A Bear Market in GoLD

Everyone's favorite faux depository reaches a dubious milestone.

As you know, we've been keeping track of the depletion of the GLD. Today, let's use CNBS' favorite metric, the 20% decline, to characterize the "inventory".

On 1/2/13, the GLD showed an alleged "inventory" of 1,349.92 metric tonnes of gold. As of this evening, the GLD "inventory" is listed as 1,078.54 metric tonnes following another drawdown today, this time for 2.10 tonnes.

So, year-to-date, the GLD "inventory" is now down 20.1%...thus the title of this post. What does this mean? How much gold is this? At what rate is gold exiting the GLD? Here are some random bullet points:

  • Down over 20% means that for every 5 bars that the GLD allegedly held 4 months ago, it now holds only four.
  • GLD has shed 271.38 metric tonnes YTD, that's about as much as the entire holdings of Austria and more than the combined holdings of Brazil, Denmark, Australia and Indonesia. http://en.wikipedia.org/wiki/Gold_reserve
  • Using the same source as above, even after this 20% decline YTD, the GLD still holds as much gold as the country of Switzerland. Rrrrright....uh-huh....
  • It took over two months for the GLD lose it's first 100 tonnes for 2013. The "inventory" fell to 1,243.05 on March 7.
  • It then took just six weeks to lose the next 100 tonnes, reaching 1,145.92 on April 16.
  • Three weeks ago tonight, just days before the massive, two-day beatdown of paper price, the "inventory" stood at 1,200.37. Again, this evening, it stands at 1,078.54. That's nearly 122 metric tonnes (over 10% or roughly the size of the total holdings of Mexico) in just the past three weeks alone.
  • In contrast, the SLV has seen its "inventory" rise YTD. It began 2013 at 10,084.96 metric tonnes. As of this evening, it allegedly holds 10,407.44. Up 3% since the first of the year. Now Bob Pissonme would have you believe that the drop in GLD "inventory" is related to simple investor liquidation and re-allocation. If that's the case, how do explain this change in the SLV? <crickets>

So, let's have some fun and attempt to put all of this into context. Again, the GLD has now shed 271.38 metric tonnes in just the first four months of 2013.  This is:

  • 8,725,069 troy ounces OR
  • 21,813 London "good delivery" bars OR
  • If you stack those bars onto pallets holding 192 bars a piece, it looks like this:

Yes, that's 114 pallets of gold, each holding 192 bars, each bar weighing 400 troy ounces. Gone. But, to where? Back to Authorized Participant vaults for safekeeping until "investors" begin to accumulate shares of GLD again? That's what Bob Pissonme would have you believe but is that really the case? Perhaps something else is going on, instead? We shall see, now won't we...

It certainly is an interesting time to be alive.



Hammer's picture

or you could try this. Tehe

or you could try this. Tehe value of the money is IN the money. The value of paper money can be changed.

As a nice aside, it's nice to know it isn't just us getting ripped off ;)

Texas Sandman's picture

True cost of mining silver

If the conclusions of this article are correct, and if you can buy silver at the spot price, you are buying it at the cost of production.

I think that's a very, very good deal.



Occasnltrvlr's picture

Illustrating the Difference...

...between paper gold and physical gold.

Give her two Snickers bars (I know she's an adult, it needn't be candy, just something easily consumable).  Tell her they are hers.  Have her give one of them to you, and give to her a small piece of paper stating "I owe you one Snickers bar".

Eat the Snickers bar.

silver66's picture

@ Hammer

I have listened to several of this man's youtube talks. He is an interesting cat. Sees things very clearly and able to communicate to his audience


tmosley's picture

@Hammer:  That is a portion

@Hammer:  That is a portion of one of my favorite flash videos of all time.

For those who haven't seen it:

I like what happened to the banker after the bank run in the 10th century.  Too bad it doesn't happen these days.

¤'s picture

That noise you thought you heard...

.....was the tightening clench of a pair of iron fists taking a firmer hold on all that it can get it's hands on.

In order to survive or prosper you must have a full respect or understanding of what you're up against so that nothing should come as a surprise.

In that sense, as I've always maintained, expect the unexpected (the opposite of "fair") because we haven't seen anything yet....but we will.

