold' is bullion in the Comex warehouse that is available to futures contracts standing for delivery. There are also a much larger number of ounces stored, at least according to reports by some organizations, that is 'eligible' to be sold, if the owner of the bullion should decide to place it in the 'registered' category.
According to the chart below the number of registered ounces at the Comex are approaching a record low. That in itself has some significance, but I think the point of this chart is that the registered category typically reaches these low levels at major market bottoms.
Simply put, owners of bullion are not willing to put their bullion up for sale at the paper gold market price set by Comex. They would rather let it sit in storage and pay fees.
Now, in addition to this, there is quite a bit of controversy and speculation that the bullion banks have been leasing out that customer gold that is being held in storage. That is what is known as rehypothecating.
Rehypothecating simply means that a financial institution uses an asset that is pledged as collateral or assigned for some specific reason as collateral for another transaction of their own. And these days these rehypothecation schemes tend to go to multiple stages like a daisy chain, or dominos. Bank A takes a customer asset and lends it out to Bank B. Bank B uses that same asset as collateral to Bank C. And Bank C uses that same asset once again.
We saw this first level rehypothecation in the collapse of MF Global. That company was using customer assets, whether they be cash, financial paper, and even actual bullion, as collateral with other banks, including JP Morgan it appears, to back their own private speculation in the markets. When the markets turned against them, the collateral was 'called' and the scheme collapsed.
What made that rehypothecation particularly odious is that such assets held by a clearing broker are considered untouchable and 'sacred.' But as it came out in the aftermath of that scandal, we are indeed in different times with regards to oaths, pledges and obligations in finance.
JPMorgan Parts With Another 21,000 Ounces Of Gold, Holdings Drop To New Record Low
Those tens of thousands of outstanding delivery requests against JPM are finally starting to make their way through the pipeline: following the withdrawal of 28,380 ounces of gold after nearly one month of radiosilence out of the vault located below 1 CMP, today the CME reported that another 21k troy ounces of eligible gold were withdrawn from the bank (coupled with the reallocation of another 8.8K registered into eligible), taking the total to a fresh record low of 767,752 ounces.
In the meantime the delivery notices keep climbing, and in the month of June, JPM accounts for over 80% of all delivery activity:
Of course, with disclaimers such as this from the Comex...
The information in this report is taken from sources believed to be reliable; however,
the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness.
This report is produced for information purposes only.
... all bets are off
http://jessescrossroadscafe.blogspot.com/2013/06/comex-gold-registered-ounces-available.html
05 JUNE 2013
Comex Gold Registered Ounces Available Nearing All Time Low - The Risk of Rehypothecation
'What has been will be, what has been done will be done; there is nothing new under the sun.'
Ecclesiastes 1:9
"The commercial world is very frequently put into confusion by the bankruptcy of merchants that assumed the splendour of wealth only to obtain the privilege of trading with the stock of other men, and of contracting debts which nothing but lucky casualties could enable them to pay; till after having supported their appearance a while by tumultuary magnificence of boundless traffic, they sink at once, and drag down into poverty those whom their equipages had induced to trust them."
Samuel Johnson, Rambler #189, January 7, 1752
'Registered gold' is bullion in the Comex warehouse that is available to futures contracts standing for delivery. There are also a much larger number of ounces stored, at least according to reports by some organizations, that is 'eligible' to be sold, if the owner of the bullion should decide to place it in the 'registered' category.
According to the chart below the number of registered ounces at the Comex are approaching a record low. That in itself has some significance, but I think the point of this chart is that the registered category typically reaches these low levels at major market bottoms.
Simply put, owners of bullion are not willing to put their bullion up for sale at the paper gold market price set by Comex. They would rather let it sit in storage and pay fees.
Now, in addition to this, there is quite a bit of controversy and speculation that the bullion banks have been leasing out that customer gold that is being held in storage. That is what is known as rehypothecating.
Rehypothecating simply means that a financial institution uses an asset that is pledged as collateral or assigned for some specific reason as collateral for another transaction of their own. And these days these rehypothecation schemes tend to go to multiple stages like a daisy chain, or dominos. Bank A takes a customer asset and lends it out to Bank B. Bank B uses that same asset as collateral to Bank C. And Bank C uses that same asset once again.
