More GLD Drawdowns

Mon, Oct 20, 2014 - 9:23pm

Longtime readers will recall that we've been covering the ongoing depletion of the GLD since early 2013. After today's massive withdrawal, the total alleged "inventory" of the GLD now stands at a multi-year low of just 751.96 metric tonnes and down 5.8% on the year. This while the paper price of gold is actually up on the year by nearly 4%.

In case you're new to this site and need a refresher, here are just a few of the articles we've posted in the past:

The alleged "inventory" of the GLD began 2013 at 1,349.92 metric tonnes of "gold". Over the course of the year, while paper price declined from $1650 to $1200 or 27%, the "inventory" of the GLD declined to 798.22 mts or about 41%.

So far this year, even though paper price has recovered and, at times, has been up as much as 16%, the plundering of the GLD "inventory" has continued. Just today, the GLD registered a massive withdrawal of 8.97 metric tonnes or about 288,000 troy ounces of "gold". Each pallet you see below holds 192 London Bars for a total of 76,800 ounces making today's GLD withdrawal equivalent to:

As Ruprecht would say, "that's a lot". Especially considering that the paper price has rallied smartly over the past 11 sessions from a Sunday 10/5 low of $1182 to today's Comex close of $1246. That's 5.5% in just eleven trading days but still the GLD "inventory" declines...

For the year, the paper price of gold is now up almost exactly 4%. However, for the year, the "inventory" of the GLD is now down 5.8%. As mentioned above, "inventory" began the year at 798.22 mts and it stands tonight at 751.96 mts. That's a drop of 46.26 mts or almost 1.5MM troy ounces. That's about 19 pallets!

That's more than "a lot" and certainly curious given the performance YTD and just this past week.

What in the world is going on here? Several really smart people contend that there's some sort of arbitrage happening. That for a mere $10/ounce profit (allegedly after storage, transport, insurance and other costs), there are industrious folks out there who cash in shares of the GLD in order to ship it to China. Hmmm. Maybe.

But I would offer an alternate explanation. Notice that the "inventory" keeps falling, regardless of the overall direction of paper price. Could, instead, the "inventory" of the GLD be being raided as a last ditch supply depot to satisfy Chinese demand? Just today, our pal Koos Jansen reported that total Chinese wholesale demand YTD is nearing 1,500 metric tonnes and this doesn't even include PBOC demand. ( Only about 1/3 of the total Chinese demand is satisfied by domestic mining and recycling so the other 1,000 metric tonnes YTD has to come from somewhere...

We'll continue to watch these "inventory" changes to the GLD and we'll be sure to keep you updated with further developments. In the meantime, always remember the words of Bloomberg Industries' Ken Hoffman:

"The London gold is gone...all 26MM ounces of it. It used to be that you could walk through the vaults and gold was stacked to the rafters. But now that gold is gone and The Big Story for 2014 is that should western investment demand for gold return, from where will that gold come?"

Indeed, Ken. Indeed. From where will it come?...


About the Author

turd [at] tfmetalsreport [dot] com ()


nzallblack · Oct 20, 2014 - 9:28pm

hot stuff


winemaker · Oct 20, 2014 - 9:32pm

Second Amendment?

Second Amendment?

Spartacus Rex · Oct 20, 2014 - 9:35pm

First 2 Hat Tip da Turd In Chief

Draw Downs? I have a big appetite

Edit: Oh & THURD!

Spartacus Rex · Oct 20, 2014 - 9:53pm
Spartacus Rex · Oct 20, 2014 - 10:03pm


Voting with their feet? Crowds WALK OUT during Obama's speech on the campaign trail in Maryland 

Dr. P. Metals Spartacus Rex · Oct 20, 2014 - 10:17pm

Yeah, still relevant

unless you had another point to make.

Spartacus Rex · Oct 20, 2014 - 10:18pm

File Under U Simply Can't MTSU!

