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Pillaging the GLD

While cobbling together some data for today's podcast, I found some interesting information that I thought I'd share with everyone. Some food for thought over the weekend.

Every day the CME publishes delivery notices and warehouse stocks. It is through these updates that I'm able to track the delivery notices for each delivery month and monitor whether or not JPMorgan is issuing or stopping (taking delivery) contracts. The warehouse stocks are usually updated by mid-afternoon each day and the delivery notices get updated by late evening. If you want to follow along yourself, the page can be found here:

http://www.cmegroup.com/trading/energy/nymex-delivery-notices.html

As you know, I've been tracking the almost-daily pillaging of the GLD this week, this month and this year and doing so has helped me considerably in projecting price, particularly since I noticed the obvious correlations back in July. This has continued to be helpful this month since, as soon as I noticed JPM being the major issuer of October Comex deliveries, I projected that the GLD would soon be hit for about 20-25 metric tonnes of gold and that price weakness through the first half of the month would be an attendant factor.

For those keeping score at home...The GLD is now down 23.76 mts MTD and price, after declining more than $76, looks to have bottomed and reversed into an UPtrend as of Tuesday-Wednesday.

Anyway, that's not the point of this post. Here's what I want you to consider this time:

On Wednesday of this week, even though price rose $9 on the Comex, the GLD was plundered for 3.6 metric tonnes of gold or 115,742 troy ounces.

On Thursday, 2.582 metric tonnes or 83,024 troy ounces of gold magically appeared in HSBC's Comex vault in the eligible, or sometimes considered "unallocated", category. (Recall that HSBC is the custodian for the GLD.) On the CME Gold Stocks report, it looked like this:

Later on Thursday, even though price rose by another $41 on the Comex, the GLD reported that another 3.3 metric tonnes of gold or 106,097 troy ounces had left its "inventory". This dropped the total "inventory" to just 882.23 metric tonnes, now down 467.69 metric tonnes or 34.65% year-to-date.

Your Wed-Thu totals are: Price UP $50. GLD "inventory" down 6.9 mts or about 222,000 ounces.

This afternoon, the latest CME Gold Stocks report shows two important things:

  1. Of the 83,024 eligible ounces that HSBC took in yesterday, 72,162 went right back out the door today.
  2. And JPMorgan showed an increase of an incredible 192,900.000 ounces in their eligible vault.
  • Note first that it's exactly 192,900 ounces. Given the variances of weights and measures, there's a 1 in 1000 chance of showing nothing to the right of the decimal point.
  • Then note that 192,900 troy ounces is almost exactly 6 metric tonnes. The exact number is 5.99986 metric tonnes. Basically they were just 4 troy ounces short of a perfect and exact 6 metric tonnes.
  • Maybe the two bullet points above are simple coincidences. Maybe not. You decide.

Below is today's CME Gold Stocks report:

Your Wed-Thu Comex Vault totals are: An increase of 197,307 ounces, all in the eligible category.

Putting it together, I have no remaining doubts. "Quod Erat Demonstrandum".

The bullion banks are desperate for gold to settle in both London and New York. We see it in the declining Comex stocks and the occasional London Forward Rate backwardation. In order to settle their current obligations and replenish their vaults for future delivery requirements, the bullion banks now regularly orchestrate predictable raids on paper price in order to create the selling conditions which give them cover to raid the "inventory" of the GLD for their own use.

Lastly, as further evidence, I also submit this:

Again, to me it is abundantly clear. The GLD is being consistently and regularly pillaged by the bullion banks as they desperately search for gold to settle their obligations. The question you need to ask yourself is:

As physical gold becomes increasingly scarce right before your eyes, do you have enough??

Probably not.

Prepare accordingly.

TF

167 Comments

Turd Ferguson's picture

One extra note

MODERATOR

Some will claim that it's not possible to equate the GLD with the Comex vaults as the Comex is in New York and the GLD "gold" is allegedly held in HSBC's vaults in London. This is nonsense.