And For Its Next Trick, JPMorgan Takes Over The SEC

JPM wasn't satisfied with demonstrating its implicit control over the US bond issuing authority by promoting Matt Zames to the post of COO, the same Matt Zames who courtesy of his Chairmanship of the TBAC,also effectively runs the US Treasury where he "advises" the brand new Treasury Secretary who has no idea what he is doing. Oh no. Just to cover all its bases, Jamie Dimon's firm decided to also take over the SEC as well.


Hammer's picture

The Fed is the banks. The

The Fed is the banks. The banks are The Fed. The Fed is a private organisation made up of said banks. We all know this but I just thought I should repeat this in case we forget

Hammer's picture

Many are caught below 1440

Many are caught below 1440 and above 1470. Hence the current range. If we hit above 1470, there may be a stop hunt to the upside. Who knows ? I don't that's for sure. Fun to watch though :)

edit. GS is recommending to short au again. lol. Don't they know it may be a holiday in Asia but the shops are still open - lol

¤'s picture


....and noteworthy.  Biggest loser...GLD

Notice the 2 top gainers....Japan.

Notice the etf.....FLOT.

Counterintuitive? Or just out of the box thinking obvious? All is not as it seems it should be or what some might want it to be.

The moral....diversity....and as a wise man recently said on here...stack plenty of options going forward. It's good to stack, no doubt. It's ok to stack other things also.


Gold ETF loses No. 2 spot to emerging markets

May 1, 2013, 6:53 PM

April fund flows knocked the SPDR Gold ETF GLD -0.01% out of the No. 2 spot among the largest exchange-traded funds as investors pulled out $6.77 billion, according to IndexUniverse late Wednesday.

That 18.8% drop left the ETF with $50.92 billion in assets under management. Gold prices GCM3 +0.19% dropped 7.8% over the month of April to $1,472.10 an ounce.

It also made the new No. 2 ETF the Vanguard FTSE Emerging Markets ETF VWO -0.01%, which also happened to be the second biggest loser as far as fund outflows with $1.55 billion. The fund is currently at $57.69 billion in assets under management.

The biggest gainers over April were the iShares MSCI Japan ETFEWJ -0.17% and the WisdomTree Japan Hedged Equity ETF DXJ . The EWJ gained $2.72 billion for $10.72 billion AUM, and the DXJ gained $1.45 billion for $7.7 billion AUM. The complete report can be found atIndexUniverse.

The largest ETF is still the SPDR S&P 500 ETF SPY +0.09% with $132.15 billion in assets under management.  The fund only contracted by $86.9 million in April.


–Wallace Witkowski


Magpie's picture

If you have a little time

you might want to watch this.   And then you might want to figure out where to bury a spare gun and some ammo.


here, since neither link seems to convert to a video.  Gun confiscation in New Orleans:


Ok, I give up.  Bleh. Now the first one looks like it's good to go.

Monedas's picture

This is not a "Bear" market !

This is a "SCARE" market !  Nothing I can do about it .... all my gold .... isn't at the bottom of a lake .... it's at the bottom of a filled in hole .... and I'm too damn tired .... to go dig it up .... for every little blip on the radar screen .... especially, when we all know .... TPTB .... will be fucking with our faith FOREVER !  Like Rush says about liberals .... we don't need to get along with them .... we need to defeat them !  Except for yours truly .... (just a touch of modesty to be credible) .... this is a pretty exceptional group of people .... who would do a better job of running things .... than the fiat fools .... that run the show now !    In a free system .... people with better ideas .... should rise to the top !        Monedas    1929      Comedy Jihad New World Order Waiting In The Wings World Tour   devil PS:  Katie Rose will be my Secretary of Agriculture ! PSS:  DPH !  The Watchman just passed you .... this is like the movie ET .... and you barely got a pulse ?

DayStar's picture

Harvey's Up!