Even when the TBTJ Sharks get caught & fined, they STILL manage to make sure that it is the little guys who have to PAY the Penalty. WTF?angry

Gretchen Morgenson Warns on Pensions and Private Equity (Guest Post) 


"PE (Private Equity) firm Carlyle recently agreed to pay $115 million to settle charges that it had engaged in illegal activities. Shockingly, neither Carlyle nor the firm’s executives and shareholders will pay a penny of this amount. Instead, it’s the pension funds and other limited partners in this PE fund that are on the hook for paying the fine. As Morgenson points out:

Instead, investors in Carlyle Partners IV, a $7.8 billion buyout fund started in 2004, will bear the settlement costs that are not covered by insurance. Those investors include retired state and city employees in California, Illinois, Louisiana, Ohio, Texas and 10 other states. Five New York City and state pensions are among them.

The retirees — and people who are currently working but have accrued benefits in those pension funds — probably don’t know that they are responsible for these costs. It would be very hard for them to find out: Their legal obligations are detailed in private equity documents that are confidential and off limits to pensioners and others interested in seeing them.

Continued @ link above

Spartacus Rex · Oct 20, 2014 - 10:25pm

Greg Hunter Interviews Paul Craig Roberts

Paul Craig Roberts-Fed Afraid Rising Gold will Sink Dollar
Search · Oct 20, 2014 - 10:27pm

Harvey Organ

Any word on how Harvey's predicament is going?

Search · Oct 20, 2014 - 10:29pm

Russian Gold Reserves

Anyone seen this number out? Normally on the 20th, yet I still cannot find. Help please?

Spartacus Rex · Oct 20, 2014 - 10:33pm
So It Goes · Oct 20, 2014 - 10:34pm

@ Spartacus - 2014 Platinum Eagle 1 oz.

Interesting US Mint day - at Noon (EST) - the 2014 Platinum Eagle opened for biz at $1600. However, the US Mint website would not accept my order. I could not check the accept terms box and the order was not completed. I tried several times at work. When I got home at 6P (EST) I tried again from my own computer. My basket automatically upgraded the price to $1650!!!!! Now the order could be completed.

Very odd. Did anyone actually get to purchase this coin at $1600?

Search Spartacus Rex · Oct 20, 2014 - 10:42pm

Russian Additions - 40 Tonnes

1.2mm ounces is 40 tonnes, that is a massive figure. We need kazakstan as confirmation as they added 24 Tonnes last month. But with "Russian" buying and Chinese SGE withdrawals at 68 Tonnes last week, we may indeed be in the next phase of accelerated accumulation.

This needs to be published more.

Spartacus Rex · Oct 20, 2014 - 11:02pm

@ So It Goes - Platinum Proof Eagles

Phone Order went through very first thing this morning @ 1650 Fiat each

The 1600 Price on their website was merely a typo, and thus no one actually got/ or will get that price.

The Mint uses the previous week's "average" price Fix which was clearly above 1250

It is still a gift horse @ these prices, so cheer up!

Cheers, S. Rex

Hammer · Oct 20, 2014 - 11:06pm

Just opining but maybe the UK

Just opining but maybe the UK CHAPS system went down yesterday as part of the upcoming stress test results for banks due at the end of the week ? No evidence but woudn't be the weirdest thing in the world now would it as part of the stress test ?

Spartacus Rex · Oct 20, 2014 - 11:12pm

@ Hammer

Ergo, 'Cheerio CHAPS' (or is it 'Chumps'? I forgetlaugh)

Cheers, S. Rex

Hammer · Oct 20, 2014 - 11:18pm

lol....CHAPs Clearing House

lol....CHAPs Clearing House Automated Payment System - it is what banks move money around with in larger amounts (i.e. for people buying a house etc - average amount for a transaction is about 2.1 million)

But you knew that smiley

What would CHUMPS stand for ? :)

Spartacus Rex · Oct 20, 2014 - 11:23pm

@ Hammer - C.H.U.M.P.S.

