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A Bear Market in GoLD

Everyone's favorite faux depository reaches a dubious milestone.

As you know, we've been keeping track of the depletion of the GLD. Today, let's use CNBS' favorite metric, the 20% decline, to characterize the "inventory".

On 1/2/13, the GLD showed an alleged "inventory" of 1,349.92 metric tonnes of gold. As of this evening, the GLD "inventory" is listed as 1,078.54 metric tonnes following another drawdown today, this time for 2.10 tonnes.

So, year-to-date, the GLD "inventory" is now down 20.1%...thus the title of this post. What does this mean? How much gold is this? At what rate is gold exiting the GLD? Here are some random bullet points:

  • Down over 20% means that for every 5 bars that the GLD allegedly held 4 months ago, it now holds only four.
  • GLD has shed 271.38 metric tonnes YTD, that's about as much as the entire holdings of Austria and more than the combined holdings of Brazil, Denmark, Australia and Indonesia. http://en.wikipedia.org/wiki/Gold_reserve
  • Using the same source as above, even after this 20% decline YTD, the GLD still holds as much gold as the country of Switzerland. Rrrrright....uh-huh....
  • It took over two months for the GLD lose it's first 100 tonnes for 2013. The "inventory" fell to 1,243.05 on March 7.
  • It then took just six weeks to lose the next 100 tonnes, reaching 1,145.92 on April 16.
  • Three weeks ago tonight, just days before the massive, two-day beatdown of paper price, the "inventory" stood at 1,200.37. Again, this evening, it stands at 1,078.54. That's nearly 122 metric tonnes (over 10% or roughly the size of the total holdings of Mexico) in just the past three weeks alone.
  • In contrast, the SLV has seen its "inventory" rise YTD. It began 2013 at 10,084.96 metric tonnes. As of this evening, it allegedly holds 10,407.44. Up 3% since the first of the year. Now Bob Pissonme would have you believe that the drop in GLD "inventory" is related to simple investor liquidation and re-allocation. If that's the case, how do explain this change in the SLV? <crickets>

So, let's have some fun and attempt to put all of this into context. Again, the GLD has now shed 271.38 metric tonnes in just the first four months of 2013.  This is:

  • 8,725,069 troy ounces OR
  • 21,813 London "good delivery" bars OR
  • If you stack those bars onto pallets holding 192 bars a piece, it looks like this:

Yes, that's 114 pallets of gold, each holding 192 bars, each bar weighing 400 troy ounces. Gone. But, to where? Back to Authorized Participant vaults for safekeeping until "investors" begin to accumulate shares of GLD again? That's what Bob Pissonme would have you believe but is that really the case? Perhaps something else is going on, instead? We shall see, now won't we...

It certainly is an interesting time to be alive.

TF

326 Comments

PuraVida's picture

Miss Lube Rack

For the win?

Holy crap. Two firsts in a week? Something very strange is about to happen.

FEED THE TURD!!!!

PeterLemonJello's picture

Just keep buying relentlessly

Don't stop...just keep stacking.

TheGreatKD's picture

Babe Ruth

############ ??????????????/

twippers's picture

Go Canucks Go

Beat the sharks and buy more silver with the winnings

CLE807's picture

Collapse

Collapse doesn't happen gradually, every dumbass in the world wakes up one morning and says what the hell happened.

hawkeye's picture

Just one bar.............

so much gold, so little time.........tomorrow is May Day........get some silver........bury the cartel........cool

The Watchman's picture

Price Disconnect

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American Eagle realizes $86,654 in auction

Print
Record-setting PCGS Proof 70 Deep Cameo 1995-W silver American Eagle

A collector paid a record $86,654.70 to acquire this PCGS Proof 70 Deep Cameo 1995-W American Eagle silver dollar in an online GreatCollections auction March 31. PCGS has assigned the grade to just eight examples.

A collector paid a record-setting $86,654.70 on March 31 to acquire a Professional Coin Grading Service Proof 70 Deep Cameo 1995-W American Eagle silver dollar in an online auction conducted by GreatCollections.

