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New Record For GLD Gold Holdings (+5 Tonnes); Gold On Its Way To Validate Goldman's $1,400/Oz Prediction

Tyler Durden's picture


On June 17, we wondered whether the "parabolic blow off in gold accumulation by ETFs is about to cause a gold price explosion?" Sure enough, yesterday, Goldman Sachs came out with a bullish report on gold in which the firm stated that should gold purchasing by ETFs continue at the recent pace, then gold at $1,400 is a virtual certainty. A quick look at the closing NAV in the gold holdings of GLD, as a proxy of the broader Gold ETF community, indicates that $1,400 - here we come. Just overnight, GLD added another 5.2 tonnes of gold, bringing its new total to a fresh all time high of 1,313.13 tonnes, a whopping 76 tonnes higher than a month ago. As the indexed chart below demonstrates, what we thought could become a positive feedback loop whereby non-physical ETFs scramble to at least catch up to a par NAV, is already in process: the ETF accumulation by GLD, which is now the 6th largest gold-owning entity in the world, has become a self-fulfilling prophecy. If the ETF is indeed purchasing said gold in the open market, there is no way this would not be moving the price much higher, absent massive synthetic shorting by the LBMA. Yet at some point, internal risk controls at even a firm with infinite margin like JPMorgan will take over, and force the bank to cover its record short exposure. When that happens, the already disclosed demand by entities such as ETFs and Central Banks, will catch up with the most manipulated and distorted supply curve in the history of economics.


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Tue, 06/22/2010 - 17:28 | Link to Comment homersimpson
homersimpson's picture

May JPMorgan take a golden shower from the ever-increasing gold price.

Tue, 06/22/2010 - 17:45 | Link to Comment Turd Ferguson
Turd Ferguson's picture

Gold: "the most manipulated and distorted supply curve in the history of economics."

The understatement of the day. Too bad its too long to fit on a t-shirt.

Tue, 06/22/2010 - 20:56 | Link to Comment Arius
Arius's picture

hey here is a solution: JPM might get the rights to the 10 trillions discovered in Tora fast people forgot about these reserves?

Wed, 06/23/2010 - 05:41 | Link to Comment Quinvarius
Quinvarius's picture

It won't be worth 10 dollar trillion until next year.  Right now it is still 1 trillion.

Wed, 06/23/2010 - 06:27 | Link to Comment goldfreak
goldfreak's picture

but we have trolls to remind us

Tue, 06/22/2010 - 17:30 | Link to Comment Hansel
Hansel's picture

They must have a great supplier to be able to buy all that physical gold, and a big warehouse to store it all.

Tue, 06/22/2010 - 17:48 | Link to Comment tmosley
tmosley's picture

1000 tons of gold would fit easily into a large-ish bank vault.  It's quite dense, you see.

51.81 cubic meters, to be precise.

I'm with you on the supplier issue, though.

Tue, 06/22/2010 - 18:16 | Link to Comment Sabremesh
Sabremesh's picture

Just so people can visualise this, 51.81 cubic metres is a cube with sides of just 3.73 metres (that's just over 12 x 12 x 12 ft for you diehard imperialists)

Tue, 06/22/2010 - 21:52 | Link to Comment Iam_Silverman
Iam_Silverman's picture

Sooooo, that's about the size of 2-1/2 cords of wood?

(one cord of wood is 4'X4'X8').

For those hicks out there, like me.

Wed, 06/23/2010 - 00:51 | Link to Comment hamurobby
hamurobby's picture

Thad be 2 and a half truckloads here in Florida, better bring a dually for the yeller metal though  :-)

Tue, 06/22/2010 - 19:28 | Link to Comment JLee2027
JLee2027's picture

Central Bank leasing, and when push comes to shove, poof the Gold will stay at the Central Bank.

Tue, 06/22/2010 - 18:09 | Link to Comment Monkey Craig
Monkey Craig's picture

it's pretty easy to store paper gold....just add another 0

Tue, 06/22/2010 - 18:09 | Link to Comment Monkey Craig
Monkey Craig's picture

it's pretty easy to store paper gold....just add another 0

Tue, 06/22/2010 - 17:30 | Link to Comment unwashedmass
unwashedmass's picture


rolling with laughter...ah, if only they took delivery of 5.2 ACTUAL REAL GOLD.....

as it is, much does the paper weigh here? 5.2 tons worth of futures contracts....worthless futures contracts...

how much do we think it weighs?

