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

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Island TealOzymandias
Jan 27, 2016 - 3:11pm

Same but Different

Look at Auto, Consumer, Education, P to P

Different decade, Different sectors but still same tactic.

Look at Clayton Homes and Vantage - that is a mind bender

https://www.zerohedge.com/news/2015-07-21/presenting-americas-900-billio...

garth
Jan 27, 2016 - 11:46am

100 day gold

Is there much of a chance we'll drop below the 100 day again in gold today?

James Crightonsilver66
Jan 27, 2016 - 11:38am

Indeed Silver-66

... and all 3 are scams to allow the continued control of society by a psychopathic elite ..........

jc

Ozymandias
Jan 27, 2016 - 11:30am

Is Wall Street packaging car loans like MBS?

I heard a commercial on radio for a firm that was offering re-finance of car loans at a lower rate with no payments for two months and a $200 cash payment. Since most car loans are underwater I'm wondering "How are they doing this?". The question that popped into my mind was "Are they doing the same thing with car loans that they did with home loans at the height of the home loan debacle?". Is the BIG SHORT being reinvented in car loans? Makes me scratch my head.

Keep stacking

silver66TF
Jan 27, 2016 - 11:14am

London jury

I take that to mean the separate country called the "City of London" that is located on the island of Britain that is surrounded by a city called London. Not to confuse anyone (like Vatican city or D.C.)

Silver66

Bollocks
Jan 27, 2016 - 11:02am

Libor

According to BBC News:

"Prosecutors alleged that the brokers conspired to rig the rate in exchange for treats such as takeaway curries and drinks."

Right.

https://www.bbc.co.uk/news/business-35422866

usk
Jan 27, 2016 - 10:38am

I am so disgusted

I am so disgusted. No one single prosecution in this Libor case. They stole, they got rich and they are free now. What a wonderful world. What are we going to tell exactly to our kids in this context when they decide to give up or go to drugs because everything is so corrupted? How can we tell them that it's not true? How can we as parents still do our job about moral and education if the justice against these raptors is not conducted? This decision is much more important for all of us, this decision simply destroys the values of honesty and effort we try to transmit to the coming generation.

I am speechless.

Jan 27, 2016 - 10:25am

And in a stunning development....

Two key words to note: "London jury"

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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.

"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.

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