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.