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So Who Sold All That Gold? - JPM's Own Version

Tyler Durden's picture


Since prevailing fringe theory is that JPMorgan and the other bullion banks 'control' the price of gold, we thought it would be interesting to hear yet another explanation for last week's monumental precious metal market events... from the horse's mouth...


Via JPMorgan,

Who sold the gold?


Gold’s 1 day fall of 9% on Monday was one of the largest 1-day falls in the history of the gold market, but what do we know about who was selling?


We have three high frequency flow indicators for the gold market: CFTC futures positions, Gold ETFs and gold coin sales in the US. Of course, these only make up a portion of gold demand but the remaining physical demand is difficult to capture on a high frequency basis.


The peak in gold ETF holdings of physical gold was actually in December 2012 and there have been reasonably steady outflows since then. In contrast, the peak in the gold price was in October 2012 and it has been falling steadily since then.


Additionally, the outflows from gold ETFs have continued in the latter part of this week, even though the gold price has rebounded some 4%. Looking further back there has not been a strong correlation between ETF flows and gold prices on either a high or low frequency basis. ETFs do not seem likely to have been the culprit here, although Monday’s $1.8bn outflow undoubtedly didn’t help.


[ZH: It would seem the data in the chart above suggests that JPM is incorrect and ETFs were very responsible - as the momentum from the Q4 to Q1 divergence corrects]


Sales of American Eagle gold coins, perhaps an indicator of retail investment demand, have actually risen sharply over the past two weeks.



Total sales so far in April are 153,000 ounces, already the highest month since mid 2010, and we still have two weeks to go.


[ZH: It seems - unlike stocks - that a falling price does encourage more demand]


That leaves CFTC managed money futures positions. Unfortunately, we only have data up until last Tuesday, the 9th of April, so not including the sell-off period itself. However, there has historically been a strong correlation between changes in these positions and changes in the gold price, so it seems likely that CFTC positions will also have fallen sharply, but we have to wait until next week to know for sure.


[Updated chart below shows the exact opposite]



[ZH: The updated chart above suggests that this was not the case as net long positions actually rose on the week...]


In summary, of the three high frequency indicators of gold demand at our disposal, it seems likely that futures investors will turn out to be the biggest sellers over the sell-off period. Of course this doesn’t tell us anything about causality, especially as we are missing a large part of the physical market. Anecdotal reports suggest that physical demand, driven by China was very strong in the days following the sell-off, so this may well be what has allowed prices to stabilize at current levels.

Hhhhmmm - doesn't seem so convincing...


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Sun, 04/21/2013 - 19:16 | 3481649 HedgeAccordingly
HedgeAccordingly's picture

the ETF effect -.. probably going to 1200?    - the tail wagging the dog... 

Sun, 04/21/2013 - 19:21 | 3481655 Croesus
Croesus's picture

Keep dropping the price, schemers! I'll keep buying the physical stuff, while you keep your paper.


That's "The Change I Can Believe In."


Sun, 04/21/2013 - 19:23 | 3481665 UnpatrioticHoarder
UnpatrioticHoarder's picture

The increase in open iterest is proof this was an orchestrated takedown.

Sovereigns (China, Russia) are taking on the shorts and seem OK with coughing up margin on their losing long positions because in order to clean out the West of its physical they need to buy when the volume is offered.

Sun, 04/21/2013 - 19:49 | 3481748 Pladizow
Pladizow's picture

Is Shaggy JPM's new head of media?

- It wasn't me!

Sun, 04/21/2013 - 20:01 | 3481757 TwoShortPlanks
TwoShortPlanks's picture

Gold Take-Down = Lloyd Craig Blankfein fighting for his life

I wanted to better understand the recent take-down on the Gold price, so I drew a rough schematic of all the major players which affect the overall pricing, this included the Central Banks, the Government (Bond trade with Bullion Banks), the Bullion Banks, the LBMA, the COMEX (Futures Market), and the Open Market (physical retail). I also included ETFs and assumed a conservative return between Gold Leasing and Bond buying.

I then looked at which entity loses and which entity wins if the Gold price rises or falls a modest amount. This turned out to be both the ETFs and the Open Market. The ETFs obviously being the greatest and especially if leveraged (a mugs game).

I then looked at which entity loses and which entity wins if the Gold price rises or falls a large amount. This turned out to be the ETFs, the Open Market and the Futures Market.

The next step was to see what happens with shortages and/or lengthy delays in supply or physical payment. Even though large swings in price affect the obvious players, it is nothing in comparison to just how far up the chain a squeeze hits.

In a squeeze, the back pressure from the Open Market (physical retail) creates a massive conflict between physical supply and….*drum roll*….the ability for a Bullion Bank to supply physical back to the Central Bank once a Gold Lease reaches maturity. Cash is no issue whatsoever since the Bullion Bank can offload Bonds into the marketplace.

(NOTE: There is a possibility that a large number of Gold Leases where paired up with a large number of Bonds reaching maturity, and that in order to make profit from the Lease-to-Bond they needed to pull down the Gold price….but I doubt it.)