GLD "gold" and Comex eligible "gold" are one and the same. Both are nothing but paper claims to someone else's gold and therefore easily shipped by keystroke, across The Atlantic, from one vault another.

ReachWest's picture

Ha-ha - First (after Turd).

Ha-ha - First (after Turd).

Interesting finding there Turd.. QED on the GLD pilfering. Love the detailed investigative work you undertake to bring us the straight scoop. Looks like somebody is short physical. (I'm not - but of course, I need more.)

... and to think, 99.9% of the general public have none.

Danforth Coxwell's picture

Second...

Yahoo.

Danforth Coxwell's picture

Second...

Yahoo.

Mr. Fix's picture

3rd, (But who's counting anyway?)

I suppose that the thievery will continue until all of the  physical supply has been pillaged.

I am very wary of the numbers however, sometimes there is a correlation to price,

and at some point, there won't be.

Just when you think you've got the game all figured out, they just change the rules.

I am however impressed with your track record, I think you've got the system fairly well figured out,

but even the best laid strategy will come apart at the seams when it is game over.

Funny how you ask if I've got enough physical gold, I was just having a personal debate as to whether to buy gold or silver this month,

I will decide next week, in my keeping with a 50/50 allocation, I think I am actually just a little bit lite on gold right now, the silver prices have just been to  irresistible, especially when I can clean out the entire supply at the local coin shop.

Nice work  Turd, and thank you very much for being here.

bullion only's picture

I think they will never run

I think they will never run out. A secret hoard will be found. Of course you will never see it.

I truly it is one big international banking cartel that includes China and Russia, Europe and the US.

It's not countries hoarding gold. It is central banks and they are not public.

RT

pforth's picture

What about SLV?

Any thoughts there?

Spartacus Rex's picture

After its one month's sabbatical...

I am really curious as to what next week's COT Report will look like

brolgaboy's picture

re: I think they will never run out

after all there is all that gold in Hawaii they've yet to burn through.....

Bugzy's picture

Bullion only

If that was the case, surely they would do that FIRST, so as to keep secret, the pillaging and get folk to dismiss Gold?

Mr. Fix's picture

If you saw this coming, you would steal GLD's gold too!

20131018_worry_0.jpg

daveyboy's picture

i think that this is yet

i think that this is yet another dead end as there have been prominent proponents of silver have stated there are masses of gold which have not been declared.

Bix Weir wrote an extensive article about it

Jim Willie has stated something similar

You have had the female imf insider say similar

Gold by the way, continues to be in a down trend and silver is the only one which is above the high of October 2010, so for 3 years now despite the increased demand for Gold it's slumping.

I say do the math, it would appear that what the 3 above have said are worth assessing.

I am not saying that Gold is only going down from now, but the truth is I really don't know and not many do, but what I will say is the trend is king.

elpicador's picture

I recommend this...

Kuchek's picture

2014 - Helicopter Money is Coming! Jim Rickards, Currency War Up

¤'s picture

☯ Movers and Shakers of China’s Shadow Banking

P2P Companies: The Movers and Shakers of China’s Shadow Banking

October 19, 2013

China

Credit in China is like a leaky spigot–impossible to turn off all the way. When major banks were told to stop or slow lending this spring,shadow banking emerged to fill in the gaps.

P2P has become an emerging piece of the shadow banking puzzle. P2P companies, in this context, are online platforms that serve as credit matchmakers: they evaluate creditworthiness and bring together individual and business borrowers and interested lenders. The borrower signs an agreement with the individual lender, and the P2P firms pocket transaction fees.

P2P lending is good for both parties: borrowers without access to bank loans can get capital, and lenders can receive much higher returns than they would via other avenues. Caixin cites an October 2013 report by National Business Daily and wangdaizhijia.com which found that 87 percent of P2P investors received yields higher than 18 percent.

P2P lending represents a small sliver of shadow banking, though it’s growing rapidly. Credit Suisseestimates the total value of shadow banking is 22.8 trillion yuan (approx. $3.7 trillion), and Caixinestimates that P2P lending comprises 60 billion yuan of that figure.

