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Dec 17.2013: we lost another 2.08 tonnes of gold ...
Tonnes 816.82 - Ounces 26,261,552.86 - Value US$32,339 Billion
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Jan 2.2014: we lost 3.6 tonnes of gold from the vaults at the GLD ...
Tonnes 794.62 - Ounces 25,547,852.70 - Value US$31,282 Billion
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Weekly COMEX Gold Inventories: Slight Rise In Registered Gold But Claims Still Close To 80 Owners Per Ounce
Dec. 30, 2013 2:12 AM ET
Last week we saw COMEX registered gold inventories drop to their lowest level ever and the claims on each registered ounce rise to a stunning 92 owners-per-registered-ounce, ...
We know that 2013 has been a rough year for gold investors (ourselves included), but in terms of the situation at the COMEX warehouses, the historically low registered gold inventories, historically high claims on each registered ounce, and the large accumulation in the JP Morgan warehouses over the last few weeks are all things that seem bullish for gold.
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After a brief pause in the decline of Comex Gold inventories, it looks like it has continued once again as there were several big withdrawals over the past few days. Not only was there a large removal of gold from the Comex today, the Registered (Dealer) inventories are now at a new record low.
Scotia Mocatta had 63,786 oz of gold withdrawn from its Registered category. This is quite significant as Scotia Mocatta’s total Registered gold inventories fell 41% in one day from 152,409 oz to 88,532 oz.
Furthermore, you will notice that the total Registered gold inventories are now down to record low 416,563 oz. The gold in the Eligible category is held by Customers at the Comex while the Registered inventories are the Dealer stocks.
A day prior to this update, there was 52,539 oz of gold withdrawn from JP Morgan’s Eligible category.
We can see just how much the Registered inventories have fallen since the take-down in the price of gold in April of 2013. The Comex held nearly 3 million oz of gold in its Registered category, but today it has fallen 86% to 416,563 oz.
The figures in this chart from 24hGold.com do not reflect the drop of 63,976 oz from the Comex today. As you can see, the bottom left hand corner of the chart only goes down to 431,530 oz.
According to the 1 month Registered gold inventory chart, there has been a huge draw-down since Dec. 12th. From a peak of 780,000 oz on Dec. 12th, the Registered inventories have declined 363,437 oz (46%).
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Jan 14.2014: we lost 3.56 tonnes of gold from the vaults of GLD ...
Tonnes 789.56 - Ounces 25,385,022.33 - Value US$31 Billion
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I've always been intrigued by the frequency of 0230hrs (0830hrs UK) smackdowns, and unsure as to the reasons why the Chinese did not simply step in and scoop up cheap contracts. Only recently has it dawned on me as to the potential reason, being that the Chinese may well be the perpetrators of the smack downs.
The initial problem I had reconciling this idea was that if the Chinese are buying up all the available gold, whilst they no doubt would have the incentive to cap or lower the price, it would be illogical to achieve this by increasing paper shorts which they then would be liable to deliver at contract expiration. Either way they can use the 100:1 trading vs delivery to maximize the amount of physical they can get their hands on, without collapsing the $'s value.
The clues to the solution IMO lies in last years wording change at the CME (re no guarantee all stated holdings exist), combined with the 100:1 paper vs physical trading, and the convenient get out clause whereby in the event of a non delivery the value may be settled in cash.
The Chinese, as we definitely know, have a substantial surplus of $ fiat, which can only decrease in value (ie purchasing power), as the supply increases or if the $ loses its status. The most logical thing they can do therefore, is to utilize some of this surplus fiat, to cap the prices of PM's, accumulate the physical, and either continue to roll forward their built up paper shorts, or pay off the contract holders on delivery date /default with the paper $ they hold.
So why aren't the western powers doing anything? Because they can't! If they've already lost the gold through leasing (as per the Germans trying to repatriate theirs), through their historic attempts to protect the $ status, and with some western banks still holding naked shorts, the wests hands are tied even though they would probably like/need a higher price! This is also likely to be the reason why JPM, as the top dog with the highest western status, is net long and building their own stack as quickly as supplies will allow.
I might be wrong but it's the most logical reason I can think of that ties it all together.
On January 23, JPM saw 321,500 ounces of gold depart in one day. This was tied for the single biggest daily withdrawal in history!
...on Monday the infamous gold vault located below 1 C(hina)MP saw an identical withdrawal of 321,500 ounces, matching the record withdrawal, and amounting to 28% of all JPM gold in storage. Adding to Friday's drop, this means that a record 47% of JPM's gold has been withdrawn in a few short days:
Someones got em by the short n curlies .........