If you assume, as in the case of last week’s response, that the Open Market drives a run into physical buying at discounted prices, then the only place physical can be derived is either the Central Bank, the Bullion Banks, or the COMEX.

Assuming the recent events involving the Mercantile Exchanges’ movement of Unallocated Gold (2 Million ounces was it?), then it is safe to say that there was insufficient physical supply within the system to meet internal demands (CB Lease maturity?).

Assuming these guys are somewhat astute, although motherfuckers as people, we can assume they had alarm bells ringing well in advance. You will recall the Talking Heads well in advance where, Goldman and the like (all Bullion Banks mind you) touted the end of the Gold boom, placing heavy Short Positions, and predicted a large drop in the near future (bringing on-board other leash lead Gimp banks and financial entities).

They then coordinated and set aside the multiple million ounces physical across the Mercantile Exchanges and set the take down.

According to KWN’s interview with Andrew Maguire, 55 Tons of physical was released into the system. I can only assume this was Long holders selling their hundreds of Tons of positions into the Futures Market, with the Mercantile Exchanges balancing the books since the physical (Unallocated Gold) having already been sent ahead of time, or, set aside earlier.

This 55 Tons probably didn’t move much more than a dozen meters in some vault however, the paper works sure as hell did.

Since the Government is attempting to raise inflation - or so they say - then I can’t for a minute believe that this was a Government intervention to bolster the US Dollar. I think its’ more likely to have been a Bullion Bank, left short on an upcoming Central Bank Gold Lease maturation date, in which they turned to the market instead of their own vaults.

This leads me to other possibilities; that the Barbaric Relic from the past has finally turned a corner in the mindset of the biggest banking entities on Earth. That Central banks are not re-issuing Gold Leases and are in fact calling them in upon maturation. That the chain of entities which comprise the paper and physical Gold system is now cavitating/surging/stalling as physical Gold leans-out.

If I’m correct, this sets the precedence for further take-down attempts as contracts come due and the cavitation continues.

Soon, not too far into the future, expect to see ALL Futures Contracts for Gold settled in paper Fiat….Oops, too late!

Let's see how long Goldman Sachs and JP Morgue can suck through a straw? Remember, the Central Banks won't settle in paper they already print!

And since Goldman and JPM, playing as they usually do, probably have far more Gold Leases than it is possible to settle, will one day soon, need to get on all fours and beg for forgiveness to those who preside above them (and they exist), to those Blankfein and Dimon owe! Coz in their world, Commercial Law doesn't exist, nor does our world the two certainties are death and taxes, in their world it’s death and debt.

JP Morgan was thought to be loaded, but it turned out that he wasn’t, and more than likely he was merely an agent for other, much larger, entities. Blankfein and Dimon are no different. He is merely a minions trapped in their own belief that they are the Emperor.

The choice to go unseen does not erode the power to intervene.

Whos a Muppet now Blankfein?

Sun, 04/21/2013 - 20:06 | 3481794 Stuck on Zero
Stuck on Zero's picture

I'm old enough to recall what happened when Jimmy Carter decided to take down the price of gold.  He sold tons of U.S. reserves.  The price went up.  He sold more.  The price went up more.  He sold more.  The price went up more again.  Fortunately he was booted from office before he could continue that dance for long.


Sun, 04/21/2013 - 20:33 | 3481856 Pinto Currency
Pinto Currency's picture


Andrew Maguire himself notes that for more than 6 weeks the LBMA and the Shanghai Gold Exchange alone have been allocating ~ 30 tonnes of gold per day for delivery.  That's ~ 1 million oz. per day.  And we've seen near continual backwardation in the price structure for silver and gold as well - this speaks of extraordinarily strong physical demand.

JPM will know this too.

Also, when investors stand for delivery of physical gold at GLD and close out positions at GLD, JPM categorizes this as a decline in demand. 

Seems that there are perhaps far more useful sources for information about gold than the bullion bank widely accused of being at the center of gold and silver market rigging.

Given the reality of the G20s 'bail-in' deposit asset theft plans revealed by Cyprus and subsequent, it seems reasonable that physical gold demand is accelerating, not losing favor.

Sun, 04/21/2013 - 20:34 | 3481879 Bay of Pigs
Bay of Pigs's picture

+1 Excellent observation Pinto.

Sun, 04/21/2013 - 21:14 | 3482023 deKevelioc
deKevelioc's picture

Gaslighted by JP Morgan.  Now, that's precious.

Sun, 04/21/2013 - 21:30 | 3482113 w00dmann
w00dmann's picture

+1 for the 'gaslight' reference

Mon, 04/22/2013 - 03:22 | 3482822 Lore
Lore's picture

BILL COSBY explains why JPM "doesn't know":

Sun, 04/21/2013 - 23:01 | 3482433 deKevelioc
deKevelioc's picture

God, I love your post!  I never thought I'd think I'm going Chinese; I think I'm going Chinese; I really think so.