We saw this first level rehypothecation in the collapse of MF Global. That company was using customer assets, whether they be cash, financial paper, and even actual bullion, as collateral with other banks, including JP Morgan it appears, to back their own private speculation in the markets. When the markets turned against them, the collateral was 'called' and the scheme collapsed.
What made that rehypothecation particularly odious is that such assets held by a clearing broker are considered untouchable and 'sacred.' But as it came out in the aftermath of that scandal, we are indeed in different times with regards to oaths, pledges and obligations in finance.
So if there is a rehypothecation scheme going, and there is a run on the bullion banks at these prices, as customers refuse to voluntarily offer their bullion for sale, and other sources of supply become exhausted, eventually a 'market break' will occur and the scheme will be exposed.
And to complicate matters, it is likely that a significant quantity of gold has been leased out from central banks into these rehypothecation schemes that will not be easily returned. This would be considered 'career affecting' and rather embarrassing to the governments.
Like the case of the Madoff fund, many people on the periphery of the transactions knew that there was a likelihood of fraud, and that at the very least, something was wrong. But it is risky to say or do anything, and very lucrative to keep one's mouth shut and hope to plead ignorance of the scheme later on.
Conspiracy is hard to prove unless one has 'smoking gun' admissions on tape, and too often not even then in this culture of fraud where the professional courtesy of moral hazard is more the rule than the exception.
I should note that even in the endgame stages of the exhaustion of a highly leveraged rehypothecation scheme, a more likely outcome would be to let the price of gold rise, and hope that this tempts new bullion supplies on to the market. This would allow the cycle of this scheme can go along for another turn of paper selling and price manipulation.
But I would not doubt that they will try and frighten out holders of bullion with more price raids. That scheme eventually fails as the bullion passes into stronger, more sophisticated hands. And the governments and people of the East are certainly doing their part to make it happen.
So in sum, it will not be the registered inventory at the Comex going to zero that will break this scheme. Rather the registered inventory at the Comex will fall to zero within the context of a greater break in the scheme and a general run on the bullion banks. First one or two, and then a rush. We may continue to see scattered shortages for some time first. Confidence breaks over a long period of time, and then collapses all at once.
I do think that the spike in gold to 1900 was just such an instance. And the opposite was tried in the recent price smackdown, because allowing the price to rise puts some of the derivatives bets of the TBTF financiers at risk.
And at this time I think that the crucial turning point in this scheme occurred in 2000-2001 with the selling of England's gold in an act that became known as 'Brown's Bottom.'
I do not think it is a question of if this rehypothecation scheme fails, but when. I should add that I no longer doubt it is a highly leveraged rehypothecation scheme in the precious metals markets, and probably others as well. The circumstantial and direct evidence is just too persuasive.
Since Germany cannot get its 300 tonnes of sovereign gold back for almost seven years, that tells us that it is a relatively small amount of bullion that is required to collapse this paper pyramid scheme. And so we are likely in the endgame.
So let's see what happens. I think after the worst is exposed, people will remark how obvious it all was. It will be like the housing bubble, which really was an artifact of the CDO pyramid scheme of mispricing of risk, abuse of collateral, and fraudulent representations of ownership and quality.
The government may try to impose some draconian settlement. And I think most of the world, and a goodly portion of their own country, will tell them 'to go shit in their hat,' as my old boss used to say. And then the coverup will begin, the small fry and scapegoats who were involved will be thrown to the wolves, and losses distributed to the innocent. That is where we are now with the latest credit bubble.
The jokers who are behind these types of schemes are bad enough. They are just despicable conmen, no matter how one wishes to cover up their schemes with sophisticated words and jargon. Madoff was simply a thief. And so were the responsible parties at Enron, MF Global, LIBOR manipulation, and so forth.
These schemes of manipulating key prices and commodities is as old as markets, as old as the folly of greed. The notion that markets are naturally virtuous and self-correcting are a ludicrous and harmful fallacy, generally nurtured by conmen who seek to corrupt them.
But their enablers, those who facilitate the scheme and who defend it too often for the rewards of position and pay, are just as bad. And that net reaches further and wider, in to the chambers of government and into the halls of universities.