Harvey: Today, we lost another 3.31 tonnes of gold from GLD which follows the 2.14 tonnes of gold lost yesterday. As a reminder, the total Comex gold had inventories of around 11 million oz in 2011. Today it held just above 8 million oz. (8.000 million oz). Today we also gained 1.448 million oz of silver at the SLV. No doubt that this is really "paper" silver.  • The President and Executive Chairman of CME Group Inc, Terrence Duffy, said, "People don’t want certificates, they don’t want anything else. They want the real product...I think that is the value of gold...Whether you are going to own mining stocks or anything else. I think the coins are probably of more value than anything else." • Reuters: The Arizona Senate on Tuesday approved a measure to make gold and silver legal currency in the state. • Debarati Roy: In Australia, buyers were waiting in lines a quarter of a mile long to get minted coins, and jewelry shops in India and China ran out of gold in a single day.  Trading for the benchmark contract on the Shanghai Gold Exchange surged to a record last week, while efforts to secure supplies of gold in India caused premiums to jump to five times the level before the slump. • Tyler Durden: Australia PMI was an absolute disaster printing even worse than the Chicago PMI, plunging from 44.4 to 36.7, meaning that the Royal Bank of Australia is about to join the global "reflation effort." • Nigel Farage (MP): His fear is that what will break up the Euro, "is not the economics of it, but wholesale, violent revolution." • Harvey: Everyone was waiting for the fed announcement and got an absolutely brilliant statement: the Fed is prepared to "increase" or "reduce" purchases!!! surprise All this and more on...

The Harvey Report!



BIGNASTY's picture


Please tell me someone else has heard the radio ad pushing tungsten as an investment? Sounds bullish for the Fed?

PuraVida's picture


Found this on Despair.com, thought you might enjoy it:

Another from Despair.com that proudly hangs in my office:

TomMack's picture

Increase in QE∞ ?

that is the first time i heard increase monthly money printing.  this is a nice trial balloon for increased printing.  also an effective way to look prudent by mentioning decrease too.  this is real mope.

JustDale's picture

Thank you, JY896

I've been perusing this site since it's inception. But loggerheads @ Captcha (?) prevented a successful Registration early on, and frustration has kept me 'on the front porch' since then.  

There have been moments along the way, tho', when I've found myself in the middle of a big belly-laugh after reading something someone has said here, and it is at those times being un-registered became too burdensome, because it barred me from being able to say 'Thank you' to the person who caused my laughter.

Personally, at this point in the proceedings, I find these moments when laughter finds me more precious than the metals I stack. For me the adage is true...'Laughter doeth good, like a medicine.'

So...Thanks to you, JY, for the 'Welcome Aboard', and Thanks to All for the gifts they bring to, and freely distribute at, Turd's House.

SilverSurfers's picture


My friends, the peeps have painted tape in after hours, for 4 days in a row to the upside, and you can get hot and heavy about todays total expected smash, but this is huge huge big news, indicating to at lease one, the shorts are freaking dead meat.

That is all. SS out. 

Texas Sandman's picture

"increase or decrease monthly money printing"


"We have absolutely no idea what we're doing or whether what we've done has done any good at all.  So, we're going to do either more or less of it.  We don't know."

Boswell's picture

@ Animal Sacrifice...

We may need your "expertise" one of these days!? ;-?

I found this on pg5 of that BIS Mark Carney Speech PDF...


"A central bank agenda for renewed globalization

But how to do so, when animal spirits are so clearly moribund?"

AlexCojones's picture

Jim Willie's Words - Dave Dees Graphics - Late Night Viewing

  " The United States has pushed itself into a corner with a monetary straitjacket, a criminal banker elite class in charge, and a systemic failure that approaches rapidly. . .

   The harsh police state will be the outcome from refusal to liquidate the big US banks . "                  - Jim Willie :  The Gold Climax Event


SilverSurfers's picture


well, close to sign off time in Ca, so leave you all with a precious thought.

Do you think turd would like to force Dimon and Bythe on the stand, for just a few minutes each, and just squeeze em hard, wow, what a dream. Just Asking.

Dr. Willy and the California Esquire seem to be on the page.

I will differ, placing bets on Mankind to avoid that outcome.

bronsuchecki's picture


Strawboss: “defined a falling level of inventory in GLD as being in level 4 (the worst), implying that it signals a severe lack of trust on the part of investors to have their gold held by a counterparty. Would like to hear your thoughts on the recent GLD drawdown and what it means in terms of "trust in the system".”

Those phases were just a theory so I’m not saying it will play out that way, however, the phase 4 I suggested included ETFs balances declining AND persistent backwardation and at longer maturities. As we only have backwardation in the near contract, I’d say we are still in 2nd phase maybe moving to 3rd.

