CME Declares Force Majeure Due To “Operational Limitations” On NYC Gold Depository

Tyler Durden's picture

From GoldCore Gold Bullion

CME Declares Force Majeure Due To “Operational Limitations” On NYC Gold Depository

Today’s AM fix was USD 1,747.25, EUR 1,349.54, and GBP 1,090.46 per ounce. 
Yesterday’s AM fix was USD 1,747.25, EUR 1,347.56, and GBP 1,090.87 per ounce.

Silver is trading at $34.08/oz, €26.41/oz and £21.34/oz. Platinum is trading at $1,620.50/oz, palladium at $666.40/oz and rhodium at $1,065/oz.


Cross Currency Table – (Bloomberg)

Gold edged up $1.30 or 0.07% in New York yesterday and closed at $1,748.40. Silver traded off and recovered climbing to a high of $34.16 and finished with a gain of 0.12%.

Gold moved slightly upward today after Greece’s creditors reached a new bailout deal, which will help fund emergency aid for Athens.

The 34.4 billion euro in aid plus reducing interest rates on the bailout loans expect to cut Greek debt to 124% of GDP.  The interest rates have been dropped to 50 basis points above the interbank rate so countries like Italy and Spain will be lending at a loss.

The Eurozone’s dangerous  but easy policy choice of “extend and pretend” continues which is bullish for gold in the coming months.

Mark Carney has been named as the new governor of the Bank of England by Chancellor George Osborne.

Mr Carney, the governor of the Canadian central bank, will serve for five years and will hold new regulatory powers over banks.

Carney would be considered something of a monetary dove.  The Goldman Sach’s alumni’s appointment means that ultra loose monetary policies will likely continue at the Bank of England leading to weakness in sterling – especially versus gold. 

The US Commodity Futures Trading Commission said that institutions and hedge funds slightly raised their bullish bets on silver and gold futures in the week ending November 20th.

The White House and Republicans are still in a stalemate over the fiscal cliff. The White House press secretary said that President Obama is still waiting for a realistic proposal to look at. 

“President Obama would be open to proposals that closed loopholes or capped deductions,” Carney said, “so long as raising the top tax rate remains on the table.”

Obama has asked for $1.6 trillion in higher revenues to pay down the debt. In the 2011 debt ceiling negotiations, Republicans were considering a plan that would involve only $800 billion in new revenue or half what is needed to avoid the cuts and pay down the deficit. 

“Extend and pretend” will also likely be seen in the U.S. – with obvious ramifications for the medium and long term outlook of the dollar. 

The Chinese Ministry of Industry and Information Technology said that China aims to produce between 420 and 450 tonnes of gold bullion in 2015, up about 25% from 2011, while consumption may reach 1,000 tonnes at that time. 

XAU/EUR Currency, 1 Year – (Bloomberg)

CME Group declared a force majeure at one of its New York precious metals depositories yesterday, run by bullion dealer and major coin dealer Manfra, Tordella and Brooks (MTB), due to “operational limitations” posed by Hurricane Sandy.

MTB has “operational limitations” following Hurricane Sandy and can’t load gold bullion, platinum bullion or palladium bullion, CME Group Inc., the parent of the Comex and New York Mercantile Exchange, said today in a statement.

MTB must provide holders with metal at Brinks Inc. in New York to meet current outstanding warrants in relevant delivery periods with compensation for costs, Chicago-based CME said.

The CME said that MTB will not be able to deliver metal as the lower Manhattan company deals with "operational limitations" almost a month after the arrival of Hurricane Sandy.

MTB is one of five depositories licensed to deliver gold against CME's benchmark 100-troy ounce gold contract, held 29,276 troy ounces of gold and 33,000 troy ounces of palladium as of Nov. 23, according to data from CME subsidiary Comex.

In a notice to customers on Monday, CME declared force majeure for the facility, a contract clause that frees parties from liability due to an event outside of their control.

