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:
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:
- Of the 83,024 eligible ounces that HSBC took in yesterday, 72,162 went right back out the door today.
- 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:
- The Sprott Physical Gold Trust (PHYS) held 1,616,832 ounces in trust on 12/31/12. As of last evening, it holds 1,595,682. This is a drop of just 21,150 ounces or 1.3% year-to-date. See this: http://sprottphysicalbullion.com/sprott-physical-gold-trust/net-asset-value/ and this: http://sprottphysicalbullion.com/media/9700/PHYS-Q4-2012.pdf
- The iShares Silver Trust (SLV) held 10,084.96 metric tonnes of silver on 12/31/12. As of last evening, even with silver price down 28% year-to-date, the SLV shows an "inventory" of 10,391.35 metric tonnes, UP 3% year-to-date.
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??