Ian Russell, president and founder of GreatCollections, said April 1 that the unnamed collector who purchased the coin was not seeking to complete a collection of Proof silver American Eagles. The collector had waited years to find a premium example of the key date for the entire Proof American Eagle silver series and was willing to pay what it would take, Russell said.

“This is what happens when you have an extremely popular series,” Russell said. “This collector was determined to win it.”

The winning bidder was one of 21 bidders who placed a combined 104 bids during the auction. The final closing bid was $78,777. The addition of the 10 percent buyer’s fee brought the final purchase price to $86,654.70.

“The 1995-W is the ultimate key to the series with the lowest mintage and is notorious for imperfections, explaining the low percentage graded at the perfect Proof-70 DCAM grade,” Russell said. “In addition to the technical points about the coin itself, the general market for silver Eagles continues to grow at a fast pace ... probably faster than any other coin series at the moment.”

Eight coins have been assigned the grade Proof 70 Deep Cameo by PCGS, with another almost 1,600 coins graded Proof 69 Deep Cameo by PCGS. The Proof 69 Deep Cameo coins regularly sell for between $3,500 and $4,000 each, Russell said.

The previous record for any silver American Eagle, also a Proof 1995-W coin, according to Russell, was $40,000 paid for a PCGS Proof 70 Deep Cameo coin offered in a Teletrade auction that closed March 15, 2010.

Part of a set

The Proof 1995-W American Eagle silver dollar was available only in a five-coin 10th Anniversary set. The set also included Proof 1995-W 1-ounce, half-ounce, quarter-ounce and tenth-ounce gold American Eagles.

The five-coin set was offered at the same price, $999, that was being charged by the Mint for the four-coin gold Proof American Eagle set. Mint marketers promoted the silver dollar as a bonus to collectors who had previously purchased gold Proof American Eagles.

However, some collectors of silver American Eagles voiced complaints about the silver coin from the West Point Mint being made available only in a set that they could not afford. The complaints mostly focused on the point that their collections, inexpensively maintained as complete through 1994, were no longer complete because they could not pay the original or secondary prices for the special coin.

A total of 30,125 of the five-coin sets were recorded sold by the U.S. Mint. In contrast, the Mint sold 438,511 Proof 1995-P American Eagle silver dollars at a price of $23 each.

How many of those 1995 sets remain intact is unknown, as sets have been broken apart over the years, with the gold and silver coins dispersed separately.

At the time of release in 1995, purchasers who acquired a five-coin set solely for the Proof silver American Eagle it contained paid a net cost of roughly $200 for the silver coin. At the time, the gold coins were worth not much more than their melt value of roughly $800.

Although some collectors of silver American Eagles at the time might have been rankled over the net cost of the 1995-W coin being nearly seven times that of the regular Proof 1995-P silver American Eagle, those who paid the price then have reaped the benefits since.

For more information, email Russell at ian@greatcollections.com or contact Russell by telephone at 949-679-4180. ■

Mr. Fix's picture

Answer to where did all of that gold go?

It has been stolen of course, by men that are obviously  above the law, because they own the people that make the laws, they own the people that enforce the laws, and have no respect for people that abide by the laws.

This gold will never be seen again in our lifetimes, the wealth of the entire  western civilization is evaporating at an amazing pace. 

Humanity itself is being impoverished by a handful of parasites at the top of the pile.

They are preparing for systemic collapse, and they do not intend to leave anything for anyone.

Afterwards, only gold and silver will be money, everything else will be worthless.

Fortunately, it would appear that other countries outside of the United States and Europe are preparing to trade outside of the dollar system, and will be using precious metals to back their exchanges.

It's entirely possible that most  of this  gold has been acquired by the   far east, never to return,

I agree, these are interesting times that we live in.

AlexCojones's picture

Took Me Several Minutes to Scroll Past All of These -

Of course I scrolled slooooooooooowly. 

