Massive Inflows Into GLD

92
Fri, Mar 4, 2016 - 11:24am

I was already planning to write a public article today about the massive additions to GLD "inventory" in 2016. But now, with news hitting about Blackrock's gold ETF, writing this post has clearly become a priority.

So, before we get started, be sure to review this: https://www.zerohedge.com/news/2016-03-04/blackrock-suspends-gold-etf-is...

Here's the full press release from Blackrock: https://www.businesswire.com/news/home/20160304005402/en/Issuance-IAU-Go...

As ZH states: "It appears the huge demand for physical gold (and lack of supply) is finally catching up with the manipulation of paper prices. If this is anything other than a brief technical suspension, it could well unleash panic buying and as we already pointed out - there is no physical gold!"

I guess we'll just have to see what happens next. However, as we've maintained for years, all it will take is ONE delivery failure and the entire Bullion Bank confidence scheme will come crashing down. While this news today is not technically a delivery failure, all of this surging demand for gold certainly seems to be pushing The Banks to the brink.

To that end...the topic of today's post...

We've long maintained that the GLD is nothing but a bank-sponsored vehicle for syphoning away investment demand from actual, physical gold. Allegedly, the GLD saw massive inflows of "gold" up until 2012 and then it saw its "inventory" cut in half between 2013 and 2015. We've wondered from where the GLD and its custodian, HSBC, would source new gold WHEN investment demand for gold finally returned. It now appears that we are in the early stages of getting our answers.

To that end, please consider the incredible alleged inflows of "gold" into the GLD in 2016.

As noted above, the GLD stated that it held 1,349.92 metric tonnes (mts) of "gold" in its "inventory" on January 1, 2013. As price was smashed lower over the next three years, the GLD "inventory" moved lower, too, reaching a low of just 630.17 mts on December 17, 2015. Now let's stop right there for a moment and consider the significance of the date, December 17, 2015. What happened on that date? Why does that sound so familiar?

Oh, yah. I remember now. December 17, 2015 was the day following the announcement from Mother Fellen that her Federal Reserve was raising the Fed Funds rate for the first time in nearly 10 years. What did the chart look like on that day? See below for one from the archives:

So, what happened the day after that, Friday, December 18? Not much. Gold rallied back a little and closed higher at 66. N0t much to get excited about. Price was barely off the lows of 50 seen the day before and every purported "analyst" was projecting triple digit gold prices for 2016.

But not us at TFMR. In fact, we'd already been calling for a January rally and something else happened on December 18 that really got our attention. For the first time in nearly two months, there was an addition to the GLD "inventory" that day. And we weren't talking just a few ounces. That day, December 18, saw a GLD addition of 18.74 metric tonnes, growing the alleged "inventory" by nearly 3%. Here are c&ps of two comments we added to that evening's podcast thread:

WOWOWOWOWOWOW!

Submitted by Turd Ferguson on December 18, 2015 - 4:57pm.
15
That has to be just about the largest one day addition of "gold" ever seen!

Maybe an AP paying back a big short?

More significantly, maybe another sign of the possible bottom discussed in this podcast???

And

I'm looking back over my notes from the past few years

Submitted by Turd Ferguson on December 18, 2015 - 5:04pm.

Today's HUGE dump of gold INTO the GLD is a very good sign of an impending rally. Back in January, the GLD added 9.56 mts on Jan 15, 13.74 mts on Jan 16 and 11.35 mts on Jan 20.

Other significant additions occurred in April and September. Nothing even close to 18.74 mts in a single day. And how about the timing? Big final washout yesterday following the rate hike. Price recovers 1.5% today and GLD "inventory" grows by 3%. Hmmmm.....Will be chewing on that over the weekend.

So, now, he we are on March 4, 2016 and price is $1275 as I type. That's up $225 or 21.4% from the lows December 17. And what has happened to the GLD "inventory"?

  • It added 4.76 metric tonnes just yesterday
  • This brings the total addition for just this week to 30.93 mts
  • For all of 2016, the GLD "inventory" has now grown by over 150 mts
  • And since the low of December 17, total "inventory" has now grown by 163.16 metric tonnes

(Leaving aside that it will take Germany over seven years to repatriate 300 metric tonnes and the GLD has allegedly dug up more than half that amount in less than ten weeks...)

And now let's look at an updated chart with the addition of just one, simple notation:

At a time when global demand continues unabated, with China, Russia, India and others all importing gold on a monthly basis, the GLD has managed to add 163.16 metric tonnes to its "inventory". How much gold is that? About 5,246,000 troy ounces. How much is that? Well, there are 400 troy ounces in every London Good Delivery bar so we're talking about more than 13,000 of these:

And if you stack 192 of those bars onto a pallet, you'd fill over 68 of them:

That's A LOT of gold...again, all at the same time as Russia and China both import about 20 mts per month: https://smaulgld.com/russia-increases-gold-reserves-by-ounces-in-january... and India imports up to 100 mts per month: https://www.business-standard.com/article/markets/gold-import-bill-up-12...

Where the heck do you suppose all of this gold is coming from???

Look, if you can't see that the Bullion Banking Confidence Scheme is seemingly hanging by a thread, then I'm not sure there's much I can do to help you. Additionally, if you continue to own ETFs as a proxy for the real thing, the day is coming when you're going to find yourself supremely frustrated and angry. When the music stops, you're going to be left standing without a chair to sit on.