Give us our gold NOW or we will stand for delivery for all those paper contracts.
Or maybe more like 'Give us our gold now, or bankers will start falling off buildings and hanging themselves...'
http://www.zerohedge.com/news/2014-01-28/man-jumps-his-death-jpmorgan-london-headquarters
http://www.bloomberg.com/news/2014-...er-deutsche-bank-risk-manager-dies-at-58.html
I saw that! Wow......I wonder if the two are connected? I would like to chase the dots between those two guys and see if there is a link.
Russell Investments' Chief Economist (and former Fed economist) Mike Dueker was found dead at the side of a highway in Washington State. Police said the death appeared to be a suicide.
He may have jumped over a 4-foot (1.2-meter) fence before falling down a 40- to 50-foot embankment, Pierce County Detective Ed Troyer said yesterday
Who jumps down an "embankment" to commit suicide?
... Warehouse Inventory amounts to 7,569,585 oz ...
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In just three days, the total Registered silver inventories at the COMEX fell from almost 30 Moz down to 23.1 Moz. Thus, COMEX Registered silver inventories are the lowest they have been in more than 15 years.
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... January is an off-month for deliveries at COMEX. However, the number of gold futures contracts that stood for delivery this month resembles an active delivery month. That is interesting because COMEX has always been primarily a paper based exchange. Physical delivery is the exception rather than the rule. Delivery has always been theoretically possible, but it has been rarely done. In January 2016, for example, the holders of only 172 COMEX futures contracts demanded physical gold. In comparison, by January 27, 2017, the holders of 1,254 COMEX futures contracts held them to maturity and demanded their gold! That is a whopping 729% increase yoy!
We’ll see what happens in February. There are already an unusually large number of February contracts remaining open on Friday, a day before the first notice day. Monday is the first notice day for the February delivery month, which has always been a major one. This month is shaping up to be mildly historic in size. The overall delivery size looks like it will be at least as big as December, 2016, even though December is normally the largest delivery month by far. One thing is clear. As of Monday morning, holders of matured futures contracts are going to have to put up or shut up. They must either deposit sufficient cash to pay for the gold in full, or face involuntary liquidation.
No matter how massive the delivery demand, there is always the possibility that dealers will try to attack prices early in the month. They often do this. I believe that the reason revolves around the desire to buy physical gold bullion, from mining companies and others, at a rock-bottom price. They will do everything they can to create a fake price so long as it doesn’t cost them too much. The trouble for them is that, this month, it may cost them more to do it than they save from the results.
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... As I reported last month, we saw a 729% increase in the demand for delivery of physical gold at COMEX during off-month of January 2017, year over year. This month (February) was a major delivery month, and there was another 230% increase in the delivery of physical gold bars. The huge increase in gross demand for actual physical gold bars is impressive. However, it is not the amount that was purchased but, rather, who was doing the buying that is the most important factor.
The biggest banks in the western world continued to be the biggest physical gold bar buyers during February. In many cases, their own customers are being called upon to deliver the bars to them. In total, about 18.66 metric tons worth of physical gold bars were delivered on COMEX in February. That compares to 7.99 tons delivered in February 2016. The net increase totals out to be 233% year over year, which is enormous.
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Oddly, CME, Inc. was also a significant buyer. It has consistently been a significant gold bar purchaser throughout 2016. Like Goldman Sachs, HSBC, J.P. Morgan, Scotia and others, it has been stocking up. The exchange operator didn’t buy many gold bars as a “too-big-to-fail” megabank, but its purchases were enormous, and way out of line from a historical perspective. Remember, the futures exchange operator is not a bank, a hedge fund or an independent investor. It has no obvious reason to buy physical gold bars — except one which we will discuss in a moment.
CME, Inc. bought about 1/3rd of a metric ton in 2016. This past month, it purchased another 62 kilograms. In comparison, it bought only 5 gold bars in all of 2015. The exchange is contractually liable on any default in delivery by clearing members. There hasn’t been any default yet. However, the fact that the company is now buying so many gold bars implies that it is preparing for that to happen. It seems to be planning on weathering a major supply disruption.
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Avery has posted an update:
http://averybgoodman.com/myblog/201...n-physical-gold-bar-deliveries-all-connected/
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Last week, I showed you how the CFTC’s “Commitments of Traders Report” corroborated the fact that the big bullion banks used the big sudden decline on July 3rd to massively reduce their long-standing legacy short positions. I predicted that the big decline on Friday, July 7th was going to be used to do more of the same. Now, we have the proof that this is exactly what happened.
