Last week, there was a lot of hubbub regarding the record low Comex registered gold inventory. At the time, we suspected that the vault movements were due to December "deliveries" and today we got our answer.
Before we start, please go back and review this article from one week ago. We rushed to get it published last Tuesday as it was important for everyone to understand the context and likely rationale for the movement of the "gold" that left the registered vaults at an all-time low.
At the time we speculated this:
"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."
With today's latest CME Gold Stocks Report, it appears that this is precisely what transpired.
Again, the important points are these:
- The proprietary account of JPMorgan stopped (took "delivery") of 2,021 Dec15 gold contracts during the delivery month of December.
- No gold was moved at all during December.
- Suddenly last Tuesday, 201,345 oz get reclassified from registered to eligible at Brinks, HSBC and Scotia. See below:
And now look what was reported today. The latest Gold Stocks report shows ALL of that same gold finally being moved from Brinks, HSBC and Scotia. And where did it go? Directly into the eligible vault of JP Morgan. Note that JPM also booked in another one of those perfect and precise, 3 metric ton jobs, too:
So, this obviously connects all of the dots. JPM stopped over 200,000 ounces of gold for itself back in December and, just today, they finally booked in the gold, having it sent over from the House Accounts of HSBC and The Scoshe. This still leaves two important points, though:
- Once again, the Comex delivery process is shown to be nothing but a Bullion Bank Circle Jerk where a bank takes delivery one month, only to turn around and issue the gold back out the next. Rarely does gold ever actually leave the Comex vaulting system and, today's action notwithstanding, rarely does it even move from vault to vault.
- Total Comex registered gold remains at all-time lows. Though some gold has recently been re-classified from eligible to registered as Feb16 deliveries begin, the total Comex registered gold vaults still hold just 145,000 ounces with 3,687 Feb16 contracts still open and standing, representing as much as 368,700 ounces of delivery obligations.
As usual, we'll continue to monitor this entire charade closely as the month of February will, no doubt, bring a whole new set of interesting developments.
TF