Turd loves these Gold pallet images as much as I love my girl-in-gold-bikini photos.

http://1.bp.blogspot.com/-SqqEcwaO3fg/UP8e68ys4SI/AAAAAAADXy8/KFFLT_661dE/s400/Victoria%2527s%2BSecret%2Bmodel%2BCandice%2BSwanepoel%2Brecreates%2BUrsula%2BAndress%2527s%2Bultimate%2BBond%2Bgirl%2Bbikini%2Bmoment%2B%2B%2B%2B3.jpg

PeterLemonJello's picture

I have to say.....that was

I have to say.....that was damn interesting. I don't normally read all of the posts. Thank you.

DeaconBenjamin's picture

Man caught with unregistered gold at Athens airport

A man traveling with 15.7 kilos of unregistered gold was detected by customs officials at Athens International Airport on April 26. The gold, hidden in Easter candle boxes, was destined to Germany.

According to initial reports, the shipment was being exported by a company operating in the precious metals sector based on the Dodecanese island of Kalymnos, in the southeastern Aegean Sea. Sources said the gold had been purchased from pawn stores and did not carry regular documentation.

A similar case surfaced on April 12 when customs officials at the same airport arrested a 32-year-old German national, an employee of Greek exporting company Elyros SA, after finding him in possession of 470 kilos of silver, 7 kilos of gold and 293,000 euros in cash. Prior to his arrest, the company was being investigated for issuing bogus checks.

ekathimerini.com , Tuesday April 30, 2013 (10:21)

Dagney Taggart's picture

Reflecting on the importance of Mobility.....

While we rack our brains trying to figure out what the best way to preserve our wealth is besides gold, an important theme kept crossing my mind: We must retain mobility for our wealth. Physical gold is the SUPREME mobile asset. It doesn't go away. It requires work to have. It requires work for government and all other thieves to steal. And we know how much they hate that word: work.

Land, especially farmland, is a sitting duck for confiscation through excessive taxation, regulation, or outright theft at some point. Houses are a sitting duck. Bank accounts are a sitting duck. Retirement funds are a sitting duck.

Disclosure: I have only about 20 ounces of gold just to feel like a queen for a day and run away if necessary to return later for the real buried treasure. Honestly, I find gold very boring and ugly. But that's me. We all know where my wealth and loyalty really is and there it will stay until such time as paperworld is ready to grow up and join us here.

DeaconBenjamin's picture

East Texas LCS

ASEs at +12. Shelves still bare except silver dollars over $30. No sovereign silver (e.g, Maples, Kookaburras, Pandas, Libertads).

bigal60's picture

Dow to 12,000 or gold to 1900

Was just looking at Netdania charts the daily of gold and Dow overlaid. Since 2009 or the crash the Dow and gold have been trading along each other fairly close. There are now only two times when it has not. Back when gold was at 1900 and it crashed to meet back with the Dow and now that the Dow is at 14800 and gold is at 1475.

Just a thought not saying it has to go up or Dow has to come down.

Gramp's picture

New England LCS

ASEs @ +8 $ over spot, as well as Maples .

Morgans $31 ea.

Peace Dollars $29.95

AlexCojones's picture

Wrote This When I Was Somewhat of A Savant 7+ Years Ago.

At the time I didn't think Gold would go to $1,000 - $2,000. Nor did I suspect the "Next" terrorist attack would happen at an International, Historical, Widely Televised American sporting event (like the book/ movie, Black Sunday), but in retrospect, it does make a lot of sense with a City like Boston, on the anniversary of The American Revolution.

The EE is clever, powerful, cruel - and YET, and Yet GOLD seems to be getting the better (worse) of their collective greed, IMHO.

Dead Pool refers to that Clint Eastwood movie.  My prediction (See link) took  7-8 years to occur.

Dead Pool - Pick The Next City Attacked -

    "Maybe Philly this time? Or Boston or Los Angeles?. . . . However, I'd put Washington DC, Los Angeles, Philadelphia and Boston at the top of my list. . .  . If FEMA visits your area, intent on some "training exercise" against terrorism, watch out. And don't expect any sort of investigation after the destruction. . . . Boston-- This largely Democratic city might make a fine target for the next terrorist "attack.". . .  Therefore, any large, predominately Democratic city should consider themselves forewarned. . . ."