They will be brought to account eventually. It is for us to see that justice is done in this world in accord with the law. And if the law is corrupt, it is our duty to work for its reform.
If you have your wealth secured in the right ways and places, you may not be overly affected, except perhaps by anxiety and some scarcities of goods that will pass with time. Life does go on.
I do think being prepared is a good idea. But look at those who were ruined by Madoff and MF Global. If you did not have your money with either of them, you were not affected all that badly.
I tend to think that this scheme too will be circumscribed a bit, through a coverup, and the printing of a virtual moat of paper. And I think we all know how to deal with even a serious inflation whether we feel confident of it or not.
Those of us who lived through the serious inflation of the 1970's will remember what it was like. Those on fixed incomes may suffer and we need to make sure that the pigmen do not take advantage of them, or add to their misery. This latest crop of demi-gods knows no shame and has little self-restraint. They are walking occasions of sin. And they are always with us. It is just that sometimes we let down our guards, and justice fails.
History repeats, and remarkably so, because we so easily forget what we and our forethers have learned, and succumb to the same old temptations and excesses of the few.
This is not all that dissimilar in character to the Madoff scheme, which is why it is prohibited. Customers provided the Madoff fund cash, the front men and Bernie Madoff took their fees, and then that money was committed to pay other fund obligations, notably the returns that investors holding paper obligations were owed if they chose to withdraw them. Madoff just cut to the chase and did not bother with the investment part of the deal.
And to complicate matters, it is likely that a significant quantity of gold has been leased out from central banks into these rehypothecation schemes that will not be easily returned. This would be considered 'career affecting' and rather embarrassing to the governments.
Conspiracy is hard to prove unless one has 'smoking gun' admissions on tape, and too often not even then in this culture of fraud where the professional courtesy of moral hazard is more the rule than the exception.
I should note that even in the endgame stages of the exhaustion of a highly leveraged rehypothecation scheme, a more likely outcome would be to let the price of gold rise, and hope that this tempts new bullion supplies on to the market. This would allow the cycle of this scheme can go along for another turn of paper selling and price manipulation.
But I would not doubt that they will try and frighten out holders of bullion with more price raids. That scheme eventually fails as the bullion passes into stronger, more sophisticated hands. And the governments and people of the East are certainly doing their part to make it happen.
So in sum, it will not be the registered inventory at the Comex going to zero that will break this scheme. Rather the registered inventory at the Comex will fall to zero within the context of a greater break in the scheme and a general run on the bullion banks. First one or two, and then a rush. We may continue to see scattered shortages for some time first. Confidence breaks over a long period of time, and then collapses all at once.
I do think that the spike in gold to 1900 was just such an instance. And the opposite was tried in the recent price smackdown, because allowing the price to rise puts some of the derivatives bets of the TBTF financiers at risk.
And at this time I think that the crucial turning point in this scheme occurred in 2000-2001 with the selling of England's gold in an act that became known as 'Brown's Bottom.'
I do not think it is a question of if this rehypothecation scheme fails, but when. I should add that I no longer doubt it is a highly leveraged rehypothecation scheme in the precious metals markets, and probably others as well. The circumstantial and direct evidence is just too persuasive.
Since Germany cannot get its 300 tonnes of sovereign gold back for almost seven years, that tells us that it is a relatively small amount of bullion that is required to collapse this paper pyramid scheme. And so we are likely in the endgame.
So let's see what happens. I think after the worst is exposed, people will remark how obvious it all was. It will be like the housing bubble, which really was an artifact of the CDO pyramid scheme of mispricing of risk, abuse of collateral, and fraudulent representations of ownership and quality.
The government may try to impose some draconian settlement. And I think most of the world, and a goodly portion of their own country, will tell them 'to go shit in their hat,' as my old boss used to say. And then the coverup will begin, the small fry and scapegoats who were involved will be thrown to the wolves, and losses distributed to the innocent. That is where we are now with the latest credit bubble.
The jokers who are behind these types of schemes are bad enough. They are just despicable conmen, no matter how one wishes to cover up their schemes with sophisticated words and jargon. Madoff was simply a thief. And so were the responsible parties at Enron, MF Global, LIBOR manipulation, and so forth.
But their enablers, those who facilitate the scheme and who defend it too often for the rewards of position and pay, are just as bad. And that net reaches further and wider, in to the chambers of government and into the halls of universities.