Tue, 06/22/2010 - 18:02 | Link to Comment Vendetta
Vendetta's picture

there is so much paper it weighs as much as a lot of physical gold

Tue, 06/22/2010 - 19:00 | Link to Comment knukles
knukles's picture

It don't weigh anything.  Paper gold?  It's all naughts and ones on a computer somewhere.  

Tue, 06/22/2010 - 20:34 | Link to Comment UncleFester
UncleFester's picture

Eventhough the electron rest mass is 9e-31 kg, you are correct...the naughts and ones don't weigh anything.  There is storage somewhere on someone's hard drive, it just won't weigh more when the numbers change.

Wed, 06/23/2010 - 06:29 | Link to Comment goldfreak
goldfreak's picture

what weighs more a ton of gold or a ton of futures issued on one ounce of gold?

Tue, 06/22/2010 - 17:32 | Link to Comment unwashedmass
unwashedmass's picture


by the way, why would JPM need to cover? they own the CTFC....and Ben is floating them free cash...

so why do they need to cover, ever?

Tue, 06/22/2010 - 19:16 | Link to Comment knukles
knukles's picture

Maybe Ben is not floating them free cash.  Maybe the account through which this is being effected is indeed a hedge account of the Fed or Treasury which JPM (or whoever) simply transacts on behalf of, thus not impacting their own balance sheets or P&L's. 


Tue, 06/22/2010 - 20:00 | Link to Comment unwashedmass
unwashedmass's picture


frankly given the level of corruption necessary to keep the markets high and the peasants oblivious, i wouldn't be surprised.

not a bit.

Tue, 06/22/2010 - 17:36 | Link to Comment BumpSkool
BumpSkool's picture

wake up peeps... JPM is NOT short physical ... they are short OTC derivs - sold to the ETFs through a stand alone entity that has NO parent guarentee 

Tue, 06/22/2010 - 17:40 | Link to Comment A Man without Q...
A Man without Qualities's picture

and The Fed is on the other side of the trade...

Tue, 06/22/2010 - 17:46 | Link to Comment I need more asshats
I need more asshats's picture

When the time is right the short side of this blow-off top is going to be EPIC.

Up like an escalator, down like a over-weighted elevator.

Tue, 06/22/2010 - 17:58 | Link to Comment Bam_Man
Bam_Man's picture

It will look very much like the Nov. 1979-Jan. 1980 moonshot, the only difference being it won't be a "blowoff top" this time.

Tue, 06/22/2010 - 21:39 | Link to Comment long_and_short
long_and_short's picture


whatever happened to GS being wrong on their calls

FX etc., as soon as its gold they are golden.  turn your heads and hang on to your nut sack

Tue, 06/22/2010 - 21:39 | Link to Comment long_and_short
long_and_short's picture


whatever happened to GS being wrong on their calls

FX etc., as soon as its gold they are golden.  turn your heads and hang on to your nut sack

Tue, 06/22/2010 - 17:36 | Link to Comment Locodonkey
Locodonkey's picture

These firms have risk control policies. Oh you mean the taxpayer?

Tue, 06/22/2010 - 17:36 | Link to Comment Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I'd be more excited if Sprott were the one adding 5.2 tonnes to their pile, since they do actually hold the real thing.

Tue, 06/22/2010 - 20:17 | Link to Comment oddjob
oddjob's picture

Central Gold Trust is adding 7 tonnes.John Embry(Of Sprott) is a trustee and owns a few hundred thousand units himself.

Tue, 06/22/2010 - 17:37 | Link to Comment jesusfreakinco
jesusfreakinco's picture


Where do you get these NAV figures for GLD?  How doyou know these aren't paper purchases and are actually physical purchases?


Tue, 06/22/2010 - 17:46 | Link to Comment BumpSkool
BumpSkool's picture

You don't! That's the "beauty" of an ETF!!

Tue, 06/22/2010 - 20:10 | Link to Comment Hephasteus
Hephasteus's picture

Plus when you read the fine print. They pretty much say you'll never know and you'll have no way to hold them accountable for anything. It's like the evolvement of the EULA in software to the pinnacle of making people devoid of any right NOT TO BE SCREWED.

ETF's are the ultimate sucker learning experience.

Tue, 06/22/2010 - 20:42 | Link to Comment Implicit simplicit
Implicit simplicit's picture

"Redemption orders are subject to postponement, suspension or rejection by the Trustee" That is from GLD's prospectus

Also from their web site

"Because the expenses of the Trust will be offset by the sale of Trust gold, the amount of gold backing each share (Ounces Per Share) will decrease gradually.

Each share will initially represent 1/10th of one ounce of gold, but this will decline over time. This reduction in ounces per share will be reflected in the NAV of the Trust."