CME said that individuals holding MTB warrants or certificates for a specific lot of metal stored in the depository, may receive gold delivered from Brinks Co. (BCO) in New York. MTB is responsible for any additional costs incurred by customers receiving metal from Brinks, CME said.

"This shouldn't have a material impact on the way market participants are doing business," a CME spokesman said. "They'll still contact MTB if they want to take delivery on contracts," and MTB will arrange for delivery through Brinks according to Dow Jones Newswires.

In a notice posted to its website dated Nov. 12, MTB said the firm "sustained substantial damages" following Hurricane Sandy's arrival in New York City on Oct. 29, and had curtailed its operations.

The force majeure will remain in effect until further notice from the exchange, the CME said. The delivery period for CME's December-delivery precious metals futures begins on Friday.

XAU/GBP, Daily – (Bloomberg)

(Bloomberg) -- Turkey Becomes Gold Reprocessing Center for Iran, Hurriyet Says 
Scrap gold and gold jewelry imported into Turkey from Greece, Portugal, Cyprus, countries in the Balkans and North Africa being converted to standard gold bars within 4 hours in Turkey, Hurriyet newspaper says, without saying where it got the information.

-- Iranians use Turkish lira payments for natural gas at Turkish banks to buy gold in Turkey.

-- Gold is then exported back to Iran, or to countries including India, U.A.E., Qatar and Kuwait, where it can be exchanged for currency and transferred back to Iran.

NOTE: U.S. to review Turkey’s exemption from Iran sanctions in December, after Turkish Deputy Prime Minister Ali Babacan said Iran is buying gold in Turkey with money received for natural gas.

(Bloomberg) -- ETF Securities Starts Gold, Silver, Platinum Funds on HKEx
The ETFs will track the London benchmark prices of the metals and begin trading tomorrow, according to a statement on the Hong Kong Exchanges website today.

The funds on silver and platinum are the first on the exchange for those commodities.

(Bloomberg) -- IShares Silver Trust Holdings Unchanged at 9,818 Metric Tons
Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 9,818.07 metric tons as of Nov. 26, according to figures on the company’s website.


                Nov. 26    Nov. 23    Nov. 21    Nov. 20    Nov. 19    Nov. 16

                   2012       2012       2012       2012       2012       2012


Million Ounces  315.658    315.658    315.658    317.643    318.127    319.579

 Daily change         0          0 -1,984,433   -484,013 -1,452,093 -1,452,117


Metric tons    9,818.07   9,818.07   9,818.07   9,879.80   9,894.85   9,940.01

 Daily change      0.00       0.00     -61.73     -15.05     -45.16     -45.17

NOTE: Ounces are troy ounces.

(Bloomberg) -- Silver Expected to Outperform Gold in 2013, CICC Says
China International Capital Corp. comments in e-mailed report today.

Silver seen at $35/oz in 3 mths; $38/oz 6 mths; $35 in 12 mths.

Silver forecast to average $36/oz in 2013; $32/oz in 2014.

NOTE: Silver for immediate delivery trades at $34.17/oz at 2:59 p.m. Singapore time.

For breaking news and commentary on financial markets and gold, follow us on Twitter.       


Gold Climbs as Greek Debt Agreement Lifts Euro; Silver Advances - Bloomberg

Gold futures edge higher after Greek deal – MarketWatch

India 2012 gold demand likely to rise 23% - MarketWatch

Gold ticks higher after Greek debt deal - Reuters

Euro zone, IMF agree on Greece debt deal - MarketWatch


Mark Carney: New age is dawning for the Bank as George Osborne bags his man – The Telegraph

Greece Kicks The Can For The Third Time - SocGen's Take: "More Will Be Needed" – Zero Hedge

China to Import More Gold on Suring Demand and Tepid Domestic Output – The China Perspective

Capital Formation and the Fiscal Cliff - GoldSeek

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GetZeeGold's picture




Man made nukes of destruction. It's Force Majeure bitchez!!!

sampo's picture

It took nearly one month from them to realize and declare the the situation. If I would have one tonne of gold underground in flooded area, i'd be a little more concerned.