They will be brought to account eventually. It is for us to see that justice is done in this world in accord with the law. And if the law is corrupt, it is our duty to work for its reform.
If you have your wealth secured in the right ways and places, you may not be overly affected, except perhaps by anxiety and some scarcities of goods that will pass with time. Life does go on.
I do think being prepared is a good idea. But look at those who were ruined by Madoff and MF Global. If you did not have your money with either of them, you were not affected all that badly.
I tend to think that this scheme too will be circumscribed a bit, through a coverup, and the printing of a virtual moat of paper. And I think we all know how to deal with even a serious inflation whether we feel confident of it or not.
Those of us who lived through the serious inflation of the 1970's will remember what it was like. Those on fixed incomes may suffer and we need to make sure that the pigmen do not take advantage of them, or add to their misery. This latest crop of demi-gods knows no shame and has little self-restraint. They are walking occasions of sin. And they are always with us. It is just that sometimes we let down our guards, and justice fails.
History repeats, and remarkably so, because we so easily forget what we and our forethers have learned, and succumb to the same old temptations and excesses of the few.
This is not all that dissimilar in character to the Madoff scheme, which is why it is prohibited. Customers provided the Madoff fund cash, the front men and Bernie Madoff took their fees, and then that money was committed to pay other fund obligations, notably the returns that investors holding paper obligations were owed if they chose to withdraw them. Madoff just cut to the chase and did not bother with the investment part of the deal.
http://www.gata.org/node/12653
Addison Wiggin: The 'zero hour' scenario
Submitted by cpowell on Wed, 2013-06-05 01:18. Section: Daily Dispatches
9:20p ET Tuesday, June 4, 2013
Dear Friend of GATA and Gold:
The Daily Reckoning's Addison Wiggin shows again tonight that he understands Western central banking's racket in the gold market.
"Remember," Wiggin writes, "the main reason central banks are in business -- to benefit their biggest and most powerful member banks. And what's beneficial to U.S. and European banks is gold leasing. Commercial and investment banks lease gold from a central bank at bargain rates -- usually less than 1 percent a year. Then they sell that gold into the private market and plow the proceeds into. ... well, anything that yields more than 1 percent. It's a sweet deal if you're a banker.
"'But then the gold is gone, right?' Yes. If the central bank wants its gold back from the commercial and investment banks, those banks would have to buy gold on the open market -- driving up the price. That's a bad deal if you're a banker.
"So usually there's a tacit understanding: Central banks don't ask for their gold back, and the commercial and investment banks roll over their gold leases. As long as they're earning more than 1 percent, the debt service is easy-peasy.
"But if a central bank asks for its gold back, it's game over."
Wiggin even notes the deceptive accounting used by Western central banks to conceal their gold leasing. He doesn't quite explain why gold leasing is concealed -- to facilitate secret intervention in the currency and gold markets -- but you already have gotten the answer from GATA (and the International Monetary Fund) here:
Wiggin's commentary is headlined "The 'Zero Hour' Scenario" and it's posted at the Daily Reckoning here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
http://www.gata.org/node/12655
Paul Craig Roberts on gold suppression, the dollar's decline, and 'gangster capitalism'
Submitted by cpowell on Wed, 2013-06-05 18:59. Section: Daily Dispatches
3p ET Wednesday, June 5, 2013
Dear Friend of GATA and Gold:
GoldMoney's Andy Duncan today interviews former U.S. Assistant Treasury Secretary Paul Craig Roberts about the Federal Reserve's suppression of gold prices, the decline of the U.S. dollar as the world reserve currency, and the "gangster capitalism" that has resulted from deregulation of the financial markets and failure to enforce anti-trust law. The interview is 40 minutes long and is posted at GoldMoney's Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
http://harveyorgan.blogspot.com/2013/06/jpmorgans-vault-gold-declinesall.html
Wednesday, June 5, 2013
JPMorgan's vault gold declines/All registered gold at Comex falls/GLD gold remains constant/
Good evening Ladies and Gentlemen:
Gold closed up by $1.30 to $1398.40 (comex closing time). Silver rose by 6 cents to $22.46 (comex closing time)
In the access market at 5:00 pm, gold and silver finished trading at the following prices :
gold: 1404.10
silver: $22.56
I am not going into the trading of gold and silver because you all know that it is manipulated throughout all time zones, so I will not waste your time.