Mon, 04/22/2013 - 06:12 | 3482935 Peter Pan
Peter Pan's picture

Excuse my ignorance Pinto Currency, but is this million oz allocation per day, the big boys' way of putting some sort of constraint on the rise in price by feeding the market with low cost gold? Because yesterday I was posing the question in another ZH post as to WHO could be selling low priced gold at such a low price. I do not fully understand this part of the market so once again forgive me my question if it sounds stupid.

Mon, 04/22/2013 - 10:08 | 3483531 Pinto Currency
Pinto Currency's picture

Nobody knows PP.

All that can be seen is that 3x annual mine supply is being pulled from those two markets alone. 

Then there's Dubai, Hong Kong, etc.

Sun, 04/21/2013 - 23:35 | 3482514 MythicalFish
MythicalFish's picture

They gonna stop soon, geniuses figured out that the jump in commodity vol threatens the vix short.. Wouldn’t read too much into their hedge fund’s short beta, its mostly muppets’ money - and if you buy jnj, sell aapl its short beta but still a momo trade..


Sun, 04/21/2013 - 21:28 | 3482105 seek
seek's picture

Excellent writeup. I has mused a few days about that perhaps the CBs weren't renewing leases, and your argument really supports that notion.

As I mentioned then, because the BBs and the gold market in general is writing 100oz of paper per 1oz of gold, it's basically fractional reserve gold banking, and the CBs not renewing leases is equivalent to people pulling assets out of the bank -- AKA a bank run.

Given that, it's pretty clear why the BBs want the price to be as low as possible to settle contracts. It's also clear that with the leasing and inventory drawdown, as you point out, someone isn't getting their gold back. Actually, a chain of someones -- the BBs won't get back physical that's been minted or shipped to the far east, and in turn, the central banks won't get the gold back from the BBs.

Here is where it will get uncomfortable -- Germany, the US, or someone else has lost their gold. I could see major efforts made to keep this quiet and continue to suppress the price so that they can re-acquire physical to replace what is lost. Talk about dichotomy! You've got a short squeeze that has to be hidden to keep the price going up, and hiding it increases the competition for the physical. The only outs I see are nationalization or somehow directing all new physical into the BBs/CBs.

It probably makes the most sense for the nations to just claim physical in vaults as their own, and blow up the BBs and paper claims. I'd imagine the Fed and other CBs would quietly negotiate settlements amongst themselves. Now would be a really, really bad time to have paper AU, be it contracts or a vault receipt.

Now to figure out what happens when the LBMA/BBs and COMEX go boom...

Mon, 04/22/2013 - 00:19 | 3482465 TwoShortPlanks
TwoShortPlanks's picture

Exactly! This is the Unallocated Gold version of Cyprus. Next stop, Allocated Gold!!!

Fed Governor Jeremy Stein said they're on their own now.

The BBs have gone crazy making money on Ponzi-Gold, the Central Banks have turned a blind eye for years however, now they need their Gold back, but the BBs don't have it, and the public are asking questions.

Sucks for some!

Mon, 04/22/2013 - 01:12 | 3482665 Arius
Arius's picture

@seek "Here is where it will get uncomfortable -- Germany, the US, or someone else has lost their gold. I could see major efforts made to keep this quiet and continue to suppress the price so that they can re-acquire physical to replace what is lost."


Seek - I think we know how long it takes to replace what is lost given how much is in the market to buy; 7 YEARS, thats how long it will take for Germany to repatriate part of its gold holdings in the US.  It is a lost cause. forget about it.

Maguire explains how the paper markets work where BB can push the price to ZERO if they tomorrow want to, however, where are they going to find the gold to sell at those prices.  A lost proposition.  As you said fractional banking, if someone wants to gamble in the futures market, might as well go to the casino, i would guess the odds are higher there; in the futures market is everything controled since the other guy can see every position in the computer and once in awhile when the fruit is ripe decides to just cut it, and good luck to all those pennies you made along the way...

Mon, 04/22/2013 - 06:54 | 3482965 Gazooks
Gazooks's picture

 ...'BB can push the price to ZERO if they tomorrow want to, however, where are they going to find the gold to sell at those prices'...

They're about as close to zero as they can get now without destroying their pretentious exchange mechanisms.

When physical supply ends, game over. Fundamentals do matter in the real world.

Mon, 04/22/2013 - 08:03 | 3483114 BurningFuld
BurningFuld's picture

Just looking at the Kitco site. Never seen such a small selection of Gold available. They have ZERO Canadian gold coins for sale right now!!!

Sun, 04/21/2013 - 23:21 | 3482491 StychoKiller
StychoKiller's picture

Strange, the ESF (Exchange Stability Fund) is not on your list of manipulators; of course, they stay in the shadows, by design...

Sun, 04/21/2013 - 19:50 | 3481751 knukles
knukles's picture

Talk about talkin' yer very own little very special book.
Nothin' to see, no mystery, golly gosh gee wiz...

