New Record Low Comex Gold Inventory

37
Tue, Jan 26, 2016 - 4:00pm

Some stunning and sizeable moves within the Comex gold vaults today drops the total registered gold down to just 73,949 troy ounces, slightly more than just two metric tonnes. This raises the "Comex Bank Leverage Ratio" to a new all-time high of 542:1! What the heck is going on here?

Before we get started, here's your CME Gold Stocks report, issued on Tuesday for the vault activity of Monday (click to enlarge):

Note that, after the reclassification of registered gold to eligible gold by Brinks, HSBC and Scotia, the total registered gold has fallen today to a new all-time low of just 73,949 troy ounces...or slightly more than two metric tonnes. Additionally, based upon yesterday's total Comex gold open interest of 400,948 contracts representing 40,094,800 paper ounces of "gold", the "Comex Bank Leverage Ratio" has risen to a new all-time high of a whopping 542:1. This means that, as of last evening, The Comex was operating on a ratio of 542 paper ounces for every 1 ounce of registered gold. This is simply incredible and I'm sure ZeroHegde and others will soon have charts that demonstrate the absurdity of all of this.

However, I want to caution you...for now...from making too many quick assumptions as I think I can identify a possible reason for these stunning moves.

Recall that back during the December 2015 gold "delivery" phase, the Comex only "delivered" an underwhelming total of 2,073 contracts for 207,300 ounces of "gold". Of these 2,073 "deliveries", the House (proprietary) Account of JP Morgan stopped or took "delivery" of 2,021 contracts or 202,100 ounces. Remember that number...202,100 ounces.

We noticed at the time and were sure to point out that this is the fallacy of The Comex. JPM House allegedly took delivery of 202,100 ounces of gold but the daily Gold Stocks reports showed no gold actually moving or changing hands. See below. First, here's the daily Gold Stocks report from December 1 with JPM holding in their vault 7,975 ounces of registered gold and 339,923 ounces of eligible gold for a total vault of 347,989 ounces:

And now here's the Gold Stocks report from December 31. Note that, even after allegedly taking delivery of 202,100 ounces of gold during the December delivery period, JPM still shows just 7,975 ounces of registered gold and 337,121 ounces of eligible for a total of 345,096 ounces. Hardly any change at all!

So, here is how I think this all comes together and why I caution you against jumping to conclusions today.

Go back up and look at how much gold was reclassified yesterday between Brinks, HSBC and The Scoshe. Notice that the total is 201,345 ounces.

And how much "gold" did JPM allegedly deliver to their own, proprietary account back in December? Again, that number was 202,100 ounces.

And we went the entire month of December and all of January without seeing ANY sizeable deposits into JPM's Comex gold vault. JPM booked in one of those perfect and precise, two metric ton jobs back on January 4. This raised their total Vault to 409,396 ounces. On today's report it's still just 409,195 and still shows just 7,774 ounces of registered.

So, here's what I suspect...

This movement today of 201,345 ounces, out of registered and into eligible at Brinks, HSBC and Scoshe, is the actual "delivery" of "gold" for JPM from December. JPM now holds this "gold" in warrant or warehouse receipt form in their competitor's vaults and it's all in the eligible category. As February "deliveries" begin later this week, DO NOT BE SURPRISED if JPM now becomes the issuer with HSBC and Scotia taking "delivery". This would fit the pattern of the continual and endless, circle jerk parade that creates the illusion of physical delivery on the Comex and allows the exchange to claim and maintain dominion over the price discovery process.

One final item, however, and this is important: Again, let's wait to see what the Gold Stocks report shows tomorrow. Perhaps JPM will book in these ounces after all and place them back into the registered category. IF THEY DON'T, then we have another data point on the long list of signals indicating physical tightness in the global gold market. As recently as 2009, The Comex showed over 5,000,000 ounces of registered gold in its vaults. As recently as one year ago, the total Comex registered Vault exceeded 1,000,000 ounces. As of today, that number has fallen to a new all-time low of just under 74,000 ounces.

The February delivery period is about to begin yet there is only enough registered gold to satisfy just 740 contracts. This fraudulent scheme of hyperleverage may, indeed, be on its last legs. Only time will tell. For now, though, the month of February will certainly prove to be interesting.

Keep checking back here for regular updates and prepare accordingly.

TF

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  37 Comments

hammerman · Jan 26, 2016 - 4:04pm

I AM FIRST

TODAY HEHE

Marchas45 · Jan 26, 2016 - 4:11pm

Hope I'm 4th

But I can't Wait All Day. Keep Stacking

Damn I'm 2nd. You people must be sleeping. Lol

AlienEyes · Jan 26, 2016 - 4:25pm

4

four

J Siefert · Jan 26, 2016 - 4:29pm

3 - What's on tonight...

Where is everyone?

