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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homersimpson's picture

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

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.

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?

Quinvarius's picture

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

goldfreak's picture

but we have trolls to remind us

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.

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.

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)

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.

hamurobby's picture

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

JLee2027's picture

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

Monkey Craig's picture

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

Monkey Craig's picture

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

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?

Vendetta's picture

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

knukles's picture

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

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.

goldfreak's picture

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

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?

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. 


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.

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 

A Man without Qualities's picture

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

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.

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.

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

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

Locodonkey's picture

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

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.

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.

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?


BumpSkool's picture

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

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.

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."

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.

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.

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?

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.

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.

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.

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.

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.

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..

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.

AVP's picture


I think your *spot on* on your assesment of

Pope Clement's picture

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

nmewn's picture

Thursday the 24th.

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

Only my hairdresser knows for sure ;-)

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?

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