All signs point to 2016 indeed being the "year of consequence" that we forecast. Perhaps The Banks can keep their scheme going a bit longer, perhaps not. Just yesterday, they added nearly 26,000 contracts of open interest (paper obligations of 2.6MM ounces or an additional 81 metric tonnes) to the Comex in a seemingly desperate attempt to contain price and, by extension, suppress sentiment and physical demand. Will it work? Will they soon be able to play their old tricks of reversing and smashing price, thereby "calming the storm"? Or, instead, will price continue to rocket forward with increasing speed as The Banks get squeezed for once? We're likely not going to have to wait too long to find out.

For today, let's just leave it here:

Continue to prepare accordingly by stacking physical metal, not paper certificates.

TF

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ag1969
Mar 4, 2016 - 1:28pm

Digital wallet upgrade now uses facial recognition for purchases

As we march steadily toward a cashless society, Google is naturally at the forefront of seeing it come to fruition as quickly as possible.

Despite the fact that several years ago Google had a major security scare with its first incarnation of the digital wallet smartphone app, which required a temporary shutdown, they are announcing a new system being tested which does not even require the smartphone at all.

A growing number of people apparently find that having to remove their smartphone is just such a hassle that they are prepared to embrace payment via biometrics - in this case, facial recognition.

As a perfect indicator of the target market, please read this sad quote:

"Imagine if you could rush through a drive-thru without reaching for your wallet, or pick up a hot dog at the ballpark without fumbling to pass coins or your credit card to the cashier," Bhat said. (Source)

In one sentence, that quote might represent literally everything that is wrong with modern society.

The new system is being cleverly called Hands Free; and, as the second indicator of its potential mass appeal, it will be rolled out first at McDonald's and Papa John's fast food restaurants.

A second more serious component to this ties in with the recent rollout of citywide WiFi systems that keep people connected at all times. Layered on top of that is the arrival of billboards with hidden cameras built in that can film you, then track you through your mobile phone. This reality makes the following information more chilling than convenient:

The digital wallet uses Bluetooth and Wi-Fi connections alone [sic] with location sensing capabilities in smartphones to detect when someone is near a store enabled with Hands Free payment technology.

"When you're ready to pay, you can simply tell the cashier, 'I'll pay with Google,'" Bhat said.

"The cashier will ask for your initials and use the picture you added to your Hands Free profile to confirm your identity."

At some locations, Google is experimented [sic] with using cameras in stores to recognize people with Hands Free digital wallets so they could pay without even pausing. (emphasis added)

The number of people already prepared to accept this system numbers in the millions, according to Google.

https://www.sott.net/article/313630-I-ll-pay-with-Google-Digital-wallet-...

imfd
Mar 4, 2016 - 1:28pm

Maybe this is the weekend when

the paper market implodes and we find out Monday why the upside limits to gold and silver were put in place, that would be nice. TF, thank you for everything, everyone should stop for a moment today and wonder what we would be doing or what we would be reading without this site, beyond value, thanks mate !

Mar 4, 2016 - 1:22pm
JQuest
Mar 4, 2016 - 1:20pm

Whats with all the V Bottoms?

DJIA = Morning plunge then prompt V bottom to the upside then what looks like minimum support capping as not let the stocks fall.

NASDAQ = Same

S & P = Same

Crude = Same

The market indicators are acting very suspiciously, as the hidden hands are hard at work.

To me the sign of manipulation is the constant saw tooth action.

JQ

Orange
Mar 4, 2016 - 1:05pm

And don't forget about copper rallying too

The pressure will increase on JPM et al and they may have to pull back. Will be plenty of buy-stops to run IF price can extend through the October 28 highs of $16.38...and it should, IF gold and copper continue higher.

Since early February, we've discussed silver needing to "catch up". However, the extreme naked shorting of JPM and the other commercials has contained it. But the "relative price" vs gold appears to be $17+.

Mar 4, 2016 - 1:03pm
Orange
Mar 4, 2016 - 12:57pm

Turd

With Gold at $1450, where do you think silver would be? $18+

I was tempted to sell my uslv yesterday, but thought something is different this time.

Probably won't sell for a while.

Edit: where is Dr J. Hopefully he sold his dust the other day.

TF
Mar 4, 2016 - 12:51pm

reiterating

Again, it would be a very positive technical signal IF gold can somehow close the week ABOVE the intraday high of Feb 11 at $1263.90. This will get the attention of the momo-chasers, too.

Last is $1271.20

TF
Mar 4, 2016 - 12:50pm

fwiw

I'll very likely end up giving back $350 of the $400 that I made...but...when playing with house money, sometimes it's fun to let it ride.

Mar 4, 2016 - 12:48pm

Self-fulfilling TA?

As Alasdair pointed out yesterday, traditional technical analysis teaches that the successful resolution of this pennant means that the rally is only halfway completed. Since we started at $1060 and moved to $1260 before beginning the "pennant" or "flag", this suggests something like $1450 as the next target.

OBVIOUSLY, The Bullion Bank Cartel will fight us tooth-and-nail on every UPtick. However, as more and more classically-trained technicians see this formation, there will be more and more Spec money flowing into all forms of gold. So, we'll see...

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