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 82 to today's Comex close of 46. 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 /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 ()


Oct 20, 2014 - 9:28pm

hot stuff


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!

Dr. P. Metals
Oct 20, 2014 - 9:45pm
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?

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
Oct 20, 2014 - 10:27pm

Harvey Organ

Any word on how Harvey's predicament is going?

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