Mon, 04/22/2013 - 03:42 | 3482840 fockewulf190
fockewulf190's picture

The Morgue is chock full of pathological liars and thieves! The whole organisation!

Sun, 04/21/2013 - 20:36 | 3481887 caimen garou
caimen garou's picture

+ a gazillion!

Sun, 04/21/2013 - 19:27 | 3481679 DosZap
DosZap's picture

Total sales so far in April are 153,000 ounces, already the highest month since mid 2010, and we still have two weeks to go.

And DOUBLE the previous TWO months.

Sun, 04/21/2013 - 22:24 | 3482332 H E D G E H O G
H E D G E H O G's picture

Would it be asinine for the  'Hog to ask the simple question of not who sold the paper, but who BOUGHT the shit? The answer is the same scumbags, or proxy's, and now it'll be pump it up time, again.

Sun, 04/21/2013 - 19:20 | 3481660 w00dmann
w00dmann's picture

Fortunately I bought gold when it was $200oz which means I'm still way ahead by a factor of...


Oh who am I kidding, I bought 2oz at $1700 apiece.  Yay me.

Sun, 04/21/2013 - 19:38 | 3481713 imbrbing
imbrbing's picture

Don't feel bad, I have 5 oz's at that price :) But I still have them, and will for a long long time.

Sun, 04/21/2013 - 20:11 | 3481807 espirit
espirit's picture

One ounce of Au will still buy you a custom tailored suit.

Sun, 04/21/2013 - 20:33 | 3481878 Jendrzejczyk
Jendrzejczyk's picture

We'll all be stylin' in debtor's prison.

Mon, 04/22/2013 - 03:41 | 3482838 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

That was also true at $1900. But the tailor hasn't seen many clients recently so he's lowered his prices. Funny how that works. In A.D. 50 gold really nice man's business toga.

Sun, 04/21/2013 - 19:56 | 3481767 Kirk2NCC1701
Kirk2NCC1701's picture

If you own paper gold, you can still convert it into phyz, at some conversion cost.

Mon, 04/22/2013 - 03:06 | 3482812 Gavrikon
Gavrikon's picture

And for God's sake, do it sooner rather than later.

Sun, 04/21/2013 - 19:56 | 3481770 GoinFawr
GoinFawr's picture

"Strangers with this kind of honesty make me go a big rubbery one."-Cornelius

Sun, 04/21/2013 - 20:23 | 3481841 Yen Cross
Yen Cross's picture

   I'm floored. GoinFawr,    The master truthiness/  Where have you been for the last yeAR?

Sun, 04/21/2013 - 21:36 | 3482136 WmMcK
WmMcK's picture

Sorry to ask, but does your log-in have anything to do with the great reverser?

Sun, 04/21/2013 - 19:20 | 3481662 kill switch
kill switch's picture


It will keep on going up as the demand vs phys is departing especially in silver hahahahaah


Silver to $500.00 FRN's


Sun, 04/21/2013 - 19:19 | 3481663 francis_sawyer
francis_sawyer's picture

Gold ETFs and gold coin sales in the US. Of course, these only make up a portion of gold demand but the remaining physical demand is difficult to capture on a high frequency basis.


I promise not to cum on your face sweetie... :-)

Sun, 04/21/2013 - 20:46 | 3481915 toys for tits
toys for tits's picture


[T]he remaining physical demand is difficult to capture on a high frequency basis.

Does anyone believe that this wasn't created by design?

Sun, 04/21/2013 - 19:22 | 3481667 newengland
newengland's picture

The most interesting thing about the gold and silver market is that it is a very small market, relative to other markets. The people who move the market speak to each other, know each other, and the interests are beyond gold and silver, and beyond CONgress, Zionists/Islamists, for example.

Sun, 04/21/2013 - 19:24 | 3481671 apberusdisvet
apberusdisvet's picture

Many analysts have commented that the COT report is unbelievable, and probably fraudulent; brought to you by the same criminals at the CME who are obviously in the same ass-fucking daisy chain as the banksters.

Sun, 04/21/2013 - 19:43 | 3481724 YHC-FTSE
YHC-FTSE's picture

Well, if futures are responsible for the sell off, then it looks like the CTFC doesn't want anyone to know why or who did it. They released relief from reporting requirements. 


Trade Options by End-Users: In CFTC Letter No. 13-08, the Division of Market Oversight (DMO) granted no-action relief from certain reporting and recordkeeping requirements under the trade option exemption provided by CFTC Regulation 32.3 to entities that are not swap dealers or major swap participants (Non-SD/MSP).

Sun, 04/21/2013 - 19:42 | 3481732 AllWorkedUp
AllWorkedUp's picture

Yeah, the CFTC report was a fucking joke. Totally meaningless drivel, no accounting for the 1000 tons of paper gold that were dumped on the paper market in two days.

 Also, great analysis from JPM no doubt, completely honest, no hidden information. Fuck you, JPM, Goldman, Merrill. Nothing will save you fucks.