The first P2P lender in China was PPDai.com and CreditEase has emerged as one of the leaders, with estimated monthly loans of 100 million yuan, as of 2011, according to Caixin.

So who are these borrowers and lenders? The borrowers are individuals or businesses that have found it otherwise impossible to find credit. In many cases, this is because state-owned banks direct much of their funds to state-owned enterprises (SOEs), despite recent pushes to fund small and medium-sized private enterprises. Additionally, after what many saw to be an emerging bubble earlier this year, the central government slammed the brakes on available credit. 

The lenders are looking for better returns than are available nearly anywhere else, due to extremely low savings interest rates, volatile stock markets, and crackdowns on real estate investment. Interestingly enough, many are middle-class Chinese. The National Business Daily and wangdaizhijia.com report found that 60 percent of lenders make less than 100,000 yuan (approximately US$16,000) a year.  

It’s not all smooth sailing, however. Or rather, it’s best not to expect smooth sailing in the future. The China Banking Regulatory Commission issued a risk notice for the sector in August 2011, pointing out a number of structural issues. Many P2P companies guarantee loans, and there is concern that companies could default on these loans. They are allowed to guarantee up to 10 times their capital, but Caixin quoted Xu Jianwen, Renrenmoney.com’s CEO, as saying that “most” P2P companies have “far exceeded that limit.”

There is also concern that the lending creates continued investment in overheated sectors, exacerbating existing economic problems. 

As is wont to happen, the industry has also diversified into other investment products, such as loan packaging (creating wealth management products). As Caixin notes, “many such websites in the country have taken on businesses they are not allowed to operate, such as packaging loans into wealth management products that investors are very willing to snap up, soliciting deposits directly or in disguised form from the public, and providing unrealistic loan guarantees.” There is also the issue of loan maturity mismatches within these wealth management products: short-term funds are invested in long-term projects, meaning the investors earn their returns before the project legitimately does so.

Future regulation of the sector is murky: it is unclear which branch or department is responsible for monitoring these types of websites. Caixin observes: “if the authorities decide to group P2P lending websites under asset securitization institutions, as in the United States… the CSRC would be responsible for regulating them.” It’s worth noting that some companies are taking the initiative to strengthen themselves by working with licensed loan guarantee companies.

Shadow banking and P2P lending platforms are serving an important function in the economy: giving individuals and small businesses access to credit. However, the sectors are also wildly unregulated and failures within these sectors could be detrimental to the economy. Only time will tell whether they have a net positive or negative effect on China’s financial system.

Turd Ferguson's picture

Again and with meaning

MODERATOR

GLD "inventory": DOWN 34.65% YTD

PHYS inventory: DOWN 1.3% YTD

SLV "inventory" UP 3% YTD

Spartacus Rex's picture

@ daveyboy

Paper gold can easily be manipulated to drop in spite of increased physical demand. What part of the scam, or ability to recognize physical Gold's true value, still eludes your comprehension?

pbreed's picture

Big deal...

I think that you missed something really big here....

The ONLY way the gold in sprotts PHYS fund is going to go down is if someone buys a large enough basket of PHYS to ask for redemption.  Anyone holding enough PHYS can ask for redemption, it requires no special standing.

I get the impression that the bullion banks don't like Sprott because he seems to be open and above board... if gold is so tight that the power to be are grovelling over to sprot to buy bullion at a premium that is just HUGE!

Its also interesting that PHYS is currently showing a 1% discount, it normally has a premium to spot... why the

discount? it seems that this should be an easy 1% arbitrage since its fully convertible?  Strange...

(It could just be that some one is arbitraging the low premium)
jackstar's picture

Can you help?

I had a conversation with a close friend the other day about the financial situation in the U.S. and the rest of the world.  Like many here, I believe we're headed for some tough times.  I mentioned the significance of the inability to taper money creation, the size of the operating deficit, the size of unfunded liabilities, etc.  He doesn't dispute the facts, but says he is confused by the following question:  If things are as bad as you say, why aren't the financial experts as concerned as you are?  We don't hear about any of this in the media, he says.  Although he is an educated person, he had never heard the term "taper" in the sense that we're using it vis-a-vis the federal reserve.  He had never heard the term "capital controls".  He didn't know that it was illegal for Americans to own gold from 1933 until 1975.