Tue, 06/22/2010 - 17:38 | Link to Comment truont
truont's picture

The price of gold severely lags the supposed increase in GLD holdings.  This is because GLD is reporting paper gold in its holdings (derivatives, futures, options).  If GLD were buying spot gold and transferring the bars in its main vault, then the price of gold would more closely track the gold holdings in GLD.

The reason the price of gold is rising is because of the physical gold bullion rush in Europe.  You can fool the Germans once with currency debasement, but not twice.  Germans are leading the Europeans in diversifying their euro holdings into foreign currencies and gold.

Tue, 06/22/2010 - 17:45 | Link to Comment unwashedmass
unwashedmass's picture


oh, you are so, so right. you have to love that Merkel tore Obama a new one today. she can't destroy her currency, not and have a career, she's leaving Ben and O swinging in the wind.....good luck boys.....Germany is not going to participate with endless Euro printing.

i think we see the Deutschmark come back before we see the Germans agree to just allow Jean Claude to enter the printing press races with Bennie Boy.

Tue, 06/22/2010 - 18:00 | Link to Comment I need more asshats
I need more asshats's picture

And through the years the people of India have exchange Rupees for physical gold. Wedding gifts, dowry, exchange for black money, etc... They literally sew it into their clothes when they travel to prevent theft.

Who is selling now? Americans are deep in paper debt exchanged for worthless items from Circuit City, Re-Max, and GM.

Let's keep an eye on India, OK team?

Tue, 06/22/2010 - 17:42 | Link to Comment Amish Hacker
Amish Hacker's picture

First notice day coming up. It will be interesting to see how many Comex players announce their intention to stand for delivery. If not this week, then someday soon, it will become obvious to everyone that there is way too much paper chasing way too little physical gold. Then we will see how well Jeff Christian's "cash settlement" theories work out.

Tue, 06/22/2010 - 17:42 | Link to Comment Turd Ferguson
Tue, 06/22/2010 - 21:48 | Link to Comment daneskold
daneskold's picture

I love graphs such as that.  It demonstrates the ludicrous lie that gold is an inflation hedge.  If gold were an inflation hedge, there would be no need to adjust the price for inflation to show that gold has a long way yet to run....adjusted for inflation.

Tue, 06/22/2010 - 17:43 | Link to Comment Charley
Charley's picture

Thie dollar price of gold is not relevant here, since the dollars in which gold price is denominated are worthless. If gold rose to $10 billion this dollar price would not even begin to express the value of gold in dollars. Dollars have zero value!

What is relevant is the measure of real output by the nominal price of an ounce of gold. Once you do that calculation, it becomes obvious that higher gold prices are only the inverse expression of the continuing contraction of economic activity.

As long as the economy continues to contract the dollar price of an ounce of gold will rise.

Tue, 06/22/2010 - 20:35 | Link to Comment Implicit simplicit
Implicit simplicit's picture

True that. The dollar is worthless but perception being deluded reality has the investor red ants confused as they scurry about carrying the dollar over the euro and others to take it back to the nest hole for safety. When they discover that their dollar feast is just a hollow exoskeleton with no nourishing value, the masses of red ants will climb over each other for the golden calf carcus.

Tue, 06/22/2010 - 22:06 | Link to Comment Iam_Silverman
Iam_Silverman's picture

Uhmmm, the dollar really isn't "worthless", it's just worth less (when compared to gold).

I can still exchange dollar denominated FRN's for gold, and canned goods, and ammo, and reloading supplies, etc.

Tue, 06/22/2010 - 17:51 | Link to Comment BlackDouglas
BlackDouglas's picture


I've never had anything but a bank account and about to move into goldmoney. Can anyone tell me when the next gold option expiry date is as that seems to me to be a good time to buy as the price is deflated, right..

Tue, 06/22/2010 - 17:58 | Link to Comment unwashedmass
unwashedmass's picture


expiry is thursday....the Comex closes at 1:30. I usually start buying at about 1.29.....

you might try, they are straight shooters and won't ram you on the premiums. also they have always, always come thru and delivered, which is not the case with some others.

Oh, and you won't ever get a hard sell from salesperson about why you should leave it with them for "safe storage" at a "reasonable fee"....

with APMEX, you order ya gold, ya get ya gold at the price you bought at ... in my experience. don't know what other people have found.

Tue, 06/22/2010 - 18:53 | Link to Comment AVP
AVP's picture


I think your *spot on* on your assesment of

Tue, 06/22/2010 - 20:58 | Link to Comment Pope Clement
Pope Clement's picture

Ditto on that observation unwashed and apmex takes credit cards too - what a deal...

