Avoiding The GLD

7
Thu, Jun 4, 2015 - 11:21am

As the reported "inventory" of the GLD moves into negative totals for 2015, I thought it would be fun to bring some of these numbers into perspective once again.

Back on Tuesday, the GLD reported another outflow of "inventory". The drop was nearly 5 metric tonnes and it brought the total stated "inventory" down to 709.89 metric tonnes. As "inventory" began the year at 710.81 mts and price began the year at $1184, you can see that both price and "inventory" are now down slightly for all of 2015. But that doesn't quite tell the whole story.

Back on January 1, 2013, the price of paper gold was $1650/ounce. That day, the total "inventory" of the GLD stood at 1,349.92 metric tonnes. Again, as of yesterday, price was $1185 and GLD "inventory" stood at 709.89 mts. What's the big deal, right? Price is down and "inventory" is down, too. But let's put this into perspective as simple numbers often need context to be appreciated.

Since 1/1/13, the GLD inventory is now down 640.03 metric tonnes....

​OR

20,578,000 troy ounces

OR

Slightly more than the combined holdings of Austria, Belgium and Mexico.

Stated another way, since there are about 400 troy ounces in every London Good Delivery Bar, over the past 27 months the GLD has shed about 52,000 of these:

And if you pile 192 of them onto a pallet, suitable for forklift movement back and forth across an LBMA vault, you'd fill about 271 pallets. That's a lot.

Of course, we're supposed to believe that this is all genuine, allocated and real gold...keeping in mind that the custodian for all of this "gold" is HSBC. (Yes, the same HSBC that has been charged with all sorts of crimes from tax evasion to market manipulation to money laundering. No doubt, though, that their custodianship of the GLD is on the up-and-up. <sarc>) I'm sure that none of this "gold" has been used to satisfy eastern physical demand. It has all simply been shifted out if the GLD and into other vaults, where it sits now, collecting dust...just a useless relic and antique.

But I digress, please allow me to give you some additional perspective...

After the ruthless and merciless, Cartel-sponsored beatdown of April 12-15 2013, a beatdown designed to smash the 19-month floor that had held near 25, price fell further through June of 2013 before finally bottoming at...wait for it...80 on June 28, 2013. So, it has now been nearly two years and price is basically unchanged as of this morning.

But what has happened to the GLD over this same time period? Is its "inventory" unchanged, too? Hardly.

On the evening of June 28, 2013, the GLD reported "inventory" of 969.50 metric tonnes. Again, as of this last Tuesday and with price nearly unchanged in the 2 years since, total reported "inventory" is just 709.89 mts. That's a drop of 259.61 mts or nearly 27%. Using the same visuals as above, that's 8,347,000 troy ounces of about 21,000 London Bars filling 109 pallets. WOW! All while price is unchanged.

So, what's the point of all this?

To me, it's clear that the GLD is being drained of whatever physical gold it holds. This gold is being used to satisfy insatiable Asian/Eastern physical demand. If you own shares of the GLD and you think you actually own "gold", you don't. What you own is a simple paper proxy for the gold price. Suitable for day-trading and that's about it.

If you want to really own gold, your only option is to do what the Chinese, Russian, Indians et al are doing...BUY IT AND TAKE DELIVERY. You don't own it unless you hold it. In the end, when the music stops playing and the paper charade fails, those owning shares of GLD will find themselves wanting just the same as any other holder of an unallocated or pooled account.

TF

www.tfmetalsreport.com/freetrial

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  7 Comments

Marchas45
Jun 4, 2015 - 11:55am

Well I'll

Start With This One 1st

lakemike49
Jun 4, 2015 - 11:56am
lakemike49
Jun 4, 2015 - 11:57am

well

2nd

CPE
Jun 4, 2015 - 12:27pm

GLD

Got Gold? lol

Jun 4, 2015 - 1:22pm

Great article, Turd!

Pretty much puts paid to the fiction that they "only sell when the price drops" to balance accounts. Someone should call GLD investor relations and present them with this data and ask for a comment on the record...

4 oz
Jun 4, 2015 - 7:43pm
Fred Hayek
Jun 4, 2015 - 8:27pm

Vlad is not letting off the gas pedal. Russian gold to = German

Over at Investment Research Dynamics, Dave Kranzler has the story that the head of Russia's central bank has announced their intention to increase gold reserves from approximately $360 billion to $500 of gold at today's prices. This would give Russia nearly the same total gold reserves as Germany.

https://investmentresearchdynamics.com/russia-to-take-its-gold-reserves-up-to-500-billion-from-360-billion/

In an actual market, a central bank announcing that it is going to purchase several hundred tons of gold would probably be very good for price. But we can only hypothesize about that in June 2015.

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Forum Discussion

by silver66, 14 min 17 sec ago
by Green Lantern, 2 hours 17 sec ago
by NW VIEW, 2 hours 8 min ago
by argentus maximus, 2 hours 27 min ago
by sierra skier, 2 hours 28 min ago
randomness