Anyway, this case smells.

mayhem_korner's picture



Never let a crisis go to waste. 

"Force Majeure" is bankster-speak for "short squeeze."  They'll be "operationally" clear for delivery once the CBs and algos coordinate a smackdown to $1675 or so.

goldfish1's picture

Excellent comment.

"Force Majeure"

is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, flooding, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract.

In practice, most force majeure clauses do not excuse a party's non-performance entirely, but only suspends it for the duration of the force majeure. [2][3]

Force majeure is generally intended to include risks beyond the reasonable control of a party, incurred not as a product or result of the negligence or malfeasance of a party, which have a materially adverse effect on the ability of such party to perform its obligations[4]...

Thanks to wikipedia

redpill's picture

If you ask for your gold and instead they give you excuses in French you know you're really fucked.

strannick's picture

There were 3 dollar smackdowns in the silver price over the last 3 days that were subsequently erased.

Now they're making it harder to get delivery metal, and announce this smelly ''blame it on Sandy'' excuse days prior to the first day of Dec. delivery. How can Sandy be related to difficulty in picking up gold bars? Never let a good crisis go to waste is right. This is another finger in the dyke to discourage taking possesion of physical metal.

BaBaBouy's picture

SORRY, No Physical Bitchezzz ...........


All The Tungsten Got Washed Out To Sea...

Bay of Pigs's picture

This is probably the biggest story to hit the gold market in 12 years. 

"Until further notice". LOL, so weeks, months or years? In other words, they dont have the gold and it wasn't Sandys fault. 

Game Over bitchez...

imaginalis's picture

FED to Germany - "Due to a 1% increase in humidity we are declaring a force majeure indefinitely and will be unable to repatriate the 150 tons of bullion missing from our vaults."

OutLookingIn's picture


Play Misty for me?

"Operational Limitations."

Is that something like being a little bit bankrupt? As in being just a little pregnant?

Or, have they ran out of the 'quicker-picker-uppers' to wipe the mud and debris off the bars, left there by Sandy?

Or, just possibly they are getting down to the bottom of the vault and find it bare! Just mud.  

NewThor's picture

"We cannot give you your gold."
"Why not?"
"Your gold is wet."
"I don't care, give it to me, I'll dry it off."
"Nope. No can do. Wet gold causes an airborn disease much like SARS and the black plague, so due to national security, we cannot give you you
r wet gold. We can give you dollar bills as a replacement."
" The dollar has depreciated 99% in the last 100 years where gold is up 10,000%. Give me my gold."
"Ask again and under NDAA the gold clause, we will haul your ass off to Gitmo."
"Oh. Ok. then give me lead instead, bitchez!"

JOYFUL's picture

Your reference to 'fingers in the dyke' is amusing in light of the re-alignment of the political power structure by Merika's first gay-bathhouse POTUS....but I suspect you were referring to the more traditional lil Dutch boy and his penchant for performing plug-ins on earthen dikes(of the kind that mysteriously 'gave way' even when Katrina failed to affect them in the slightest!)

No worries, the reference swings both ways, so to speak, and a timely reminder of NYC's status as long time haven for criminal mafia types who, sheltering from the long arm of the Inquisition, first displaced themselves to Amsterdam, then opportunistically hopped passage to Manhattan and set up shop as slavers, whiskey peddlers, arms merchants under the benign gaze of their  protestant Dutch hosts, who like the dupe Pilgrim types in Merry Olde, had their hearts set aglow by the waving of golden guilders which these hebraic moneychangers have used for millenium to hypnotize their hosts....

The CME Group...proudly continuing the hallowed traditions of yesteryear, through applying the science of tommorrow!