Sun, 04/21/2013 - 20:24 | 3481849 Bay of Pigs
Bay of Pigs's picture

Maybe we need the PM experts like James Cole and PUD to weigh in on this and enlighten us goldtards?


Sun, 04/21/2013 - 20:41 | 3481899 fonzannoon
fonzannoon's picture

Did James tell us who his dealer is yet?

(gold dealer)

Sun, 04/21/2013 - 20:48 | 3481931 akak
akak's picture

Yes, and here was his response:

Gold dealer

Sun, 04/21/2013 - 20:50 | 3481946 fonzannoon
fonzannoon's picture

I just laughed so hard my wife came into my office and sees me laughing and on my screen is crickets chirping.

I may be going away for a while.....

Sun, 04/21/2013 - 23:29 | 3482507 StychoKiller
StychoKiller's picture

A mind is a terrible to waste(d)! :>D

Mon, 04/22/2013 - 02:39 | 3482794 Rogue Trooper
Rogue Trooper's picture

+1 oz... I lost yet another keyboard to the dangerous combination of coffee in mouth and reading ZH comments :)

Mon, 04/22/2013 - 07:23 | 3483003 Jalaluddin
Jalaluddin's picture

Disconnect keyboard. Run to tap. Turn keyboard upside down. Turn tap on. Shake keyboard vigorously under running water (lots of crud should come out). Can give a last rinse with filtered RO water. Shake to remove as much water as possible. Dry as quickly as possible. Plug in and see if it works. :)

Sun, 04/21/2013 - 19:26 | 3481676 FieldingMellish
FieldingMellish's picture

I thought that this was already dissected every which way possible and that the outcome was a noteable HFT massive volume dump at 12:05 Friday morning? 

Sun, 04/21/2013 - 19:35 | 3481703 EvlTheCat
EvlTheCat's picture

Muppets can't think for themselves.  That is why they have a hand shoved up their ass.

"from the horse's mouth...",  ha, more like the horse's ass.

Sun, 04/21/2013 - 19:35 | 3481707 FieldingMellish
FieldingMellish's picture

Its an insult to horses really.

Sun, 04/21/2013 - 19:45 | 3481739 Everyman
Everyman's picture

Good point, we should not use "horses" and JP Morgan employees, opinions, advice, etc, in the same page, let alone paragraph. 

NEW RULE:  You must use "Geitner's ass" or "Bernanke's ass" instead of horse's ass.  The equines are innocent and don't care about money anyway.

Sun, 04/21/2013 - 21:01 | 3482006 toys for tits
toys for tits's picture


There is no character, howsoever good and fine, but it can be destroyed by ridicule, howsoever poor and witless. Observe the ass, for instance: his character is about perfect, he is the choicest spirit among all the humbler animals, yet see what ridicule has brought him to. Instead of feeling complimented when we are called an ass, we are left in doubt.

- Pudd'nhead Wilson, Mark Twain

Sun, 04/21/2013 - 20:15 | 3481810 EvlTheCat
EvlTheCat's picture

Excuse me while continue to dine, on my Swedish meatballs from Ikea, while I post.  I humbly apologize for my insult against all horses everywhere.  I stand corrected. 

Can someone please pass the ketchup...

Sun, 04/21/2013 - 20:40 | 3481897 Jendrzejczyk
Jendrzejczyk's picture

Ikea has re-branded their tomato condiment as "Giddyup".

Mon, 04/22/2013 - 00:56 | 3482650 Colonel Klink
Colonel Klink's picture

Figured you'd want the horsey sauce.

Sun, 04/21/2013 - 19:26 | 3481681 FieldingMellish
FieldingMellish's picture

gold ETF holdings of physical gold 

That made me LOL!

Sun, 04/21/2013 - 23:37 | 3482471 socalbeach
socalbeach's picture

GLD does have gold, but if the following link is correct the GLD repository is like a central bank for gold. The bullion banks [BBs] deposit their gold inventory, which in most cases is clients' unallocated gold.  The BBs get shares in return which they can redeem at any time.

If you buy GLD, your gold shares are listed on the book of a BB, but not with the GLD trustee.  So the BBs can have more GLD shares on their books than there is gold in the vaults that they have shares for.  And like I said previously, the gold that's in the ETF isn't even (in most cases) owned by the BB, they're just a custodian.

In other words, fractional reserve gold ownership.

Someone can correct the above if they think it's wrong.

Sun, 04/21/2013 - 20:10 | 3481682 Yen Cross
Yen Cross's picture

     I love everything about all precious/strategic metals.

If usd/jpy breaches the 100 usd/jpy barrier, all hell is going to break loose. ( In a good way)

     The huge options, vanilla & DNT,( digital options) on the yen will reshape "Safe Haven" currency status...<

Sun, 04/21/2013 - 19:27 | 3481685 Dr. Engali
Dr. Engali's picture

John Paulson was probably liquidating to meet redemptions and margin calls.