At the Comex, the open interest in silver rose by 739 contracts to 145,734 contracts with silver's fall in price on Tuesday by 32 cents. The silver OI is holding firm at elevated levels . The open interest on the entire gold comex contracts fell by 2909 contracts to 375,970 which is extremely low. There is no question that all of the weak speculators in gold have now departed. Only the strong remain. The number of ounces which is standing for gold in this June delivery month is 936,400 or 29.12 tonnes.The number of silver ounces, standing for delivery is represented by 620,000 oz. No doubt this level will climb as the June month proceeds.
Tonight, the Comex registered or dealer gold lowers to 1.513 million oz or 47.06 tonnes. This is getting dangerously low. The total of all gold at the comex fell slightly and now it is just below the 8 million oz at 7.985 million oz or 248.36 tonnes of gold.
The GLD reported inventory remains constant . The SLV inventory of silver also remained firm with no losses.
We have physical stories today from Addison Wiggin on the fraudulent leasing of gold and silver;Jessie from the Jessie's American cafe on the low registered gold inventory at the Comex with additional inputs from zero hedge with respect to JPMorgan's inventory. Dr Paul Craig Roberts discusses the price manipulation of gold with the GoldMoney.com report.
Finally, Adrian Ash discusses events in India where the government banned all credit related purchases of gold. That is correct, gold can only be purchased with cash. Gold paid no attention as it rose soon after the announcement.
On the paper side of things, we have a report from Dave of Denver/the Golden Truth who is paying attention to the signals that are being emanated out of the junk bond market.
We have great commentaries for you from Bill Holter on the ramifications of the past 6 days of global trading and how we must prepare for the inevitable.
Wolf Richter provides a superb presentation on how China is gobbling up all major assets that it can find.
Pivotfarm gives a good thorough analysis on what is going on in Egypt today.
We will go over these and other stories but first.....................
Let us now head over to the comex and assess trading over there today.
Here are the details:
The total gold comex open interest fell by 2909 contracts from 375,970 down to 373,061 with gold falling by $14.60 yesterday. The front active month of June saw it's OI fall by 225 contracts from 3540 contracts down to 3315. We had 63 contracts served upon our longs yesterday. We thus lost 162 contracts or 16,200 that will not stand this month. The next delivery month is the non active July contract and here the OI fell by 62 contracts up to 537. The next active delivery month for gold is August and here the OI fell by 2725 contracts from 215,940 down to 213,215 . The estimated volume today was poor at 129,971 contracts. The confirmed volume yesterday was also poor at 126,177 contracts. It looks to me like all of the paper gold longs have been washed out!!
The total silver Comex OI completely plays to a different drummer than gold. Its OI rose by 739 contracts to 145,734, with silver's fall in price to the tune of 34 cents yesterday. The front non active June silver contract month shows no gain or loss in OI contracts. We had 0 notices filed yesterday so in essence we neither gained nor lost any silver ounces standing for metal for the June contract month. The estimated volume today was fair, coming in at 39,988 contracts. The confirmed volume yesterday was better at at 42,750.
We had 0 customer deposits today: (very strange for a huge delivery month of June)
total customer deposit: nil oz
We had 2 customer withdrawals today:
1. Out of JPMorgan 21,034.434 oz (and this will partially settle May's 100,000 oz of JPM issuance)
2. Out of HSBC: 32.222 oz ( I guess this kilo bar had a little extra weight on it)
total withdrawal: 21,066.656 oz
If you will recall, we needed to see 100,000 oz of gold removed from JPMorgan's customer account. (1000 contracts served upon our longs in mid May).
Yesterday, we had 15,416.93 oz removed from the JPM's customer account. No doubt that this gold was part of the 1000 contracts issued by JPMorgan customer account and thus we calculated that as of yesterday 28,389.579 oz was settled upon, leaving 71,611.00 still left to arrive in the settling process.
Today we received notice that all 333 notices served upon today were issued by JPMorgan's customer account. We can assume that this will settle upon our longs and this will reduce by 33,300 oz what is left to be settled by JPMorgan on the customer side of things.