" Fingers in the dyke "  - is a desperate male manouver designed to convert a lesbian back to hetero. Usually followed by " Eating the beaver ". Don't get out much, huh ?




Bastiat's picture

Force manuere . . . bullshit. 

Urban Redneck's picture

in other words, someone holding a contract could file a lawsuit against both CME and MTB for negligence, and use the discovery process to prove the malfeasance of the entire allocated gold storage market-


ParkAveFlasher's picture

Good luck getting a judge to hear, a judge to move forward, an appeals court judge, etc.

Urban Redneck's picture

Justice is for sale in the US, just like everywhere else, the largest obstacle to an effective lawsuit is that anyone with deep enough pockets and serious concern about the integrity of the gold markets, would also be more concerned with exchanging their fiat to obtain more physical gold for themselves rather than exchanging their fiat to finance shysters to prove a point which benefits other and smaller market participants.

ParkAveFlasher's picture

I have a feeling that the real traders have taken their ball and went home a long time ago.  Only the lie remains.

Stoploss's picture

Smells like there was never any gold to begin with, and delivery requests are picking up.

Urban Redneck's picture

the issue wouldn't appear to be just any gold, but rather gold with very specific numbers on it, and equally specific people looking for that gold, which is a necessary step to proving the extent of the corruption in the industry

Antifaschistische's picture

I get this feeling it wont be the last time we hear "force majeure" used as an excuse for breaking contractual obligations for metal delivery

LongSoupLine's picture

I sense an institutional "boating accident" on the near horizon.


One big fucking cover-up about to be served bitchez.

Snidley Whipsnae's picture

CME Declares Force Majeure Due To “Operational Limitations” On NYC Gold Depository

CME Declares Force Majeure Due To “Lack of Gold” On NYC Gold Depository


imaginalis's picture

I sense an institutional "bloating accident" in the toilet of the FED

ziggy59's picture

I posted this yesterday.. Lol

Bazooka's picture

Zerohedge always points out Lowest volume days with nice charts.
But his charts hides the simple fact: low volume market rises means bears still lose money.

Don't get Prechterized

tmosley's picture

>Implying there are any bears on Zerohedge

>Implying Zerohedge doesn't understand what happens to markets with out of control printing by central banks

Mae Kadoodie's picture

"This shouldn't impact the way market participants criminally suppress paper gold and silver".

Bobbyrib's picture

I wonder if premiums for physical will rise while they're not directly delivering..

bilbert's picture


I guess should this occur in London - it will still be a result of Sandy.


GetZeeGold's picture



I'm just glad my ancestors had the foresight to get the hell out of that place.

Stoploss's picture

Sandy was so big, their talking about taking back Katrina assistance measures, because Katrina was such a small storm compared to Sandy.

Katrina didn't do nearly the damage that Sandy has done, as the media has pointed this out every day since it happened.

Sandy:  The storm of the millennium..

Snidley Whipsnae's picture

While on the topic of Katrina... Blanchard & Company did not declare a force Majure during Katrina.

the not so mighty maximiza's picture

the gold rusted in the flood

bigkahuna's picture

I wonder where they will find rust free bars? At least until the next flood.

Chief_Illiniwek's picture

I didn't think tungsten was water-soluable...

ParkAveFlasher's picture

You know, for few hundred dollars, someone could have at least put a pair of swimmies on the pallets.  I mean, what kind of jackasses run that establishment?

BovineCapital's picture

That tart Sandy just won't quit! 

merizobeach's picture

Now she tries her hand at Corzining, and it seems she made a pretty good catch.

Sudden Debt's picture

The fucked up part is that those bars where only electroplated with 999 mils of gold... and now the gold peeled off...

MADE IN THE USA used to mean something in the past... now all it takes is a bit of water and poof...


Seer's picture

Boating accident?

LawsofPhysics's picture

If you can't touch it (and successfully defend it), you don't own it.