A Comex Bank Run For Scotia Mocatta

While much has been made about the record low Comex registered gold inventory, we've also been following a slow-motion "run" on the gold vaults of Scotia Mocatta. Could this be evidence of failing confidence in the bullion bank system?

First, a reminder of what the terms "eligible" and "registered" mean:

Gold held in the eligible category is gold that meets the exchange requirements. Eligible gold is simply the gold that is stored in Comex warehouses. The Banks store/vault this gold for private clients and this gold is NOT available for immediate delivery to futures contract holders.

Registered gold means that the gold has been certified to meet the exchange standards for purity and size. Registered gold is deliverable or available for delivery to a long contract holder standing for bullion delivery.

OK? Then let's get started. No sense spending a lot of time with speculation. Instead, we'll just give you the numbers and let you decide for yourself.

The oldest CME Gold Stocks report we could find in our files is from almost exactly two years ago today and dated September 30, 2013. Note the size of Scotia's registered, eligible and total vault. (For fun, you might also note registered gold total for all six depositories. See the blue arrow.)

<click to enlarge>

As you can see, two years ago The Scoche reported to have holdings of 168,579 ounces of registered gold and 2,820,376 ounces of eligible gold for a total vault of 2,988,955 troy ounces or about 93 metric tonnes of gold.

OK, with that report as a reference, let's fast forward a few months to the report dated January 13, 2014. As you can see below, Scotia's vault is down a little bit. Registered gold is just 88,532 ounces and eligible is 2,524,008 ounces for a total vault of 2,612,540 troy ounces or a little over 81 metric tonnes.

Moving forward, our next snapshot is dated August 12, 2014 and, WOW, look at the change! Scotia's registered vault has soared to 303,091 ounces and it's eligible vault is back up to 2,748,423 ounces. This brings the total vault up to a whopping 3,051,514 troy ounces or nearly 95 metric tonnes of gold. (Also note that the TOTAL Comex registered vault has grown to 1,106,902 ounces.)

Let's fast forward again and review the report from March 5, 2015. There hadn't been much overall change for the previous seven months and you can see the continued, static nature of the reporting below. As of the previous day, Scotia reported registered holdings of 345,778 ounces and eligible holdings of 2,720,391 ounces for a total vault of 3,066,169 troy ounces or still about 95 metric tonnes.

And now here is where the intrigue begins. Did you notice the withdrawal on the report above? That day, Scotia reported a movement of 114,790 ounces out of their registered vault. At the time, it seemed like no big deal...just the daily Comex delivery shenanigans. However, that withdrawal marked a significant top in the total size of Scotia's Comex gold vault.

Let's count it down. Here's April 16, 2015. Note that the total vault is already down to 2,282,697 ounces or 71 mts:

By April 21, 2015, they're down to 2,164,737 or 67 metric tonnes:

And by May 7, 2015, they're down to a total of 1,879,274 troy ounces or 58 metric tonnes:

So, was this just a two-month anomaly? Did gold soon begin flowing back into The Scoshe's vault? Nope. Below is the report from June 16, 2015. Scotia's vault now holds just 176,734 ounces in registered gold and 1,446,588 in eligible gold for a total of 1,623,322 troy ounces or a little over 50 metric tonnes:

Here's August 10, 2015 showing 180,412 in registered and 1,124,028 in eligible for a total of 1,304,440 troy ounces or just over 40 metric tonnes of gold:

Which brings us to the most recent report dated yesterday, September 24, 2015. The latest total for the amount of gold held in Scotia Mocatta's Comex gold vault are as follows:

  • Total registered gold: 92,017 troy ounces
  • Total eligible gold: 1,084,123 troy ounces
  • Total vault: 1,176,140 troy ounces or 36.6 metric tonnes
  • (Additionally, be sure to note that the TOTAL Comex registered vault, which peaked at over 1.1 million ounces in August of 2014, remains at just 162,034 or down about 85% in a little over a year.)

    So, to summarize...Over the past seven months, the Comex vaults of Canada's largest Bullion Bank, Scotia Mocatta, have seen significant and persistent withdrawals. How much? See below:


    3/5/15 345,778 2,720,391 3,066,169 OR 95.37 mts

    9/24/15 92,017 1,084,123 1,176,140 OR 36.58 mts

    TOTAL CHANGE (253,761 or 73.4%) (1,636,268 or 60.2%) (1,890,029 or 61.6%)


    Ultimately, the question you must ask yourself is this:

    Are we seeing a "run" on the "bank"?

    Over the past 6+ months, clients of Scotia Mocatta, technically the oldest of all the Bullion Banks, have removed over 60% of their gold stored and kept in safekeeping with this company. Hmmm. Why the sudden rush to re-establish ownership and lay claim to gold held within The Comex vaulting system?

    Again, nearly 60 metric tonnes of gold, stored by The Scoshe for their clients, have now been removed. And, over the same time period, total Comex registered gold has fallen by 85%?

    Does this constitute a slow-burning lack of confidence or "run"? Are clients of Scotia Mocatta seeking to slowly, gradually reclaim their gold from the over-leased and over-hypothecated bullion bank system?

    Would you want to be left holding the bag with nothing but paper certificates and warehouse receipts when the paper derivative pricing scheme finally collapses? Me, neither. And perhaps the closely-connected clients of the world's oldest bullion bank feel the same way? If you hold gold in safekeeping with Scotia or any of the other Bullion Banks, you might want to follow their lead.


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