Today, we also received notice that we have one adjustment and that too involved JPMorgan:
Out of JPMorgan 8,793 oz was removed from its dealer account and this lands in its customer account.
Thus JPMorgan still needs the following: 71,611.00 - 33,300 - 8793 oz or 29,518 ounces to serve upon our anxious longs from its client or customer accounts.
Thus tonight we have the following closing inventory figures for JPMorgan:
i) dealer account: 412,529.844 oz
ii) customer account 355,222.011.
Now for JPMorgan's dealer side and what the inventory should be:
Last night we reported that 4935 contracts have been issued by JPMorgan's house account since first day notice and not yet subtracted out of inventory
You will also recall on Saturday and Monday night, I reported that JPMorgan had 470,322.102 oz in it's dealer account.
On the dealer side today we had 0 notices issued.
Thus, so far 4935 contracts have been issued so far for 493,500 oz
JPMorgan's dealer vault registers tonight 412,529.844 oz
somehow we have a huge negative balance as i) the gold has not left JPMorgan's dealer account yet to settle
and
ii) it is now deficient by 85,713.16. oz (412,529.844 inventory - 493,500 oz issued = 85,713.16 oz)
JPMorgan has not had any deposits in gold in quite some time.
How will JPMorgan satisfy this shortfall??
HSBC 's dealer vault gold is also slim as it remains at: 260,323.275 oz (8.09 tonnes)
6382 contracts x 100 oz per contract or 638,200 oz served upon + 2982 contracts or 298,200 oz (left to be served upon) = 936,400 oz or 29.12 tonnes of gold.
We lost 162 contracts or 16,200 oz of gold will not stand for the June contract month.
We now have the official USA production of gold last year and it registered 230 tonnes. Thus approximately 19.16 tonnes of gold is produced by all mines in the USA per month. Thus the amount standing for gold this month represents 151.98% of that total production.
i) out of Brinks: 500,014.80 oz
ii) out of CNT: 21,017.71 oz
iii) out of Scotia: 600,120.075 oz
total customer withdrawal 1,121,152.985 oz
Gold closed up by $1.30 to $1398.40 (comex closing time). Silver rose by 6 cents to $22.46 (comex closing time)
In the access market at 5:00 pm, gold and silver finished trading at the following prices :
gold: 1404.10
silver: $22.56
I am not going into the trading of gold and silver because you all know that it is manipulated throughout all time zones, so I will not waste your time.
At the Comex, the open interest in silver rose by 739 contracts to 145,734 contracts with silver's fall in price on Tuesday by 32 cents. The silver OI is holding firm at elevated levels . The open interest on the entire gold comex contracts fell by 2909 contracts to 375,970 which is extremely low. There is no question that all of the weak speculators in gold have now departed. Only the strong remain. The number of ounces which is standing for gold in this June delivery month is 936,400 or 29.12 tonnes.The number of silver ounces, standing for delivery is represented by 620,000 oz. No doubt this level will climb as the June month proceeds.
Tonight, the Comex registered or dealer gold lowers to 1.513 million oz or 47.06 tonnes. This is getting dangerously low. The total of all gold at the comex fell slightly and now it is just below the 8 million oz at 7.985 million oz or 248.36 tonnes of gold.
The GLD reported inventory remains constant . The SLV inventory of silver also remained firm with no losses.
We have physical stories today from Addison Wiggin on the fraudulent leasing of gold and silver;Jessie from the Jessie's American cafe on the low registered gold inventory at the Comex with additional inputs from zero hedge with respect to JPMorgan's inventory. Dr Paul Craig Roberts discusses the price manipulation of gold with the GoldMoney.com report.
Finally, Adrian Ash discusses events in India where the government banned all credit related purchases of gold. That is correct, gold can only be purchased with cash. Gold paid no attention as it rose soon after the announcement.
On the paper side of things, we have a report from Dave of Denver/the Golden Truth who is paying attention to the signals that are being emanated out of the junk bond market.
We have great commentaries for you from Bill Holter on the ramifications of the past 6 days of global trading and how we must prepare for the inevitable.
Wolf Richter provides a superb presentation on how China is gobbling up all major assets that it can find.