In answer, I brought up von Havenstein, the president of the Reichsbank through the Weimar inflation period, a financial expert who thought it was OK to print trillion mark notes.  I brought up the concept of normalcy bias.  We wondered whether the CNBS stock shills are secretly buying hard assets while openly touting the stock market.

I would like to pose his question to the resident financial gurus here in Turdville.  How can I explain the fact that the financial experts don't seem to share our concerns about America's deteriorating financial situation?  That they are OK with unlimited QE?  Please help.

Bongo Jim's picture

2 words

Paid off

abguy4's picture

these forever mysterious massive gold hoards --- I call BS~!

As to these forever mysterious massive gold hoards - I don't believe it for one bloody second - not a single one of them. Not the two trillion billion in the Philippines, or the Bazillion in Hawaii. Is there anyone who has ever seen any of these piles? Nope~! I believe all these stories (and I've followed them all) are cleverly planted misinformation. Yup, pure counter espionage devised by the Cartel to throw the dog (us) off the scent. Karen doesn't claim to have seen that pile - she says she just, "heard about it". From who exactly Karen? Some of your prior Cartel insider sociopath buddies who know you have gone rogue, and who now see you as a perfect agent to spread misinformation? And why did this story appear out of the blue from an angel's mouth, just as the EE is concocting their latest smash-down?

Look, every known pile of gold in History has been plundered. Think about that. They now want you to voluntarily give-up your hoard into their eagerly waiting filthy mitts. Do you really think that such massive hoards sit safe secure idle while a world full of thieves circles? You think the hundreds or thousands of laborers, shippers, truckers et al - who would have been required to transport that Philippine gold hoard - just quietly went to their grave,  dirt poor with starving children, while they knew where a Bazillion oz. was sitting, just awaiting a new owner?

Hitler's gold is loooooong gone and so is every other fantasy hoard.

Let's. Get. Real.

Be careful out there troops. Step back and analyze everything you hear. If it doesn't wash - don't wear it.

Mr. Fix's picture

Bingo! Bongo

smiley

abguy4's picture

Can you help - YUP~!!

I have a friend down south who got a phone call from his Financial Advisor, just two months ago. The FA and my friend were buddies in Nam. The FA is actually not a FA but a regional Pres for UBS Paine Webber. He personally handles my friend's account as a favor between ole army buddies. Now here is the gist of the story;

Pres (FA) tells my friend that he has pulled his entire account out of all bonds, stocks, whatever. He has him sitting in CASH. He tells my friend, "You will thank me someday - this ship is headed for the rocks! We need to bail-out NOW"

So.....is UBS moving all their client's accounts to safe havens? Hell NO. Nor is any other investment house, because they would go out of business. Got that?

"Financial experts" are secretly very worried, but they are keeping that quiet amongst themselves.

That's as much insider info as I have to share

csquared13's picture

RE: Again and with meaning

This is what I was looking for earlier. Thanks Turd. Good stuff.

Mr. Fix's picture

A massive hoard of gold:

Let's not forget that Jim Willie has stated that he believes the market is currently being supplied by ancient reserves in the “Roman catacombs” which is definitely his sneaky way of referring to the Vatican.

I do not doubt for a second that there is lots of gold stashed under the Vatican, and for a “good enough reason”wink

I'm sure it can be made available to help the Western elite run their endgame scam.

And by its very nature, I would consider it both massive, and unaccounted for.

zman's picture

Question?

Since the gold price is just slightly off the lows, it's not too surprising that GLD is still puking up gold.

If gold were to trade up to $1500 oz,  wouldn't it be pretty safe to assume that GLD would be gaining investors, thus adding gold to the GLD?

Or are the bankers that hold GLD shares selling so much that it would off set the buyers even if the price moves higher?