Tue, 06/22/2010 - 21:20 | Link to Comment nmewn
nmewn's picture

Thursday the 24th.

For me...I pay cash and do it locally.

Only my hairdresser knows for sure ;-)

Tue, 06/22/2010 - 22:36 | Link to Comment Iam_Silverman
Iam_Silverman's picture

I hear ya'!

How will next year effect us?  The new requirement for 1099's to be submitted for any cash transaction above X dollars?  I have to buy in lots greater than $1,000 to avoid paying taxes here in Texas.  Kinda seems silly, doesn't it?  To me, it's like getting change for a dollar.  I give them FRN's and they give me coins.  Why would that transaction (less than $1k) need to have sales tax added?

Tue, 06/22/2010 - 17:55 | Link to Comment teaddy bearish
teaddy bearish's picture

am i the only one who expected a sharp decline in the price off gold (temporary correction)

i hope it will decline a lot so i can increase my holding at discount price


Tue, 06/22/2010 - 18:00 | Link to Comment Lucky Guesst
Lucky Guesst's picture

Hey Satan....... will you hold my gold bars for me?

"Lord Rothschild fund joins World Gold Council to put £12.5m into BullionVault"

Tue, 06/22/2010 - 19:15 | Link to Comment Hephasteus
Tue, 06/22/2010 - 18:04 | Link to Comment unwashedmass
unwashedmass's picture


the majority of the calls are clustered at the 1230 mark, so you should expect the cartel to ram the price down there between now and thursday and hold it under. there's another cluster down at the 1200 level, but....

as the manipulations are now widely known and followed almost tick by tick by the gold traders, who knows if the cartel will be arrogant enough to try for it. if so, this could be the last they don't care about regulators now, it would be a machine gun drop.....

thing is, when this explodes and the blame starts flying freely, a drop to 1200 in the current environment, particularly a drop known far and wide as expiry manipulation might create more publicity and ammo for the peasantry than the cartel would care to create.

keep in mind, a dramatic skyrocket off the 1199 mark at 1:30 thursday would get a lot of very unwanted the US.....and around the world where it is just beginning to penetrate the mass mind about how corrupt our markets are.

ultimately, while they would benefit by expiring virtually all calls as worthless, they would be writing the obituary for the Comex. so, it will pay to watch closely and see what they choose to do.

Tue, 06/22/2010 - 18:06 | Link to Comment BlackDouglas
BlackDouglas's picture

Right thanks @ unwashed. Sorry, you say you start buying one minute before closing? Does that mean you are buying only for a minute? And not being in the US I guess I need to get my time right. That´s 1.30pm East Coast, right?

Tue, 06/22/2010 - 18:11 | Link to Comment unwashedmass
unwashedmass's picture

its east coast time, and i'm buying physical from vendors who key off the Comex spot price.....



Tue, 06/22/2010 - 18:12 | Link to Comment Eric Cartman
Eric Cartman's picture

lol and all you guys hate GLD, question its gold backing but benefit when it increases the spot price of gold. 

Tue, 06/22/2010 - 18:17 | Link to Comment unwashedmass
unwashedmass's picture


actually, if you really understood the mechanics of the market, you'd know that GLD is a mechanism to divert demand away from physical (where supply is tighter than a tick).....placate the peasantry with the idea that they own gold.....and keep the gold price in line with this diversion.....

suppose all these investors who are buying GLD suddenly moved into physical????? there isn't enough physical to satisfy the demand at current prices....

and as we found out at the CTFC hearings, GLD is paper gold -- and in the paper markets, there is one ounce of gold to every 100 ounces of promissory paper.

makes you really happy about buying GLD....cause its "real" gold....rolling.



Tue, 06/22/2010 - 18:20 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Wrong. GLD has siphoned off money from flowing into the real metal and has absolutely killed the money going into the miners. Pure bullshit Eric. People holding GLD are the bagholders.

Tue, 06/22/2010 - 18:25 | Link to Comment unwashedmass
unwashedmass's picture

you're absolutely right, BOP, some of the miners, my god, the earnings are outrageous, the P/Es are stunners.....

but, no one looks that far into the sector. the cartel has done a dynamite job of marketing GLD as the real thing.....which it isn't.

Sat, 06/26/2010 - 23:18 | Link to Comment Eric Cartman
Eric Cartman's picture

Dude if it wasn't for GLD investors would still be buying Citi shares. GLD is like a free advertisement for you guys and all you do is bitch about it. Shut the fuck up before I kick you in the nuts.