Pivotfarm gives a good thorough analysis on what is going on in Egypt today.
We will go over these and other stories but first.....................
Here are the details:
The total gold comex open interest fell by 2909 contracts from 375,970 down to 373,061 with gold falling by $14.60 yesterday. The front active month of June saw it's OI fall by 225 contracts from 3540 contracts down to 3315. We had 63 contracts served upon our longs yesterday. We thus lost 162 contracts or 16,200 that will not stand this month. The next delivery month is the non active July contract and here the OI fell by 62 contracts up to 537. The next active delivery month for gold is August and here the OI fell by 2725 contracts from 215,940 down to 213,215 . The estimated volume today was poor at 129,971 contracts. The confirmed volume yesterday was also poor at 126,177 contracts. It looks to me like all of the paper gold longs have been washed out!!
The total silver Comex OI completely plays to a different drummer than gold. Its OI rose by 739 contracts to 145,734, with silver's fall in price to the tune of 34 cents yesterday. The front non active June silver contract month shows no gain or loss in OI contracts. We had 0 notices filed yesterday so in essence we neither gained nor lost any silver ounces standing for metal for the June contract month. The estimated volume today was fair, coming in at 39,988 contracts. The confirmed volume yesterday was better at at 42,750.
Comex gold/May contract month:
June 5/2013
the June contract month:
the June contract month:
Ounces
| |
Withdrawals from Dealers Inventory in oz
|
nil (0 oz)
|
Withdrawals from Customer Inventory in oz
|
21,034.434 oz (JPMorgan, HSBC)
|
Deposits to the Dealer Inventory in oz
|
nil
|
Deposits to the Customer Inventory, in oz
| nil |
No of oz served (contracts) today
|
333 (33,300 oz)
|
No of oz to be served (notices)
|
2982 (298,200 oz
|
Total monthly oz gold served (contracts) so far this month
|
6382 (638,200 oz)
|
Total accumulative withdrawal of gold from the Dealers inventory this month
|
100.000 oz
|
Total accumulative withdrawal of gold from the Customer inventory this month
| 35,324.352 oz |
We again had good activity at the gold vaults
The dealer had 0 deposits and 0 dealer withdrawal.
We had 0 customer deposits today: (very strange for a huge delivery month of June)
total customer deposit: nil oz
We had 2 customer withdrawals today:
1. Out of JPMorgan 21,034.434 oz (and this will partially settle May's 100,000 oz of JPM issuance)
2. Out of HSBC: 32.222 oz ( I guess this kilo bar had a little extra weight on it)
total withdrawal: 21,066.656 oz
If you will recall, we needed to see 100,000 oz of gold removed from JPMorgan's customer account. (1000 contracts served upon our longs in mid May).
Yesterday, we had 15,416.93 oz removed from the JPM's customer account. No doubt that this gold was part of the 1000 contracts issued by JPMorgan customer account and thus we calculated that as of yesterday 28,389.579 oz was settled upon, leaving 71,611.00 still left to arrive in the settling process.
Today we received notice that all 333 notices served upon today were issued by JPMorgan's customer account. We can assume that this will settle upon our longs and this will reduce by 33,300 oz what is left to be settled by JPMorgan on the customer side of things.
Today, we also received notice that we have one adjustment and that too involved JPMorgan:
Out of JPMorgan 8,793 oz was removed from its dealer account and this lands in its customer account.
Thus JPMorgan still needs the following: 71,611.00 - 33,300 - 8793 oz or 29,518 ounces to serve upon our anxious longs from its client or customer accounts.
Thus tonight we have the following closing inventory figures for JPMorgan:
i) dealer account: 412,529.844 oz
ii) customer account 355,222.011.
Now for JPMorgan's dealer side and what the inventory should be:
Last night we reported that 4935 contracts have been issued by JPMorgan's house account since first day notice and not yet subtracted out of inventory
You will also recall on Saturday and Monday night, I reported that JPMorgan had 470,322.102 oz in it's dealer account.
On the dealer side today we had 0 notices issued.
Thus, so far 4935 contracts have been issued so far for 493,500 oz
JPMorgan's dealer vault registers tonight 412,529.844 oz
somehow we have a huge negative balance as i) the gold has not left JPMorgan's dealer account yet to settle
and
ii) it is now deficient by 85,713.16. oz (412,529.844 inventory - 493,500 oz issued = 85,713.16 oz)
JPMorgan has not had any deposits in gold in quite some time.