My guess is, if gold moves higher than $1500 oz, the puking of GLD would be over, and most likely they would be adding gold.

Spartacus Rex's picture

@ jackstar- Help

Simple. Who pays these so-called "experts"; What are they paid in; And what will their paychecks buy /be actually worth if the Sheople finally snap out of their semantics induced stupor & servitude and stampede out of fiat IOUs into real, honest Money Gold & Silver Coin?

Spartacus Rex's picture

@ zman- The Question IS...

Who is really that stupid enough to still continue buying "paper" gold?

Bongo Jim's picture

Mackenna found it

¤'s picture

More Sprott

This was probably been posted 2 weeks ago but I'm not sure. It's interesting nonetheless.

China, Gold And M&A: Sprott Launches New Offshore Fund With Zijin Mining Group 
Sep 30, 2013 12:19 PM | 

saupload_Zijin_Group.jpg

Eric Sprott not only does the talk, but is doing the work as well - the target size of the fund is 500 mil and it shows that China is not only interested in Gold, but in the Gold and Silver mining companies as well. This is the sign where the money will be coming from in the resource sector. China knows when to sell and when it is time to buy.

Zijin Mining Group is the largest Gold and the second largest Copper producer in China and this move shows that smart money are already shopping for the projects to feed their pipeline.

We hope that Rob McEwen is keeping his phone line open and has translated Los Azules Copper presentation in Chinese as well...

McEwen Mining & TNR Gold: CIBC Reiterates "Outperform" Rating for Lumina Copper MUX, TNR.v, LCC.v

Gold, Silver, Copper, Lithium and Market Emotions Cycle GDX, MUX, TNR.v, LIT, ILC.v

(click to enlarge)saupload_Market_Emothions_Cycle_thumb1.p

Find yourself in the picture. It is all about emotions and our ability to control it. We listen to those who has been there and did it already: stay discipline, stay focused."

Eric Sprott: "China Bought 60% of Gold Production Last Month, I Am Buying Gold And Silver Stocks Now." MUX, TNR.v

"Price of Gold and Silver will be the main driving forces for all survived companies. Eric has very bold prediction for Gold going to $2400 by next year: "The most important thing in the precious metals business - the price of precious metals. They all go up if the price of Gold will go up. The question is which one will go up 200% or 500%. If the Gold will go up to $2400, I can bet that the Gold miners index goes up 200%. What we are trying to do: where is the one which will go up 1000%."

Sprott:

SPROTT LAUNCHES NEW OFFSHORE FUND WITH ZIJIN MINING GROUP

TORONTO, Sept. 27, 2013 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott" or the "Company") today announced that it has launched a new offshore global mining fund (the "Fund") with Zijin Mining Group Company Limited ("Zijin"). All relevant regulatory approvals have been received in Canada and the People's Republic of China and the Fund has been initially seeded with US$100 million from Zijin and US$10 million from Sprott.

"We are very pleased to launch this new fund which will allow us to open a new market for our investment products," said Peter Grosskopf, CEO of Sprott. "Zijin is the largest gold producer and the second largest mined copper producer in China and is listed on both theHong Kong and Shanghai stock exchanges. We believe the combination of Zijin's technical strengths and Sprott's resource investment expertise will prove to be an attractive option for investors looking to invest in the mining sector with a focus on gold."

The Fund management company is a joint venture between Sprott and Zijin and will invest primarily in the publically-listed equity and debt instruments of gold, other precious metals and copper mining companies. The Fund will be co-managed by affiliates of Sprott and Zijin. Under the joint venture agreement, Americas Now Resources Investment Management Corp. has agreed to provide technical and marketing services to the Fund.

The target size of the Fund is US$500 million and the Company anticipates receiving additional commitments from onshore Chinese investors beginning in the fourth quarter of 2013.

http://seekingalpha.com/instablog/21153-sufiy/2271522-china-gold-and-m-a-sprott-launches-new-offshore-fund-with-zijin-mining-group-gdx-mux-tnr-v

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