Sun, 04/21/2013 - 19:41 | 3481721 Scarlett
Scarlett's picture

isn't him in physical?

Sun, 04/21/2013 - 19:52 | 3481755 Dr. Engali
Dr. Engali's picture

Nope he is an ETF guy.

Sun, 04/21/2013 - 20:47 | 3481935 toys for tits
toys for tits's picture

I'm sure Paulson has enough money to hedge his position.

Sun, 04/21/2013 - 20:56 | 3481979 fonzannoon
fonzannoon's picture

I have a weird feeling Paulson is trying to ask for delivery right about now.

Sun, 04/21/2013 - 21:35 | 3482132 davey
davey's picture

Paulson was right in subprime and he will be right again with gold especially NG nova gold.

Sun, 04/21/2013 - 22:24 | 3482331 Fred Hayek
Fred Hayek's picture

If he's got all his money in the ETF then he won't win anything unless he redeems his shares while there's still some left in it. Winning is owning physical.

Sun, 04/21/2013 - 19:37 | 3481709 Downtoolong
Downtoolong's picture

It was Corzine.

Actually, JPM just needs a little more time to decide which rogue trader to blame it on. They might streamline the process and just hire a temporary one this time.

Sun, 04/21/2013 - 19:40 | 3481723 nmewn
nmewn's picture

Price, smice.

At some point dollars will be priced in gold, then we can have a discussion about value. Which is nothing more than paying the price for what you get in return.

Until then, its arguing on their constantly degrading terms...on a host of levels ;-)

Sun, 04/21/2013 - 19:59 | 3481778 espirit
espirit's picture

I often think of all those silver certificate frn's currently in my possession, and utilize that as evidence to those who allude (i.e. believe) in fiatsco longevity.

Not only that, but I do have quite the collection of now defunct fiat from other nations, also known as junk ...

Sun, 04/21/2013 - 20:11 | 3481802 nmewn
nmewn's picture

I got a few of those too.

One of my worst mistakes was accidently letting one go at a store...a ten dollar silver certificate...I went back and she said what are you talking about?...and smiled.

I got back outside and I kinda smiled too, she got me, fair & square...I had gotten it earlier in the day when I broke a was back in the early eighties, never saw another one.


Sun, 04/21/2013 - 20:52 | 3481958 toys for tits
toys for tits's picture

The dollar is already priced in gold.  We just haven't gotten used to referring to it that way.

Right now a dollar is worth a smidget under 25 mg.

Mon, 04/22/2013 - 01:33 | 3482678 anonnn
anonnn's picture

re mnewn, above , "Price, smice. At some point dollars will be priced in gold, then we can have a discussion about value. Which is nothing more than paying the price for what you get in return."

 Price aka value seems akin to ideas of fairness, equity, justice and similar old-fashioned relics.

  Such can belittle, even debunk, the likes of charts, formulas, algorythms, mathematical proofs, college degrees and PhD/LLBs/Nobels, etc..

Perhaps everyon should be encouraged to ask himself, "Who decides for me what is right and wrong?".

It has been said that decency  is not a product of schooling.

Sun, 04/21/2013 - 19:42 | 3481726 eddiebe
eddiebe's picture

How do you know when JPM and their ilk are lying?

When their lips are moving.

Sun, 04/21/2013 - 21:55 | 3482225 merizobeach
merizobeach's picture

The best answer to this question was provided a few weeks ago by icanhasbailout:

"when he's not swinging from a rope".

Sun, 04/21/2013 - 19:53 | 3481728 AL_SWEARENGEN

The 'great minds' over at JPM surely have concluded by now, that at this point in the game just say fucking ANYTHING.  Watch the hoople heads follow the herd.  Then watch the herd get slaughtered.  

Sun, 04/21/2013 - 19:54 | 3481763 knukles
knukles's picture

Through all this, it's been spooky quiet about Silver, JPM and Blythe

It's quiet out there... too quiet.

Sun, 04/21/2013 - 20:03 | 3481789 espirit
espirit's picture

Those of us with dry powder will:

Buy on the way down, and buy on the way back up.

Sun, 04/21/2013 - 19:43 | 3481730 Everyman
Everyman's picture

THESE guys actually think they "know best" on how to invest????

"JP Morgan, without corruption, and bailouts we'd be toast!"

Sun, 04/21/2013 - 20:06 | 3481793 espirit
espirit's picture

To invest means to have faith in something.

ZH'ers know where to place that faith.

Sun, 04/21/2013 - 19:53 | 3481753 cynicalskeptic
cynicalskeptic's picture

You REALLY didn't expect them to say:

"We at JP Morgan found ourselves with increasingly depleted COMEX inventories of gold and silver - with accelerating draw downs continuing  so - to protect our TBTF status were compelled to drop the price of Gold and Silver substantially to save our asses.    Following past protocols, through intermediates, we sold massive naked short positions to drop prices and force massive waterfall selling - allowing us to buy back those positions at far lower prices - profiting handsomely - while also acquiring additional inventory at a lower price. This i=one in 7000 years event was a bit blatant but our butts were really on the line and there were no MF Global accounts to grab this time.   We will continue to liquidatie GLD baskets to meet LBMA delivery demands from unnamed eastern central banks."