How will JPMorgan satisfy this shortfall??
HSBC 's dealer vault gold is also slim as it remains at: 260,323.275 oz (8.09 tonnes)
Tonight the dealer inventory remains tonight at a low of 1.513 million oz (47.06) tonnes of gold. The total of all gold slightly contracts, resting tonight at 7.985 million oz or 248.3 tonnes.
Today we had 333 notices served upon our longs for 33,300 oz of gold. In order to calculate what I believe will stand for delivery in June, I take the OI standing for June (3315) and subtract out today's notices (333) which leaves us with 2982 contracts or 298,200 oz left to be served upon our longs.
Today we had 333 notices served upon our longs for 33,300 oz of gold. In order to calculate what I believe will stand for delivery in June, I take the OI standing for June (3315) and subtract out today's notices (333) which leaves us with 2982 contracts or 298,200 oz left to be served upon our longs.
Thus we have the following gold ounces standing for metal in June:
6382 contracts x 100 oz per contract or 638,200 oz served upon + 2982 contracts or 298,200 oz (left to be served upon) = 936,400 oz or 29.12 tonnes of gold.
We lost 162 contracts or 16,200 oz of gold will not stand for the June contract month.
We now have the official USA production of gold last year and it registered 230 tonnes. Thus approximately 19.16 tonnes of gold is produced by all mines in the USA per month. Thus the amount standing for gold this month represents 151.98% of that total production.
Silver:
June 5.2013: June silver contract month:
| Silver |
Ounces
|
| Withdrawals from Dealers Inventory | nil |
| Withdrawals from Customer Inventory | 1,121,152.985 oz (Brinks, Scotia,CNT) |
| Deposits to the Dealer Inventory | nil |
| Deposits to the Customer Inventory | 832,114.52 (Scotia) |
| No of oz served (contracts) | 0 (nil oz) |
| No of oz to be served (notices) | 102 (510,000 oz) |
| Total monthly oz silver served (contracts) | 22 (110,000 oz) |
| Total accumulative withdrawal of silver from the Dealers inventory this month | 701,301.63 oz |
| Total accumulative withdrawal of silver from the Customer inventory this month | 1,227,181. oz |
Today, we had good activity inside the silver vaults.
we had 0 dealer deposits and 0 dealer withdrawals.
We had 1 customer deposits:
i) Into Scotia: 832,114.52 oz
total customer deposit; 832,114.52 oz
We had 3 customer withdrawals:
We had 1 customer deposits:
i) Into Scotia: 832,114.52 oz
total customer deposit; 832,114.52 oz
We had 3 customer withdrawals:
i) out of Brinks: 500,014.80 oz
ii) out of CNT: 21,017.71 oz
iii) out of Scotia: 600,120.075 oz
total customer withdrawal 1,121,152.985 oz
we had 0 adjustments today
Registered silver at : 42.035 million oz
total of all silver: 164.204 million oz.
The CME reported that we had 0 notices filed for nil oz today. In order to calculate what we believe will stand in the month of June, I take the Oi standing for June (102) and subtract out today's notices (0) which leaves us with 102 notices or 510,000
Thus the total number of silver ounces standing in this non active delivery month of June is as follows:
22 contracts x 5000 oz per contract (served) = 110,000 oz + 102 contracts x 5000 oz or 510,000 oz left to be served upon = 620,000 oz
we neither gained nor lost any silver ounces today at the Comex silver.
Thus the total number of silver ounces standing in this non active delivery month of June is as follows:
22 contracts x 5000 oz per contract (served) = 110,000 oz + 102 contracts x 5000 oz or 510,000 oz left to be served upon = 620,000 oz
we neither gained nor lost any silver ounces today at the Comex silver.
Now let us check on gold inventories at the GLD first: flatline today from Tuesday
June 5.2013:
June 4.2013:
June 5.2013:
Tonnes1,010.45
Ounces32,486,916.77
Value US$45.588 billion.
June 4.2013:
Tonnes1,010.45
Ounces32,486,916.77
Value US$45.443 billion
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