Tue, 06/22/2010 - 18:35 | Link to Comment Sabremesh
Sabremesh's picture

"Wakey, wakey, Eric", as John Cleese might say. The point is that "increases" in GLD inventory don't have any effect on the spot price, because no gold is actually purchased. The only effect it has on the spot price is the news that GLD has increased its holdings, but even that is muted because smart people completely ignore it. 

Tue, 06/22/2010 - 19:23 | Link to Comment Hephasteus
Hephasteus's picture

Hey your right. And the mortgage companies holding on to dead houses is benifiting home buyers who might be paying to little for housing. Just like the gld ETF's are giving people the joy of gold ownership without the terrible dynamics of ACTUAL supply and demand.

Logic. Learn it, Use it, Love it.


Tue, 06/22/2010 - 18:13 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Despite so MANY calls for YEARS to see the gold itself (GLD, Ft. Knox, under the NYFed, LBMA), they never let us see it!

Gordon and Chumba have been right ever since I came here to ZH: buy physical gold now!  And as much as you reasonably can.

Ag, Pt and guns & ammo (and other survival stuff if so inclined) all are OK as well.  But, the big money should be in GOLD!

Tue, 06/22/2010 - 18:40 | Link to Comment The 22nd Prime
The 22nd Prime's picture

I agree with DoChen...I got out of the compounded interest savings game 10 years ago. Spent 2k in 2K for eight little pieces. Been building a metal portfolio consistently for 10 years.

In 1980, I was 23 and my dad, stock broker, sold off 100 Kruggers when it went hyper. I went with him when he sold them. Coins that he bought just prior to Nixon's little stunt.

Personally, I think I'm going to get to do the same in the not too distant future.

The gig is up, folks.



Tue, 06/22/2010 - 18:13 | Link to Comment unwashedmass
unwashedmass's picture


that's physical for delivery only. you should NOT, EVER agree to allocated accounts or "storage".....get it in your hands....

in the past there have been operations that sold the "stored" gold three and four times over.....and surprise, surprise, when people wanted delivery...three out of four were shit outa luck....

Tue, 06/22/2010 - 18:36 | Link to Comment BlackDouglas
BlackDouglas's picture

If you have physical gold and a new gold-backed currency is established will you not get taxed to the hilt when you try to sell it into the market?

I´m trying to work out if offshore goldmoney or physical is best..

Tue, 06/22/2010 - 18:39 | Link to Comment Calculated_Risk
Calculated_Risk's picture




Settle for nothing less.


Tue, 06/22/2010 - 19:50 | Link to Comment Screwloose
Screwloose's picture


Your name might suggest you're a Scot in the UK?

If so; look at Sovereigns and the CGT advantages of "legal tender."  They're in short supply at the mo; but shop around.

Buy them; hide them - and tell nobody.

Tue, 06/22/2010 - 22:47 | Link to Comment living on the edge
living on the edge's picture


I have done both. I own physical gold and silver in my possession and I have a GoldMoney account. It allows you to diversify your holdings and I think of GM as just another place to hide my PM's. I chose an 80/20 split, silver/gold for my GM account. I find silver cumbersome to have in my own possession hence my decision to favor silver with GM. I have 90/10 split gold/silver in my possession, very easy to hide and store the gold but I also like having some silver at hand in case I need smaller denominations for various reasons. 

Tue, 06/22/2010 - 18:37 | Link to Comment DavidPierre
DavidPierre's picture

 Steny Hoyer will announce today that the House will not pass a budget this year.

I agree whole heartedly and would add ...why bother?

 With elections coming up the incumbents surely can't vote on a budget that could be $2 Trillion or more in the hole! Even this number is a joke because of all the "off budget" items.

In the past, the Afghan and Iraq wars have been off budget, Fannie and Freddie's follies which will surely take a big budget bite down the road

(they haven't even presented numbers for 5 years),

Social Security, healthcare etc. etc. are all "off budget" and apparently don't count until they count.

Trust me, the day is rapidly coming when they will "count" and thus their services will cease.

Why even bother on a budget that would have been bullshit anyway!

These lawmakers could spend their time on more worthwhile frauds than actually coming up with a budget. And THIS from the country that provides the foundation for the world's monetary system!

Actually the States could learn a fine lesson from Washington and just refuse to issue budgets and then everyone could go on about their business unmolested.

For that matter the banks could learn a the same lesson and refuse annual audits, they could just issue a statement each year to appease lenders, stockholders, and even depositors something along the lines of "baseball been bery bery gud to me"!