Not said - "Hell, even if we DO default we get to pay off contracts in cash for a LOT less money - out of profits we made dropping the price..... win-win"


I asked a JPM exec about their declining COMEX vault inventories the week before this happened and he responded - 'Why hold it if you can buy it cheaper in the future?'  Maybe a generic answer or......



Sun, 04/21/2013 - 19:55 | 3481762 All_Is_Well
All_Is_Well's picture

This is like asking the fox who's eaten the hen?

Sun, 04/21/2013 - 19:55 | 3481766 knukles
knukles's picture

Ruoert was last seen buggering one!

Sun, 04/21/2013 - 19:58 | 3481772 Stuck on Zero
Stuck on Zero's picture

One thing for certain.  Despite large gold markets in Dubai and Hong Kong the Western bullion groups have demonstrated that they can still take down the market whenever they wish.  Unfortunately, it is like the last cannonade of a sinking warship.  Bravado to the last minute.


Sun, 04/21/2013 - 19:58 | 3481773 Arbysauce
Arbysauce's picture

Can't you just reference how the quoted price is determined and work back from there? JPM makes it sound like the price is a result of immaculate conception.

Sun, 04/21/2013 - 19:57 | 3481774 WallowaMountainMan
WallowaMountainMan's picture

i don't understand why everyone here thinks zh is so much bettor than jpm...just because zh has a history of accurate forecasts and predictions? just because zh lent its muscle to raise nanex to almost a household word? just because zh continues to hit their subject matter (financial) out of the park by being right time after time?

come on folks....get real.


Sun, 04/21/2013 - 22:37 | 3482374 YC2
YC2's picture

What does being right have to do with sell side finance?

Fri, 05/10/2013 - 11:14 | 3548373 WallowaMountainMan
WallowaMountainMan's picture

if i am pickin up what your layin down....

what i meant by 'financial' was not as vs 'buy side' but rather my attempt to parse out my view as to the general types of zh posts that i see most value in....say as opposed to, say, 'political' postings..

hope this helps...

Sun, 04/21/2013 - 19:59 | 3481777 spanish inquisition
spanish inquisition's picture

This whole PM buying thing isn't working out for me. Spending way too much replacing boats.

Sun, 04/21/2013 - 20:00 | 3481784 scatterbrains
scatterbrains's picture

I kinda feel sorry for those that were over levered and got nearly wiped out in this latest and expected plunge and that are now sitting on the sideline waiting for 1200 or 1100 or what ever.  Your going to get fucked all over again when it doesn't happen.

Sun, 04/21/2013 - 21:39 | 3482150 seek
seek's picture

The price could go lower, or even below what you've mentioned. You can still feel sorry for them, as I doubt they'll be able to score more than an ounce or two of physical, and if the price does go lower, it'll mean paper gold is on its way to $0 and they'll lose... again.

Sun, 04/21/2013 - 20:03 | 3481790 ISEEIT
ISEEIT's picture


Learning is good and We will do it better than U.


Sun, 04/21/2013 - 20:07 | 3481795 YHC-FTSE
YHC-FTSE's picture

Does it really matter? I mean who the hell speculates on gold prices to earn an income here? We take physical delivery to secure our wealth - to hedge against inflationary pressures caused by printing and a possible collapse of the FRN. If anyone wanted to earn a living speculating/gambling,  they'd be much better off in fx or es. Isn't that what we all take for granted?

For traders, moving out of gold is a no brainer this year when Bernanke announced QEx. Why the hell would they keep gold etfs and suffer higher margins when using it as collateral to make their punts? I wouldn't.  None of this really affects us, except as a good opportunity to stack more. And all this manipulation only reinforces my initial beliefs that the FRN is in serious trouble. 

Sun, 04/21/2013 - 20:11 | 3481805 Yen Cross
Yen Cross's picture

 An Anon?

Sun, 04/21/2013 - 20:15 | 3481817 YHC-FTSE
YHC-FTSE's picture


Sun, 04/21/2013 - 20:17 | 3481825 Yen Cross
Yen Cross's picture

Ehh? ya want to know what the give away is/was?

Sun, 04/21/2013 - 20:23 | 3481847 YHC-FTSE
YHC-FTSE's picture

Has to think about it for a moment before I got it. Yes please tell me how. 

(You're totally wrong, but if you want to be fucking jerk with the false accusations, then go right ahead. Looks like you're in the mood for a fight and I'll ablige.) 

Sun, 04/21/2013 - 20:37 | 3481875 Yen Cross
Yen Cross's picture

    tELL ME. How am I wrong? F**ing jerk?( That's all you got?)

Your certainly an owner of a 2013 3-series BMW.