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The latest Commitment of Traders Report’s statistics were tabulated as of the close of trading July 11, 2017. As of that moment, the bullion banks had closed 2,823 platinum short contracts (141,150 troy ounces of platinum); 9,560 silver short contracts (47,800,000 troy ounces of silver) and 19,392 gold short contracts (1,939,200 troy ounces of gold.
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... The numbers, with respect to all the precious metals, each represent a massive percentage of the total short position held by the banks. What makes it even more noteworthy is the fact that it comes on top of the massive percentage they closed last week!
The bottom line? The most knowledgeable people in the world must believe that precious metals prices are going to be rising fast and hard in the next few months. Otherwise, they wouldn’t be fleeing from short positions they’ve rolled over for years! ...
This email came from one of the global KWN readers (Kevin W.):...COT Gold Swappers are (now) a record long at 43,721 contracts. They increased their net long(s) into 7/11, from 7/3, by 22,000, whereas open interest increased by only 18,000!
Going back to Jan. 2006, Swappers have been net long only 25 weeks out of 600 weeks. Even with the set up in December 2015 for the big 2016 run last year, Swappers only made it to 31,693 contracts net long. Higher prices will make the squid faced Swappers a lot of money.
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Additionally, Comex clearing members can use what is called "London gold" as performance bond collateral. The CME rulebook does not define "London gold." Presumably these are the standard 400-ounce London Bullion Market Association bars stored in a London vault.
But the term "London gold" remains unexplained and nebulous, and recently the CME tripled the amount of "London gold" that can be used by a clearing member as performance bond collateral, increasing it to $750 million from $250 million.
Why has the exchange tripled the amount of "London gold" that can be submitted as performance bond collateral and included Comex gold bar warrants as assets considered acceptable collateral?
As has been well documented, the open interest in Comex gold contracts has just reached a record high. The current open interest, more than 716,000 contracts, is 85 times greater than the "registered" gold stock on the exchange and almost nine times more than the total amount of gold in Comex vaults, including "pledged gold."
As a technical matter "pledged gold" should not be considered part of warehouse stock because it cannot be delivered. The financial risk assumed by the Comex CME clearing members escalates with each new contract of open interest, especially to the extent that the open interest is "uncovered," meaning the Comex lacks enough gold to bear the risk of a delivery default.
For this reason the size of the performance bond posted by each clearing member increases pro-ratably with the rising value of the gold contract open interest. (That is, clearing members that process an increased amount of contracts require higher margin deposits.)
This raises the question of the quality of "London gold" as collateral. The issue with "London gold" is whether the gold is verifiably sitting in a London vault or if the posting bank -- for example, HSBC -- even has legal title to the bar.
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For those who have at times struggled to understand the difference between COMEX inventory categories ‘registered gold’ and ‘eligible gold’, now your head can spin even more, since the CME’s COMEX has just introduced a new category – ‘pledged gold’.
This pledged category was first noticed on the infamous COMEX warehouse
late last week by Nick Laird ..., with the pledged gold column intriguingly populated with an entry next to the New York vault of bullion bank, HSBC. What did this pledged column entry mean, we wondered, and where did it come from?
After some digging on the CME website, the answer was revealed. Pledged is a new gold inventory category representing COMEX gold warrants which have been deposited with CME Clearing as performance bond collateral, in other words margin collateral. ...
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Now this is where it gets interesting as regards the new “Pledged gold” category. Starting on Monday 4 November, the CME began allowing its clearing members to deposit and use COMEX gold warrants as collateral in meeting performance bond requirements for its Base Guaranty Fund Products and Interest Rate Swaps (IRS).
To reflect this change, the CME therefore needed to amend Chapter 7 of its NYMEX/COMEX Rulebook which covers “Delivery Facilities and Procedures” to reflect the acceptance of COMEX gold warrants as collateral. It did so by adding a reference to “pledged” precious metal, while defining “pledged” metal as “registered metal for which the warrant that has been issued is on deposit with CME Clearing for performance bond.”
Furthermore, the amendment also added “the requirement for approved facilities to report pledged metal to the Exchange”, hence the appearance of the new pledged gold category on the COMEX daily warehouse report.
Critically, the amendment also clarified that “clearing members that have deposited gold warrants as performance bond with CME Clearing may not use these warrants to satisfy their delivery obligations.” Simply put, this will therefore mean that any registered gold whose warrants are used as collateral cannot be used to settle gold futures.
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