Criminals Hate Us Mere Peon Sheople laugh

Cheers, S. Rex

DayStar · Oct 20, 2014 - 11:28pm

Harvey's Up:

Harvey's Up:

  • Mark O'Byrne (GoldCore): The European status quo and EU elites are becoming increasingly concerned by popular calls in Italy for Italy to leave the European Monetary Union and the euro "as soon as possible" and return to the lira. Beppe Grillo, the leader of Italy's Five Star Movement has shocked EU elites by launching of a non-binding consultative referendum on the matter which will be put before the parliament. "We will collect half a million signatures in six months – a million signatures – and we will take our case to parliament, and this time thanks to our 150 legislators, they will have to talk to us” the Telegraph reports Grillo, the popular comedian and increasing popular politician as having said. Italy's Five Star Movement has thrown down the gauntlet and believes that a return to the lira may be the only way to end the economic depression and indeed save Italian sovereignty and indeed democracy. The movement, for whom 25% of Italians voted in last year's general election, and a further 21% in this years European elections, appear to be upping the ante following the failure of the the EU bureaucracy and the ECB to acknowledge demands, last May, for the creation of Eurobonds to support the Euro and the abolition of the EU fiscal compact. Both measures are staunchly opposed in Germany. They see the creation of Eurobonds as a means to make Germany responsible for the borrowing of struggling peripheral nations. 
  • The Aden Forecast: The U.S. dollar index has been softening. It's now below its five-week moving average for the first time since the rise began in July. If it now stays below 85.50, a downward correction will be in place and the foreign currencies will likely continue to head higher. If you still have other currencies, that'll provide a good opportunity to sell. In other words, the U.S. dollar remains poised to rise further once this downward correction ends, probably in the weeks ahead. So keep your cash in U.S. dollars. Gold bounced up this week to a five week high, also rising clearly above its five week moving average for the first time since the July-August highs. If gold now stays above $1215 it'll be the first step of a bottoming process, which is a good sign for gold overall. Silver and gold shares are stabilizing above the lows, which is also good. But they have the pressure of the sluggish global economy and the falling stock market to deal with. Silver will begin to look better above $17.60, just as XAU will look better above 82. 
  • Bill Holter (Miles Franklin): There are all sorts of questions about Ebola to which we really don't have the answers to but suffice it to say, an Ebola pandemic (real or just perceived) would be enough to shut this country (and the financial world) down. It could be used as a scapegoat for crashing markets, financial closures, martial law and mass quarantining of population segments. If it is real, what a tragedy. If it is not, yet is used for "cover" and a "reason" for societal and financial collapse, what a travesty. As for Ebola arising just now, I say the "timing is curious" to say the least... especially since there are reports this is a manmade virus. The stock market wants more QE, but there simply are not enough Treasuries outstanding for them to purchase. The Fed purchasing Treasuries in effect actually lowers the amount of credit outstanding which "de"flates rather than "re"flates. The Fed has leveraged itself 80 to 1. Instead of being a white knight, they need one. The Fed has no margin for error now, a bigger balance sheet and higher leverage will only make the collapse when it comes that much more horrific. We also got news at the end of the week, India imported 100 tons of gold for the month of September ...this was about half of all gold mined for the month. There was also a report from Shanghai, they imported over 68 tons for the WEEK! If China were to import at this run rate, they would import 3,500 tons over the course of a year. This is an impossibility over the long run as the rest of the world only produces 2,200 tons. I bring this up because again, we have more evidence of demand completely dwarfing supply while price remains weak. 
  • Andrew Hoffman (Miles Franklin): Worldwide supplies of silver are so tortuously thin, the odds of a physical short squeeze have never been higher - particularly given the terrifying political, economic and financial environment. On essentially any metric, qualitative or quantitative, the world is in far worse economic shape than the 2008 bottom - with, until this month,one "temporary" exception; i.e., the ability of various "PPT operatives" to support equities with unfettered money printing and market manipulation. Given this month's horrific market declines - of not only stocks but bond yields, commodities, and currencies - we are clearly entering an extreme "danger zone," in which the "big one" could break out in full catastrophic form, any day. Europe is an unmitigated disaster - with the PIIGS crisis back in full bloom; the Bank of Japan has been forced to admit relentless Nikkei stock purchases, as Abenomics has been proven to be an unmitigated failure; China's historic construction bubble has been exposed by collapsing commodity prices; and America's economic data is plummeting despite TPTB's best "tape painting" efforts, ahead of next month's midterm elections. And of course, even the vaunted PPT is having difficulty supporting markets that appear to have not only made an "Ali Baba top," but desperately want to plunge to the realm of "valuation reality" at far, far lower levels.
  • Steve St. Angelo (SRSRocco Report): we can see a very interesting trend taking place in global copper inventories. Not only are we are near record lows, we are down to less than five days worth of copper inventories: In August 2013, the world held 777,697 metric tons (mt) of total global copper inventories–a 13.5 day supply. During that time, the price of copper was trading in the $3.30-$3.40 range. By March 2014, the global copper stocks declined to 477,014 mt (8.3 day supply), while the price of copper traded in the $3.00 range. So, after a near 40% decline in world copper inventories, the price of copper fell 10%. Interestingly, this is the same the price of silver fell from $25 (Aug 2013) to $20 in March 2014. Now, if we look at the current data, total global copper inventories are now at 263,027 mt at an impressive 4.6 day supply (sarcasm). And of course, the price of copper fell from a high of nearly $3.30 in June, to around 3 bucks today. From Jan-May 2014, global copper production increased 5.6% y-o-y, from 7.28 million metric tons in 2013, to 7.7 million metric tons in 2014. So, we have an INCREASE IN COPPER PRODUCTION. From Jan-Apr 2014, the world consumed 2.3% less copper, from 5.4 million metric tons in 2013, to 5.3 million metric tons in 2014… a DECREASE IN COPPER CONSUMPTION. This isn’t much of a decline, but you would think for the first four months of the year, we would have seen a build in global copper inventories… due to an increase in production and a decline in consumption. However, if we look at the chart above, global copper inventories actually DECLINED IN A BIG WAY in April, 2014. Why would global copper inventories be falling if global production is increasing, demand falling and China with a supposed GLUT of copper inventories to work through? 
  • James E Miller (Mises Canada): The Austrian theory of the business cycle has never been a radical premise. It only stipulates that any workaround of the natural cycle of economic growth must come with ensuing costs. It's a simple law: you can't get something for nothing. A majority of economists believe the opposite. In other words, they believe in magic.