I believe that many of these bankers are also stacking and doing that big time. I can't help wondering how much gold and silver is privately held by these bankers and top-notch bank employees.

hanasector · Jan 26, 2016 - 4:38pm

New guy here with a dumb question

I can't understand how all that contracts get settled if there is no gold to take delivery. Not everybody decides to settle in cash, no? Aren't there few people want to take some actual physical gold. Thanks if someone can explains it in layman's term.

Gamble · Jan 26, 2016 - 4:51pm

Ok , now is the time

To buy phizz , if memory serves me right , we get a lot of selling pressure now until delivery month is over ! 

Gamble flying blind gamble

squib · Jan 26, 2016 - 4:51pm

I suspect the numbers matter not

and they'll magically increase soon.

amarula4 hanasector · Jan 26, 2016 - 4:51pm

New guy here with a dumb question Submitted by hanasector

it is 99.9% for paper trading and profit - if you stand for delivery big time, they ban you from the Comex - they can just do it

pbreed · Jan 26, 2016 - 4:53pm

Individual limit...

It's my understanding that an individual is allowed to own a maximum of 1500 comex contracts.

I could see that some billionare could buy 1500 comex contracts and stand.... that would only be $168M small change in the world of high finance....

pbreed · Jan 26, 2016 - 5:02pm

The front/delivery month

The front/delivery month position limit for Comex gold is 3000 contracts and it's 1500 contracts for silver.

matt_ · Jan 26, 2016 - 5:07pm

New guy...about Comex gold

I'm a layman too, but most trading in gold futures have no intention of taking physical delivery.

It is crazier than that, though. That is because most of the time if someone actually does take a delivery, the "delivery" is made with a paper receipt.

Mr. Fix · Jan 26, 2016 - 5:10pm

How low can it go?

Are they allowed to use negative numbers?

One has to ask, do the numbers matter at all?

COMEX-Total-Gold-Inventories-012616

SteveW · Jan 26, 2016 - 5:22pm

New guy: COMEX gold

A while ago a commentator reported that this "market" consisted of traders selling something they don't have to folks who don't want it.

· Jan 26, 2016 - 5:29pm

Musical chairs

Aren't you supposed to play this game with one less chair that you have participants?

But comex game rules now allow 542 people per chair...

I don't want to play!

hanasector · Jan 26, 2016 - 5:34pm

New guy: COMEX gold

Thanks guys... I was just curious how miners sell their gold and jewelers buy their gold. I guess bullion banks and Brinks do the such pick-ups and delivery with paper receipts if they really want to settle in physical gold., otherwise most of these are paper trading. And I guess the miners and smelters do direct deliveries to direct buyers bypassing COMEX altogether.

Gamble · Jan 26, 2016 - 5:59pm

542:1

What is that 54200 per ounce?

gamble Sinclair was right? Gamble

Bollocks · Jan 26, 2016 - 6:33pm

The usual, banal commentary

The usual, banal commentary at ZH misses the point. All caught up on "delivery" and "default" and "cash settlement".

Instead, focus upon the data point, itself. How and why did registered gold get so low? Down nearly 99% from 6 years ago! What is this telling you? Taken in tandem with all of the other anecdotal data points, again...what is 74,000 ounces and a Leverage Ratio of 542:1 telling you?

Comex gold futures trading will simply disappear when this is over. The question of default/delivery/settlement misses the greater point.

Bollocks · Jan 26, 2016 - 6:37pm

Oh my ... "US financial crisis comedy"

That's how the BBC started off an article about The Big Short

https://www.bbc.co.uk/news/entertainment-arts-35395067

The MSM in the UK is doing its job. Bonuses coming all round.

· Jan 26, 2016 - 6:45pm

tweet

BIGNASTY · Jan 26, 2016 - 7:57pm

Good looking out Turd...........................................

They gotta get up pretty early to beat Turd to the punch. Thanks for all you do! The emperor has no clothes and the blind are running around spouting off about cults and fair markets.

Bollocks · Jan 26, 2016 - 8:06pm

Not doubting your great work Craig

I was just pointing out that the Comex figures could well be completely fictitious and who knows what they are up to with these numbers.

Tap some figures in... manipulate perception.

Yes, I agree with your points but perhaps there's a game being played (and has been for some time) that we'll see later.

Or those figures are correct, in which case a default may be coming soon.

My thoughts.

bp9291 TF · Jan 26, 2016 - 10:05pm

Comex

Christian himself said last year that there was no need for physical for the comex was a paper market. With all the shift in physical delivery to the East could the comex turn purely into a paper futures market for the metals, with no influence over the price but not much difference than betting (sports etc) on direction of price etc?

Or get out of the metals business completely?

\\

J Siefert · Jan 27, 2016 - 12:24am

Turd said:"Comex gold futures

Turd said:
"Comex gold futures trading will simply disappear when this is over. The question of default/delivery/settlement misses the greater point."