The NEXT "attack" after this one will only be bigger. That is the Modus Operandi of the EE. Perhaps the next attack will distract us from the MISSING GOLD. . . . as they declare Martial Law Nationwide.

AC not PC

Black Sunday (1977 film) - Wikipedia, the free encyclopedia

Silver Alert's picture

re: Price Disconnect

"American Eagle realizes $86,654 in auction"

I'm just waiting for when that is the price for a regular Eagle.cheeky

bronsuchecki's picture

@TF

1. I don't understand why you use "alleged inventory". Consider the whole debate I had with Andrew Maguire on this blog around ETFs. Andrew's theories about how ETFs were being used rests on the assumption that the ETFs do have the physical they claim, otherwise Andrew's theories don't make sense. You seemed to support Andrew then, are you now saying he was wrong and the ETFs don't have the metal?

2. If the ETFs don't have the metal and it is all paper, then why are you talking about it because it means the bullion banks can't get any physical out of the ETFs to supply into the physical market to push the price down. ETF stock drawdowns are only newsworthy if the ETFs have the metal, otherwise they are not impacting the real physical gold price.

tmosley's picture

Dead Pool? Deadpool!

Dead Pool?

Deadpool!

ReachWest's picture

GLD Metal Inventory

Re: Bron's point: I personally don't think there's a whole lot of doubt that the GLD has real metal.

IMHO, the important question, is why has the GLD shed 20% of the metal that they claimed to have at the beginning of the year? And, as TF asks, where is that metal going? Why the reduction in GLD while SLV does not seem to reflect similar inventory changes? Important questions.

Someone on this blog (sorry can't recall who) made a comment the other day where they likened the GLD to a 'Coat Check'. The coat check attendant hands out chits for the coats to anyone donating a buck or two to the tip jar on the counter, but only the original owner(s) can physically retrieve the coats. The rest of us poor schmucks get to keep our chits and if we're lucky ... get to stare across the counter at all the coats in the coat check area.

Anyway ...  my question ... how do we know if the other 80% of the GLD metal inventory is encumbered? I guess we will never know that and ultimately the ownership lies with the "current holder" at any given point in time. (If you don't hold it - you don't own it - and perhaps that's why 20% has been removed).  Trust - it's all about trust (or lack thereof) now.

Fred Hayek's picture

@bronsuchecki, why assume a binary field of options?

You seem to present a false dichotomy, the ETF's have either everything they say or nothing.  Why?  This is silly.  There are as many intermediate possibilities as there are putative holdings.  Only if you pretend that one must accept a false dichotomy of possibilities, all or nothing, does Andrew Maguire's thesis make no sense.

The Vet's picture

The APs for GLD are not a charity......

They buy GLD stock, redeem it for real gold metal and then sell that metal FOR A PROFIT!

The only thing certain is that the spot price of real metal being redeemed and sold by the APs is HIGHER than the equivalent GLD shares. 

GLD stock is priced on the paper gold price and the premium or discount is measured against the London fix, the LBMA paper market price.  As most of the computerised traders use the paper price (London or COMEX) to base their buy and sell orders, they are trading against that paper price WHICH IS LOWER THAN THE REAL METAL PRICE.

In other words this constant outflow of GLD metal is a direct result of a disconnect between the paper price and the actual metal price and the APs are arbitraging it for a profit.  Usually such arbitrage quickly vanishes as the "risk free profit" is absorbed, but obviously the demand and price for REAL GOLD must be continuously higher than the paper price so this game will go on until the mechanical traders in GLD realize that the game has changed.

Where it goes or who buys it does not worry the APs.  It probably does end up in China or India, but they will continue redeeming GLD metal for as long as there is a profit in it for them. 

In effect GLD stock can be bought by APs for the paper price and sold at the market price of real gold.  There has been sufficient profit in this trade to maintain the outflow of gold from GLD for months and it will continue while the traders of GLD stock base their trading on the artifically depressed spot gold price signals set by the paper markets.

Accordingly, as SLV metal is not leaving the vault in the same way we can be assured that the wholesale silver price is not trading at a sufficient premium to the SLV stock price equivalent to make this trade profitable for the SLV APs.