When I hear of 99.99% purity 400oz bars in London attracting a small premium, which is very unusual, then it tells me we are in a very interesting market situation. I would note that I’m not hearing that the bullion banks paying a premium to get 99.99% purity 400oz bars, so it is not a real squeeze yet.

TF: “Though your questions strike me as disingenuous”

I don’t play games, everything I do is straight up.

TF: “The reason I use "inventory" is the misleading assumption placed by others in the media and financial services that the gold "owned" by the fund is actually the sharholder's. Meaning, who owns the GLD's gold? From where did it come? From whom is it leased/loaned/hypothecated/rehypotecated etc?”

How the metal in the ETFs was sourced does not affect the ETF Trust’s title to it - the metal in ETFs is not encumbered. I address that idea here http://goldchat.blogspot.com.au/2010/08/gld-leasing-and-encumbrances.html

TF: “The scam of it all is the very misleading assumption that every ounce in the world is 1:1...that every "owner" of an ounce is the only person/entity with a claim on that ounce. This is why I use the terms "alleged" and "inventory". You, of all people, know that this is how the current, fractional reserve bullion banking system works, yet you come here and set up this simple, straw man A/B argument in an attempt to accomplish what?”

The metal in the ETFs is allocated, not unallocated. Unallocated is fractional, not allocated. As specific bar numbered allocated metal is not leased (as per my link above), then leasing/hypothecating does not give allocated multiple claims.

For allocated to have multiple claims requires the custodian to fraudulently give the same bar number to multiple people. No doubt you consider that a reasonable possibility. I consider it unlikely. Why? Because why would a bank engage in a straightforward case of criminal fraud/stealing which requires a large number of employees to be complicit in (vault staff, internal auditor, external auditors, risk & compliance department, traders) and thus have a high chance of being found out when that bank can engage in far more profitable manipulations of a virtual financial engineering nature where there is sufficient vagueness as to valuation and risk of the financial instrument that can be debated with auditors and accountants and thus give room for excuses for the few traders involved?

Consider the recent ABN Amro story which I blogged on here http://goldchat.blogspot.com.au/2013/04/chill-out-dudes.html  which many think is a case of default on allocated gold. Sorry, not true, as when you read the conditions of those accounts and on page 6, section 4.3 it is clear it was an unallocated account. That is how the game is played. Why worry about having to shift the same bar around for multiple clients when instead you can use shifty wording in an agreement and rely on idiot clients who don’t read what they are signing?

Tabberto: “but you clearly doubt the manipulation/JPM meme”

I believe in manipulation but not suppression. One is short term, the other long term. Many of the manipulation and suppression theories are simplistic comic book stuff. Often why people consider me anti-manipulation is because I critique these theories. Doesn’t mean I don’t believe others, like this http://goldchat.blogspot.com.au/2009/06/death-of-gold.html : “To kill gold you don't manipulate its price, you manipulate its volatility.”

Tabberto: “Am baffled as to why you would frequent such an establishment as this if that is your view”

I have TF’s posts in my RSS feed, but don’t follow the individual comments as I’ve got a couple of hundred RSS feed to scan through each day. However, people often email me about specific comments which is how I find out about them.

Tabberto: “high-horsing over specific language while ignoring elephants in the room dilutes valid contributions, we may all be guilty of this but I felt I would point it out (as exemplified by your nitpicking over language both with Turd and Maguire previously).”

I nitpick because if ones starting point or fact is wrong, then the whole conclusion can be wrong. Getting the details right is important. The ABN Amro story is a good example. Because few have bothered the research the story it is now accepted by many as a case of allocated default. What that has done is just missed the real story of default on unallocated obligation to deliver physical (indicating fractional backing) and educating people on checking the terms of their storage agreements.

Tabberto: “Do you think that the investigation into Silver manipulation by the CFTC is still 'ongoing' only because despite there being no evidence someone forgot to advise the public? Do you think it is beyond the CFTC to understand the subject?”

I consider it completely ridiculous that it has taken this long and that makes the whole affair suspicious IMO.

Tabberto: “Do you think Bart Chilton of the CFTC is imagining things when he says its happening, or maybe he wants to be loved by the Goldbug crowd?”