Spartacus Rex · Oct 20, 2014 - 11:31pm

@ So It Goes

You learn quick, grasshopper. yessmiley

Cheers, S. Rex

So It Goes · Oct 20, 2014 - 11:33pm

@ Spartacus

I am cheery - thanks.

BTW - I just noticed PCGS is listing the 2014 Platinum Eagle proof on the first day of issue!

Proof 69 - $1841; Proof 70 - $2500. So the buy in of $1690 ($1650 + $40 for PCGS cert) is a clear winner. (+ 8 - 47% - I feel like a banker printing fiat!)


Bugzy · Oct 20, 2014 - 11:34pm

Very Very strange Gold price action

It appears to be trading freely - rising as expected.

Spartacus Rex · Oct 20, 2014 - 11:35pm

@ Search Russian Addition "Massive"?

It was only the largest monthly purchase in 15 Years! laugh

Now add China's & India's accumulations to realize how soon Western Banks and the Sheople w/ fiat will be toast!

Cheers, S. Rex

Dr. P. Metals · Oct 20, 2014 - 11:48pm


+1 funny stuff 

We are by now I'm sure Pavlovian conditioned to down trending charts

Bugzy · Oct 21, 2014 - 12:01am

Indeed Dr P

I am now officially outside my conditioned response comfort zone. I feel both frightened and elated at the same time. Yet, waiting for that high voltage shock.

Those controllers have really done a job with the brain washing.

Karankawa · Oct 21, 2014 - 12:10am

Dr. P. Metals

"We are by now I'm sure Pavlovian conditioned to down trending charts" ...

The Aden sisters sure are, but are starting to hedge their bets according to DayStars post.

If the recent bottem is indeed the bottem, I'll forever label it on my charts as Yamada's bottem, only to be compared to Brown's bottem. But of course Brown actually had gold to sell.

And it's gone ... @ below $300.

Karankawa · Oct 21, 2014 - 12:19am

I'm buying BEANS!

Actually, I'm canning a form of green beans I grew using a pickling method I learned from this gal.

How To Can Dilly Beans

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