AlexCojones's picture

Brilliant Posts regarding GOLD in a ZH Column about Ben B.

Dewey Cheatum Howe @ ZH wrote:

    "There has been speculation for a long time, that the FED doesn’t actually have much gold, that it has either sold it off, lent it out, or used it as collateral for borrowings. Either case, there are many claims that the gold that is being stored on behalf of many nations, doesn’t actually exist.

    "And nobody, other than FED staff, have actually been permitted inside the vaults to see or inventory any of the gold. There is no evidence that the gold actually exists, other than the word of the FED......

     "There was another incident last year when Goldman Sachs were proven to have been selling gold certificates to the public, ostensibly backed by real gold in their vaults, but the story leaked out that they in fact held no gold at all, and were doing “fractional reserve” gold banking, on the basis that few people would want to claim their gold at any one time.

    "Even worse, Goldman were charging customers storage fees for the gold that didn’t exist. (WTF?) Also, do you recall the information I circulated around the middle of last year, documenting the immense gold theft the FED pulled on much of the world during WW II?

cynicalskeptic replied:

     "A far larger amount was the treasure looted by the Japanese from China, Korea and all other conquered nations.  Yamashita's treasure was hidden in the Philippines and allegedly recovered by Marcos and the US after WWII - but that recovery was kept secret (after all Mainland China was Communist, Korea was divided.... why let such a treasure go to waste by returning it to its owners?)

     "If the US has blown through this captured treasure AND the Fed and Ft. Knox, this begs the question;  What was it spent on?  Not all went to CIA black Ops or was stolen (though a far amount likely was).  Has the US been paying the Saudis under the table in gold for oil to perpetuate the petrodollar?  As with Spain in the 15th and 16th century, was as much of the US's success post WWII due to stolen treasure as it was due to our 'industrial might'?

http://www.yamashitatreasures.com/IMG_38.jpg

Wonder WHERE This Stuff is Now?

Mickey's picture

Swimming pools

How many swimming pools would the GLD etf  physical gold, alleged physical, fill?

take into consideration that all the gold produced over time fits into 2pools.

Mr. Fix's picture

@ ReachWest

"Anyway ...  my question ... how do we know if the other 80% of the GLD metal inventory is encumbered? "

I think that it is all encumbered. They have been selling paper at a rate of 100 ounces of paper, for every single ounce of physical.

The way I understand that, there will be 100 people standing for delivery for every ounce deliverable.

It wouldn't take a very big run  to cause a default.

Besides, I tend to disagree with your assertion that all the gold is really there,

for all we know, it could be just like Fort Knox, with armed guards standing at the door protecting the secret

that the vaults are empty.

They may just be winding down the numbers using a cover story so that when the   lights are finally turned on,

nobody will be actually be expecting to find gold there.

Either way,

it's disappearing everywhere, on every corner of the globe.

This trend is not going to stop, until it is all gone.

I contend that far more of it is already gone than anybody realizes.

bronsuchecki's picture

@Fred Hayek

I get the distinct impression from Andrew Maguire's work that he believes the ETFs have the metal, which is why I presented it as binary. Anyway, I don't see a partial coverage theory as making much sense. I mean, if you can get away with 80% cover when the auditors come around (the same auditor who does GoldMoney), then why hold 80%, why not 70% or 60% etc? And once you have whatever fractional amount in the vault, then would each additional ETF share sold or bought not require any physical, in which case my point is valid that those sales or purchases don't have any impact on physical price.

The Vet's picture

if the other 80% of the GLD metal inventory is encumbered?

I contend that it doesn't really matter.  The first "owner" who demands delivery will probably get whatever gold is available and the others will get cash settlements initially and later IOUs or just leave empty handed.

There was never any real incentive for the GLD trustees to cheat the system, but the custodian and the APs are a quite different matter.  Right now the remaining GLD metal is probably the most easily accessible source of quick delivery gold available in quantity.  All they have to do is manage the paper price in London and COMEX (the APs are also the banks that set those prices) while they raid the GLD real metal stash. 

