August Gold Delivery Update
Another item of great interest that we follow each month is the ongoing sham/charade/fraud of The Comex metal deliveries. After the extraordinary and unusual happenings in July silver, we've been monitoring August gold all month for similar oddities. See these links for example:
Keeping in mind that "Last Notice Day" is today, August 28, check out the data below and compare the ongoing open interest changes with the daily deliveries:
DATE OPEN INTEREST DELIVERIES TOTAL DELIVERIES
Jul 30 9,215 3 3
Jul 31 (FND) 8,295 256 259
Aug 3 6,894 84 343
Aug 4 6,593 2,828 3,171
Aug 5 3,875 8 3,179
Aug 6 3,838 4 3,183
Aug 7 3,643 18 3,201
Aug 10 3,249 172 3,373
Aug 11 2,910 450 3,823
Aug 12 2,510 1 3,824
Aug 13 2,502 0 3,824
Aug 14 2,123 0 3,824
Aug 17 1,763 1 3,825
Aug 18 1,648 1 3,826
Aug 19 1,525 0 3,826
Aug 20 1,495 0 3,826
Aug 21 1,476 0 3,826
Aug 24 1,451 59 3,885
Aug 25 1,345 0 3,885
Aug 26 1,291 552 4,437
Aug 27 (preliminary) 676 618 5,055
So, of the 9,215 contracts still open when the Aug15 went off the board on July 30...and of the 8,295 contracts still open at the close of First Notice Day on July 31...The Comex has only delivered 5,055. While this is still a greater percentage than usual, what the heck happened to the other 3,000+ contracts that have just evaporated over the course of the month? Did these folks just simply decide that they didn't want the metal for which they had been standing? Did they then just quietly close out their August position by selling it at the market? Were they, perhaps, offered some "financial incentive" to take cash in lieu of delivery? Who knows? And given the deliberately opaque nature of the Comex delivery process, we'll never know.
And here's something else we've been following. On August 4, when a massive 2,828 deliveries were made, recall that 2,750 of those came out of the JPM House account. Since Comex rules limit front and delivery month positions to 3,000 contracts, we wondered how JPM would get around having to deliver more gold if necessary. Well, we have our answer. After delivering 500 contracts Wednesday and another 616 yesterday, the JPM Customer account has now delivered 1,756 contracts this month! So, how do you get around the position limits? Have your offshore, non-proprietary accounts make the deliveries for you.
And here's another item of note. Recall that on that August 4 huge delivery day, the primary stoppers were the House accounts of Goldman and HSBC. HSBC specifically stopped 1,249 of them. For the month, that total for HSBC has reached 1,548. However so far this month, there has been virtually ZERO movements of gold in or out of the HSBC Comex vault. (The House account of Goldman is up to 2,451 contracts stopped but since Goldman doesn't maintain a Comex vault, we have no way of monitoring the firm's movements.)
The report below is the CME Gold Stocks report from August 4. Note that the total HSBC vault is 4,815,090 troy ounces. Also note that the total JPM Vault is 1,197,462 troy ounces:
Now look at the report from Wednesday (in an updated format). Note that HSBC is unchanged at 4,814,672 with virtually no daily changes in the three weeks since. Also note that JPM's vault, at 972,828, is down 225,000 ounces from the beginning of the month but only about half of what they've allegedly "delivered". So where is HSBC's new gold? For that matter, from where did Goldman get their's? For us, all this does is prove yet again that the entire Comex delivery scheme is nothing but a paper shuffle of warehouse receipts. Very little real gold is ever moved. Each "delivery" month is just a shell game where The Banks simply pass ownership claims back and forth.
Anyway, what's the point of all this. Well, first the higher than usual "delivery" demand could be another anecdotal data point for global metal tightness. To that end, while there were only 89 August (non-delivery month) silver contracts left open on First Notice Day, the Comex has now delivered 380 as of yesterday. Isn't that interesting? However, the larger point is this:
The Comex delivery process is a sham and fraud using deliberate deception, hypothecation and accounting tricks. Why does this matter? Because the only thing that gives the Comex paper price any significance is the ongoing charade that physical deliveries are made at those prices. By demonstrating to you the utter sham and fraud of the delivery process, I'm hoping to further convince you of the corruption and fraud of the entire paper derivative pricing system.
This system will, of course, eventually implode under the weight of its accumulated lies. The resulting collapse might possibly be enough to completely denigrate and destroy the exchanges and banks responsible for the ongoing crime. What an interesting time to be alive, indeed.