Consider that the CFTC has to deal/manage/politic two types of market participants – producers, who want prices to be high and consumers, who want prices to be low. I have seen the theory that Bart’s role is to play to or appease the consumers, which in the case of PMs means they want high prices. I really don’t know if this is the case or he is just straight up. Either way he is often very careful in what he says, and keep in mind the difference between manipulation and suppression. Bart talks of manipulation, not suppression.

Tabberto: “Do you recognise that placing and then immediately pulling 'fake' trades on a non-collating platform as a market signal would constitute market abuse or manipulation?”

Yep. Manipulation is a continuum with differing views on what constitutes unlawful or unethical behaviour. Traders I’ve spoken to see most of it as just part of the “game”, like a boxing match to see who is stronger. I tend more towards the ethical end but not naïve to think that you can walk in and put all your (price) cards on the table and not get screwed.

Tabberto: “Do you feel there is any issue with price discovery overall in Precious Metals?”

Not generally. Then again, Perth Mint has never traded on COMEX. We shop around each week to find the highest bidder for the 5 to 6 tonnes of gold we refine, which mostly goes into Asia. If a bullion bank want a few $100 million of gold, they have to pay up. Can't get any more free market/brutal price discovery than that.

Tabberto: “Do you think that the London Gold Pool did actually exist in the 1960s and if it did why on earth would it not be operational now when it is needed more than ever?”

Yes it existed but that is ancient history – we were on a gold standard then and that was just what is now called FX and reserves management. I think the central banks these days are no so aligned in their interests that they would be willing to co-ordinate on gold, the game now is the value of your fiat vs other country’s fiat.

Tabberto: “Do you think the huge volumes in short timeframes on COMEX are pure and natural stop-tripping long-puking or do you believe that there is collusive shorting taking place that helps turn a sell-off into a waterfall??”

No it is suspicious and regulators should be looking into that as it is not rational selling behaviour, unless you are trying to hunt for stops, which is “trading” as discussed above.

Tabberto: “Do you consider the ETFS joint-custodying and then mixing bars up at HSBC (we all know that GLD/SPDR and ETFS were co-mingled as it was proven through Pythonesque means) to be a problem or maybe a good thing?”

I don’t think many vaults these days operate on a physical segregation “cage” type basis for numbered bars. It is just not practical and provides no additional safeguards. If there is a pallet with 32 x 400oz individually numbered bars on it then you know from your computer records which person owns which bar and you can pull that bar out at any time. How does putting each bar on 32 pallets or in boxes and recording in the computer that bar #1 in box #1 belongs to client A and bar #2 in box #2 belongs to client B etc make it any more “allocated” than recording in the computer that bar #1 on pallet #1 belongs to client A and bar #2 on pallet #1 belongs to client B etc? It doesn’t.

But that sort of physical segregation makes running the vault a lot more complicated and take up a lot more space, increasing storage costs without any increase in allocation-ness.

Tabberto: “are you happy with open pallets a la SPDR as the correct way to custody Gold in light of the above? A Genuine query of someone who should know about good practice.”

See comments above. That is how all vaults are operated. Are you saying the pallets should be covered up somehow? What exactly is the problem you have with this way of storing?

victori: “Your Conclusion: "That tells me there isn't any stress in the wholesale markets." Versus Jeff Clark's conclusion: "...You should know that supply among wholesalers is as every bit as tight as the retail side..." How do you explain this differing conclusion between you and Jeff Clark?”

Jeff Clark was talking about wholesalers dealing in 1oz and other retail forms. I’m talking about wholesale forms and quantities, that is, 1 tonne lots of gold kilo bars or 400oz bars.

Chi-Town Deadhead's picture

Posted on FOMC Wednesday @ Gold Dog & LCS Update

Gold Dog,

Where in Chi-Town are you?  If you want to PM that's fine.  In response to your local Po-Po comment, I know a number of local officers and a few Feds that told me 2 years ago that the next handgun I bought should be a 40 cal since they were all switching to them.  Within a week I found a great sale on an Springfield MDX .40.  It is a wonderful weapon and have had no issues with it. 

Stopped in at my LCS to see what they had.  They had ASE's but at $30.00 per for a tube of 20.  I could have ordered ASE's at $2.50 over spot for a minimum order of 100 but it would be when he could confirm the order.  10 oz. bars due in later this week but at a $5.00 per oz. premium.  Half a tube of maples and a higher premium than ASE's.