We know simply because of the short interest in GLD stock that there are a large number of unbacked GLD shares on the stock market that can never be redeemed for metal, but when that becomes obvious to the holders of that unbacked stock, the APs will have already raided the GLD vaults leaving a bevy of lawyers to fight over the crumbs....

Chris P. Bacon's picture

This just hit from Texas Precious Metals - FYI/FWIW

Update, 5/1/13:

Dear TexMetals Customers:

I want to provide you with a brief update on TexMetals inventory, and answer some common questions from clients over the past week or so. To begin, we have received (and will continue to receive) silver shipments this week. We have newly added to the website:

1 oz Golden State Mint Silver Bars
10 oz NTR Silver Bars
100 oz RCM Silver Bars
Texas Silver Round Monster Boxes
Canadian Silver Maple Monster Boxes

On Friday morning (May 3rd), we will release 15,000 silver american eagles at 8am CST. In a previous email, I commented that we would release silver eagles every week on Tuesday morning, but last week we offered two releases - one on Tuesday and one on Friday - because we were able to pull in stock early. Moving forward, it is likely that Friday will become the norm for the weekly release of eagles.

To answer a few questions:

Why are you not selling quantities less than 500 ozs of silver?

This is not entirely true. We are selling less than 500 ozs on certain products, namely: 1 oz GSM bars, 10 oz Kookaburra, and Kilo Koala. We anticipate offering 10 oz NTR bars and Texas Silver Rounds in smaller denominations early next week.

In general, during times of extreme shortages, any order size restriction we impose is either a function of extreme demand or logistics issues. We use several vaults throughout the US to store our metal. All US Mint and Canadian Mint products originate on the East Coast and are trucked down to Texas. Some of the private mints send product from California and Utah. One of the secrets to keeping a three-day shipping window is to reduce the transit time of inventory, and therefore we sometimes ship to clients directly from our third-party vaults rather than pulling all inventory to our central hub in Texas. However, we limit this process to orders of certain sizes. Orders involving "broken boxes" or smaller units always ship from our vault in Texas given the care required to package and count product. Under present conditions, we are often selling out of inventory faster than we can truck it down to Texas.

Last week, on Tuesday, we offered 15,000 silver eagles on our website, and they sold in 8 minutes. On Friday, we sold another 15,000 in 4 minutes. All orders sold as monster boxes. The demand is so greatly outstripping supply that we do not have the option of offering smaller quantities. It is an unfortunate by-product of current market dynamics, and we are empathetic to our longtime clients who dollar-cost-average in smaller denominations.

When will inventories return to normal?

It is difficult to speculate. As gold and silver begin trading in a narrower range, buying pressure tends to ease a bit. However, the mints are so far behind the demand curve after last month's activity, that we expect at least 6-8 weeks before inventories return to normal. This, of course, assumes no further significant movements in spot price. A strong move downward into the sub-$21 range in silver would perpetuate longer lead times and rising premiums.

When will premiums return to normal?

Premiums are a true barometer of supply and demand in the physical market. When equilibrium is skewed in one direction or another, premiums either reach a minimum baseline above cost (supply exceeds demand) or rise greatly in a type of silent auction (demand exceeds supply). We are experiencing the latter phenomenon now, and premiums will not retreat until supply and demand return to a state of equilibrium.

We appreciate our customers greatly. These messages are intended to keep all of our clients updated on the latest information. If you have questions, please do not hesitate to call or email.

Sincerely,

Jason Kaspar,
CEO, Texas Precious Metals

Animal Sacrifice's picture

NAVs of CEFs

I'll repeat my request since it closed the previous thread:

Long, long ago a member (a saint) created and posted an excel spreadsheet showing the premiums and discounts to NAV of many of the major closed end funds (CEF, PSILV, et. al.)

Now that I'm back in these funds (in my IRAs) having access to it would be a great blessing.

Would anyone reading this help me out by sharing the link? Unfortunately I lost it over all those months holding PPLT.

Thanks lots.

Ibú Ayé fun o mi opolopo owo!

AS

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