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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turd [at] tfmetalsreport [dot] com ()

  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.

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