Think about it, would you put money in a bank that refused auditors access to their books for some 50+ years (Ft. Knox)?

Would you lend money to anyone that owed 6 or 7 times their annual earnings or couldn't even issue an audited earnings statement for 5+ years?

Would you help restructure a failing company that said "just lend us the money and we'll get a business plan to you sometime next year"?

Of course not but... YOU DO EVERY DAY!

Do you own any U.S. government bonds? Have money in any US FDIC insured bank? Did you spend a few Dollars over the course of the day today? ...News are a creditor of a bankrupt institution! Your savings are false! Best of all, you actually got a good or service today and paid for it with NOTHING!!!

How about foreign Central Banks? Ohhh...they are stuffed to the gills with reserves, Dollar reserves that is.

So in reality these banks are empty black holes too but we can talk about that another day. I do feel much better today though, Moody's (you know, the gang that set the dogs loose on Greece last year) says the Spanish banks are in great shape and have already reserved more than 75% of their losses to their loan portfolio.

Come on now give me a break, it was only 6-8 weeks ago that we were hearing they had reserved less than 25% and had MANY loans had not been marked to market EVER!

This is no longer a shell game, juggling act, "fudging the numbers", spin or even a Ponzi scheme, no no no it is all... BULLSHIT...!

Everything and I do mean everything is based and valued on NOTHING! In fact, everything is based on less than nothing because everything is based on debt.

It is based and valued on a debt that can never ever be repaid.

Of course ZERO is as low as a paper asset can go because bankruptcy courts wipe out the negative values but in reality the entire paper system has an aggregate negative value! Argue this with me if you want but please spend some time thinking about the concept first.

And now for the boring broken record part, Gold and Silver are the only "monies" outside of this "negative value" system.

They cannot bankrupt nor default and the best part is that they will accrue capital while all else bankrupts around them. They have value because they "are".

In fact they "are" the enemy of every Central Bank on Earth which should be reason enough on its own to want them! 

Bill H. @ GATA

Tue, 06/22/2010 - 19:35 | Link to Comment Turd Ferguson
Turd Ferguson's picture



Tue, 06/22/2010 - 21:55 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

+9+infinite zeros...Thanks Bill H @ GATA

What is happening to the world economy is eerily like what is happening in the Gulf Of Mexico...and people are sleepwalking through both debacles.

Wed, 06/23/2010 - 06:15 | Link to Comment SamuelMaverick
SamuelMaverick's picture

New  York State is fully onboard with the ' do not pass a budget ' plan. They do not have the money to pay for all of their obligations, and are short by at least 9 billion.

Tue, 06/22/2010 - 18:40 | Link to Comment BlackDouglas
BlackDouglas's picture

Oh, sorry but new to all this: if the market closes at 1.30pm does that mean that the options expire at 1.30pm? So, after 1.30pm the price suppression normally ends and goes back up?

Tue, 06/22/2010 - 18:59 | Link to Comment Johnny Dangereaux
Johnny Dangereaux's picture

The perennial cheap bastard reminds you that the Silver:Gold ratio should be 15:1......well, that's what they thought in 1792....AND it so happens that that's also the ratio found in the Earth's crust. Go figure--natural law sort of like....

Gold IS for bitches...Silver is for STUDS...who are ready to do some heavy lifting to kill the banking cabal!  I like the 1964 Kennedy 1/2 Dollars.....I can easily find the inflation rate for my lifetime! I go to

Tue, 06/22/2010 - 22:44 | Link to Comment Iam_Silverman
Iam_Silverman's picture

Besides, let's not forget that you use a SILVER bullet to kill werewolves, not GOLD!

Hmm, what do you use gold bullets for, anyway - banksters?

Tue, 06/22/2010 - 19:09 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Hey everybody!  I just bought two trillion tonnes of gold and I am selling shares!  My IPO is tomorrow; just send me a check! 

Bears driving a car:

Tue, 06/22/2010 - 19:33 | Link to Comment The 22nd Prime
The 22nd Prime's picture

Will you accept carbon credits?

Tue, 06/22/2010 - 19:51 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Oh hell yes!  Let us move these mountains!

Tue, 06/22/2010 - 19:33 | Link to Comment AVP
AVP's picture

Count me in for $500 million shares!


Tue, 06/22/2010 - 19:49 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You are on the Ledger!

Tue, 06/22/2010 - 19:57 | Link to Comment Locodonkey
Locodonkey's picture


Tue, 06/22/2010 - 20:00 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And then 100 shares for you, too.  Man this is easy!