Maybe that will happen when according to Jim Willie the dollar rises and rises and eventually disappears completely. (Sort of up it's own backside and out pops his Scheiss Dollar for Americanus Idiotus.) .... [With apologies to anyone who really knows Latin]

James Crighton Bollocks · Jan 27, 2016 - 12:37am

The BBC and George Orwell

Regarding the BBC, it serves to remember that it was in response to working there that George Orwell (Eric Blair) wrote "1984" and about Big Brother (Big Brother Corporation).

The propaganda it produces becomes more obvious - even painful - as the days and weeks go by - presumably to counteract the internet.

It really is quite a joke these days - only the clinically stupid continue to watch and believe it - the problem is that 99% of people in the UK are, in fact, clinically stupid.

The World is in a sorry state.

jc

Sir Peter Latterman Fortenton · Jan 27, 2016 - 4:03am

zerohedge comment, I really liked this

(Tall Tom)

responding to ...."I love the Gold articles, all the stackers, resetters and foil hatters go crazy."

The bottom will be ZERO.

The problem with you,lickspitter, is that you still have faith and confidence in a corrupted system which is destined for failure.

You are as the common folk as you confuse price andvalue. You definitely lack the wisdom to be wealthy. You are the FOOL.

Well the FOOL is the one who confuses price and value. He is the one who can tell you the price of most anything, as most fools can, with the click of a mouse on the Internet. It takes little skill to do that, actually, as the Internet is a wonderful storehouse of information.

On the other hand,, unlike theFOOL, who concerns himself with price, the WISE MAN is not so concerned with theprice and is most interested in VALUE.

The FOOL confuses Price andValue as he believes, erroneously that the price ISthe value when nothing can be farther from the truth.

On the other hand the WISE MAN understands that VALUEhas little to do with PRICEand that the two concepts aregenerally exclusive. Thus the WISE MAN will eagerly spend his currency for that which has VALUE. The WISE MAN is always seekingVALUE as he understands how to APPRECIATE HIS WEALTH. (I mean that word as a Financial Term).

The FOOL will believe that hiswealth is measured by the amount of currency that he has. Thus the FOOL's main concern is that of advancing or declining PRICE. It consumes his every financial decision.

On the other hand the WISE MAN understands that hiswealth is measured by the VALUE which his assets have and the knowledge that he has.

The knowledge of these simple truths is what actually separates the WISE MAN from the FOOL.The FOOL will reject them, and lose everything that he owns, whereas, the WISE MAN will embrace them and prosper as a result.

What is VALUE then, if it isnot PRICE?

VALUE is the measure of theUTILITY of an item, itsusefulness.

Well Gold is an INDUSTRIAL METAL. The Financial INDUSTRY uses it and is very concerned with it.

Perhaps it is why the WISE MAN is not too concerned about declines in the price of Gold as measured in US Dollars.

US Dollars are losing theirVALUE, their USEFULNESSI am not writing that US Dollars have lost all VALUE. But I am writing that their usefulness is in a Long Term decline and will soon be no more.

Thus pricing Gold in US Dollars is a FOOLISH thing to do.

In fact the WISE MAN loses no value as long as he does not sell his metal.

And you, being the FOOL, thePOOR MAN, is that which confuses you the most. As youequate wealth with US Dollars rather than to HARD ASSETS with UTILITY, then this is impossible for you to comprehend. It is just a difference in perspective, in mindset, that you have failed to conceptualize.

US Dollars are NOT WEALTH. They are a NOTEfor a claim on FUTURE WEALTH. (Real wealth has VALUE.) They are a derivative of that promised future wealth, regardless if that wealth is ever manifested...or not.

A US Dollar is a Federal Reserve NOTE. A NOTE is just a promise to pay. Pay what? It is a payment in lieu of future goods and services.If those future goods and services are not produced or available in sufficient quantity, or, if at allthenthe US Dollar is worth much less, or, if not worthless, as a result.

Go ahead and junk this post, reject that which I have told you, and demonstrate yourFOOLISHNESS.

sengfarmer · Jan 27, 2016 - 4:59am

Sir Peter

 Excellent, great find.

Sir Peter Latterman Fortenton · Jan 27, 2016 - 7:39am

"Lickspitter" is a

"Lickspitter" is a disgusting, profane and vile old troll who used to hang around here until the Vault was created.

Good riddance.

hanasector · Jan 27, 2016 - 9:21am

Gresham's law

I believe that Gresham's Law has everything to do with what is occurring with COMEX and LBMA. Simply the good money is disappearing from circulations. I suspect JPM and other Bullion Banks are using COMEX to accumulate their gold and silver while depressing PM prices by naked selling. They are killing two birds with one stone. That stone is COMEX.

This is the financial crime at highest order but US government will not touch it and actually encourage these criminals to do same thing they have been doing since 2011. It has everything to do with the effort to keep USD as world's only reserve currency.

· Jan 27, 2016 - 10:25am

And in a stunning development....

Two key words to note: "London jury"

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

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