I picked up a brand new 2013 AGE which he had just received a tube of this morning and 2 Bison's to complete my sets at a hefty mark up compared to before the smack down. However, a 30% less mark up than any "joe" off the street. More than I would have liked but still, they were in my hands until those damn silver and gold sniffing Rottweilers cornered me again and stole it all.

Oh well, back to the grind to try again and stack.

Forgot to add that the AGE was 4.75% over spot.  Right now against the other LCS's that is pretty damn good.

Just A Regular Guy's picture


Nice replies!

I was wondering whether I could convert PMGOLD:ASX and buy from Perth Mint in the same order? By that I mean, would it be to much of a hassle to merge the two things into the one package to save shipping etc.? If I can merge is it as simple as a phone-call and/or e-mail?


bronsuchecki's picture

@Just A Regular Guy

The PMGOLD physical redemption option was primarily designed as a backup in case the ASX stopped trading so that holders would not be trapped (no other ETF has that safeguard or limit redemptions to large quantities). As a result the backend process was not set up for high volume of transactions or to be integrated with online/phone sales. PMGOLD was not meant to be a way to buy coins - it is cheaper and quicker to do that directly.

So sorry, not possible to merge the two shipments - two different computer systems and two different admin processes.

bronsuchecki's picture

@Just A Regular Guy

double post

Tabberto's picture


Thanks Bron, good for you replying extensively.

Re pallets I ask because CEF use double-caging on their bars and RFID chips attached too, accept it is a different 'vehicle' though with possibly less need for moving metal about.  Either way the SPDR/ETFS debacle showed that the HSBC custodial method in London is dubious at best and two ETFs using the same custodian in the same place which also happens to be the wild west.  I laugh about how they still havent tried to explain that shower of a performance on CNBC.

HSBC en suisse told a big hedge fund manager I know on Monday that he cant remove his kilo bars - effectively capital controls - maximum withdrawal is $100,000 of cash or physical metal.  Apparently they would deliver to another LBMA member bank though (lol) where no doubt he will get the same chat a month down the line....yet another anecdotal straw for the camel.  The idea that Banks now treat cash and ALLOCATED gold the same way is proper twilight zone stuff - has interesting implications in my view.

I don't agree with your assessment of the London gold pool - it wasn't a Gold Standard then but rather the disappearing vestiges of such, and the rationale to intervene to make paper look better than it otherwise would has dramatically increased alongside global money supply - takes 2 to make a market though!  Thank you for your replies.  No doubt you saw Sandeeps update - the Basis is telling the real story

Adolf_Hitler's picture


1. You wrote "The metal in the ETFs is allocated, not unallocated."

No. If you read the prospectus of GLD, you will find the following paragraph 

"The Custodian will use commercially reasonable efforts to complete the transfer of gold to the Trust Allocated Account prior to the time by which the Trustee is to credit the Basket to the Authorized Participant’s DTC account; if, however, such transfers have not been completed by such time, the number of Baskets ordered will be delivered against receipt of the gold deposit amount in the Trust Unallocated Account, and all Shareholders will be exposed to the risks of unallocated gold to the extent of that gold deposit amount until the Custodian completes the allocation process"

Therefore GLD may have unallocated gold.

2. You also wrote "The ABN Amro story is a good example. Because few have bothered the research the story it is now accepted by many as a case of allocated default. What that has done is just missed the real story of default on unallocated obligation"

You had better read the HUMAN translation of the following link:


It seems that the cease of physical delivery is not restricted to the ABN Amro GIRO account, the unallocated account you mentioned. Other types of accounts are also included.

bronsuchecki's picture

@ Tabberto

I don't see anything dubious about the custodial method. That visit was a PR stunt and it seems likely to me that the PR person running it did not think to (or aware of the need to) stop Bob and wait to check which pallet had GLD bars on it. So he picks up bars from an ETFS pallet. Big deal.

I assume you big hedge fund manager is allowed to physically audit his metal? I suggest instead of taking the metal he just asks for an inspection and then proceeds to use a marker pen to  initial each bar. That will flush out very quickly if it is real allocated.

And yes I receive Sandeep's basis reports.

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