Tue, 06/22/2010 - 20:51 | Link to Comment UncleFester
UncleFester's picture

Me and a friend of mine, Lurch, just started Banco de Franco if you need help executing your initial IPO offering.  Our fees are competitive and we only loan out our reserves at a 90:1 ratio.

Tue, 06/22/2010 - 22:13 | Link to Comment AVP
AVP's picture

Oh, that sounds like a bargain to me. As a very large shareholder, I will put a good word into Lord Hendrix!


Tue, 06/22/2010 - 23:05 | Link to Comment Amish Hacker
Amish Hacker's picture

How much will you charge me for storage?

Tue, 06/22/2010 - 19:43 | Link to Comment Testicular Cancer
Testicular Cancer's picture

Good, lower the price. We can buy more of the real thing. GLD may be the best thing that has happened for the "real" gold investor.

Tue, 06/22/2010 - 19:44 | Link to Comment Never_Put_Down
Never_Put_Down's picture

Perhaps the Feds are unloading their physical gold positions, they do, after all, have a record high balance sheet

Tue, 06/22/2010 - 20:36 | Link to Comment jesusfreakinco
jesusfreakinco's picture

Good post:


GLD's NAV is posted daily on its website, corresponding to its reported physucal bullion holdings. Now, I haven't visited the vault myself, but no one other than the custodian and GLD's auditors can know for certain whether the bullion reporting is 100% representative of what's in the vault.

What I do say about GLD and similar vehicles is that the fact that custodian bullion banks are identified as the primary short holders on the COMEX, this raises the question of whether ledger entries are being entered on a portion of physical holdings to back short activity and derivative plays for the bullion bank that have nothing at all to do with the fund in question. In other words, it raises the possibility that holdings become the ammunition these bullion banks require to execute a strategy of price suppression.

Now, unallocated gold certificates are apparently mostly paper and severely leveraged to the point that mass redemptions could explode the entire ponzi scheme, but the ETFs' holdings are stated as allocated holdings with specific serial numbers of bars on their lists. Now, some have looked at those serial number lists and found some oddities, but I can not be certain that this indicates a real problem with the reported holdings.

So while the ETFs may very well have the gold (and/or silver), the key question is whether those holdings remain 100% unencumbered by competing claims, interests, ledger entries, or OTC derivatives written against them. Incidentally, I have the exact same set of questions about the U.S. gold reserves... 1. Are they really there? (perhaps in part); and 2. Are they unencumbered (fat chance!!!)."

Tue, 06/22/2010 - 20:37 | Link to Comment BlackDouglas
BlackDouglas's picture

Is Thursday the options expiration for silver as well?

Tue, 06/22/2010 - 21:50 | Link to Comment Dr. Sandi
Dr. Sandi's picture

A google led to The Daily Paul:

...The next COMEX silver options expiration is June 24 as imissliberty notes. The next COMEX gold options expiration is July 27. As of the Friday, June 18 COMEX report, there were a net of 1,819 more silver call options than put options at a strike price of $19.00 per ounce, which would represent a net demand of more than 9 million ounces of physical silver if excercised. That would be a strong reason to try to push down both gold and silver prices this week, excatly what is occuring as this is being posted.

Tue, 06/22/2010 - 21:35 | Link to Comment Testicular Cancer
Testicular Cancer's picture

I just thought. It would be so easy to buy some GLD, then request delivery. When they cannot, or do not deliver, sue them. This would put the Ponzi out in open court. It has got to profitable for someone to do that. Perhaps an agent of a nation. Perhaps a (financial) terrorist, an economic hitman.

Tue, 06/22/2010 - 21:53 | Link to Comment Dr. Sandi
Dr. Sandi's picture

From what I've read online, all that happens is that if Comex can't deliver physical gold and you're persistent, they will offer to buy you off in cash plus a percentage. I've seen references to a 25% cash bonus for accepting paper in lieu of cash if you're a large-scale client.

Nice scam if your daddy's rich.


Tue, 06/22/2010 - 22:10 | Link to Comment Smu the Wonderhorse
Smu the Wonderhorse's picture

A question that enquiring equines would like to see pursued at ZH:

So, we all seem to agree that a high gold price makes central banks look bad, right?  Now, if GLD is legit -- i.e., actually holds pretty much all the gold they say they do (if that's possible -- I'll leave that for now) -- could our friends at the Fed and Treasury one day decide that, in the interests of economic growth, national security, the integrity of the money supply, the public interest, etc., etc., GLD must liquidate its holdings?  Some argument about evil "speculators," etc. could certainly be conjured up.  What then?  Would the price of gold plummet?  Who thinks that such a scenario is possible?

Tue, 06/22/2010 - 22:25 | Link to Comment AVP
AVP's picture

If your holding physical Au/Ag then none of this matters IMHO.

The price of physical gold would skyrocket under your scenario.

Wed, 06/23/2010 - 03:00 | Link to Comment i.knoknot
i.knoknot's picture


bingo. ingenious, don't you think?

AND the treserve folks wouldn't be doing anything illegal, they'd just tell you that the ETF was dissolved and pay you with freshly printed money at the JPMarket price. who could cry foul? big hedge funds will send investors back their checks if they feel that they can't honor their promised performance.

FDR did NOT confiscate gold in 1933 - he forced Americans to sell it to him at *his* price - which was market-wise 'fair' enough not to piss too many folks off. (i recall nobody was ever convicted of not selling, tho')

i think the real spot price would rocket, but i also could see it manipulated in a downward direction for a while. if they (US treserve) pour enough into the market for a week, the newbies might all panic enough to distort the market for a good while, but... with the BRICs and now Euro-folks buying like madmen, i think the bottom would be found pretty quickly, as JPM can't control the world, although CRIMEX seems pretty well handled these days. that's the bottom i'd like to find.

if spot went down notably, physical holders would certainly not honor the bogus spot price during the adjustment unless they were *really* desperate (hungry...). there would be a LOT of friggin angry 'GLD' holders who just lost their preceived hedge, and i would expect many to liquidate said IRA/401k accounts and buy physical - f--k the tax hit - probably buying back in at much higher 'real' prices.

i recommend said liquidation actions before the GLD fiasco occurs. i say this is a 'when', not an 'if'.

Tue, 06/22/2010 - 22:19 | Link to Comment vonchor
vonchor's picture

howcum y'all like Goldman opinion when it matches yours. I thought that they're always wrong!

Tue, 06/22/2010 - 22:25 | Link to Comment mrgneiss
mrgneiss's picture

Umm, apparently GLD has added about 260 tons of gold since the end of March this year.  That extrapolates into about 40% of total world production for the quarter.  Can someone PLEASE tell me where this gold is coming from, if of the major producers, China is keeping all of their mine supply, Russia is buying most of its mine supply,  US mine supply is constitutionally alloted to coin production, that leaves Australia, Peru and Canada, which together mine about 150 tons per quarter.  Could could someone please tell me where the f... GLD is buying their gold?  Why is it not moving the market more?  Why do PHYS and CEF have problems obtaining smaller amounts?  Or is this just a rhetorical question we all know the answer to?

Tue, 06/22/2010 - 23:21 | Link to Comment Hephasteus
Hephasteus's picture

Ok. I look at it from accounting fraud infiltration perspective. If you historically look at how much inroads accounting fraud has made over the 2000 to 2008 period. I find the above chart very very difficult to believe.

If they are managing 1800 tons a year. That would make scrouning up 260 tons in a little over 2 months a very very tough move.

Here's the blowout timeline of accounting scandals.

Which I'm pretty sure the world gold council will be on by 2011 2012 with a headline. 6 trillion dollar ponzi scheme involving fractional reserve receipts of gold.

Tue, 06/22/2010 - 23:58 | Link to Comment pip
pip's picture

Do they really ever have to cover? Is it like a fail to cover like the naked shorting of stocks where the shorts buy from from a co-conspirator who sells the shares short, and then HE fails to deliver? Round and round they go, and it's "buy-in imminent" forever.

Wed, 06/23/2010 - 05:21 | Link to Comment BlackDouglas
BlackDouglas's picture

Hi, if Thursday is expiration for silver why would gold prices be suppressed down this week too? Is there a point before expiration where suppression is usually intense? Does anyone know where I can find charts of previous suppressions?

Wed, 06/23/2010 - 07:00 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

Yet at some point, internal risk controls at even a firm with infinite margin like JPMorgan will take over, and force the bank to cover its record short exposure. 

Not when you own the goddamn printing press AND are going for broke.

JP Morgan IS the Fed.

Wed, 06/23/2010 - 08:02 | Link to Comment flaxpin
flaxpin's picture

Aggregate value of options = f(price)



























Wed, 06/23/2010 - 20:00 | Link to Comment Hephasteus
Hephasteus's picture

JP Morgan

Morgan Stanley

Credit Suisse

Deutsche Bank

Swiss National Bank

Bank of England

And few other small players IS THE FED.

Do NOT follow this link or you will be banned from the site!