Let me profile you/ 21-27 aspiring (well educated) looking for work and working at Dominoes pizza to pay your rent.

  Well, I have an answer for you. I worked my ass off for 15 years in a parking structure to earn enough money, to have the privilage to speak on Z/H.


Sun, 04/21/2013 - 20:38 | 3481891 YHC-FTSE
YHC-FTSE's picture

OMG. You poor foolish boy. 

Thank you for sharing.

Mon, 04/22/2013 - 02:22 | 3482772 Geruda
Geruda's picture

The gold many of the peoples here are having is the golds they are having in their teeth.  Many peoples whose butts are having much fat are not having very many golds but having speeches like the gold they are having is much when the true speaking about them would not be having any golds.

Mon, 04/22/2013 - 02:26 | 3482778 akak
akak's picture

Geruda, what is your purpose here, and why will you never respond to any solicitations for you to do so?

Mon, 04/22/2013 - 05:45 | 3482912 Arius
Arius's picture

yeah well ... another lost soul ...

Mon, 04/22/2013 - 04:15 | 3482870 The Abstraction...
The Abstraction of Justice's picture

As things get worse more and more of us are forced to sell that gold and silver to make ends meet, so while you are laughing as you get more in, consider, that your business may be next, and it will not seem so funny when you are selling the gold at a loss.


It is better for everybody for the collapse to happen sooner than later.

Sun, 04/21/2013 - 20:07 | 3481797 Yen Cross
Yen Cross's picture

    LONG< Short ,  the agos this week.  Human Nature will prevail.

Sun, 04/21/2013 - 20:07 | 3481798 disabledvet
disabledvet's picture

Gold and silver weren't the only ones getting crushed. Copper has been getting annihilated as well. Indeed the totality of the materials space has been sucking wind for a couple of years now. with all the "commodity heavy" economies QE'ing (thus depressing economic growth) I really think it's hard to separate the loss of demand for ALL goods from the price of the commodities themselves. doesn't mean gold will collapse as it did in 1980 but i do remember the "Dr. Copper" episode in Japan back in the 90's as one single trader had amassed a truly MASSIVE copper stockpile only to be forced to liquidate since it was nothing more than a trading play and the bulk had been purchased on margin. anywho "there's a economic recovery out there somewhere"...i think.

Sun, 04/21/2013 - 20:58 | 3481989 akak
akak's picture

True, but you are putting the commodity cart before the PM horse.

Gold and silver were smacked down first, and FAR more, on a percentage basis, than any (other) commodity.

Gold and silver were the obvious targets here --- copper and everything else just got caught up in the downdraft.

Sun, 04/21/2013 - 20:40 | 3481871 devo
devo's picture

Gold market is going to go ballistic at the next whiff of war, savings confiscation, etc. Paper shorts are set up for a face ripping, which is why I'm sure Goldman is long.

Sun, 04/21/2013 - 20:45 | 3481916 fonzannoon
fonzannoon's picture

If what is going on now is not a whiff of war I give up. This is the biggest fart in the face of war since 2001.

Mon, 04/22/2013 - 00:49 | 3482643 boogerbently
boogerbently's picture

Goldman said time to short gold on Wed., Fri and Mon. were the HUGE drops.

Mon, 04/22/2013 - 05:50 | 3482916 Arius
Arius's picture

yes, also they lowered their short sell target to under 1400;

in addition, CITI research,HSBC and every other researcher and gold analyst on the planet predicted gold to reach 1200 ....

so plenty of muppets i would guess who took Goldman at their word and are being hanged out to dry ... they made money under 1450, then continued their bets so ... yeah well, easy comes easy goes ...

Sun, 04/21/2013 - 20:46 | 3481928 They Tried to S...
They Tried to Steal My Gold's picture

Obama should just issue an executive order to change their name......not that anyone would notice.

JP Fraud


Because they are richer than all of us....

Sun, 04/21/2013 - 20:48 | 3481933 bardot63
bardot63's picture


Sun, 04/21/2013 - 21:00 | 3481993 loveyajimbo
loveyajimbo's picture

I think tarring and feathering Mr. Jamie "Shalom" Diamond would be a reasonable first step here...

Sun, 04/21/2013 - 20:59 | 3481995 IamtheREALmario
IamtheREALmario's picture

Please tell me how, if there is guarateed infinte liquidity in the buying and selling of commodities and equities can there ever be a free market price? The guaranetor of liquidity (aka the middleman) always gets to choose price.

It stands to reason then that if there is guarateed liquidity and no free market price than any lowering of price is one of the two following things:

1. Opportunism on the part of the intermediary

2. Simply a choice of price on the part of those who set price

Logically it can be no other thing.

Sun, 04/21/2013 - 21:03 | 3482010 chinaboy
chinaboy's picture

No one with serious brain will believe JPM. What we need to hear from them is whether they were involved in this trade like a whale.

Sun, 04/21/2013 - 21:14 | 3482044 russwinter
russwinter's picture

How convenient that the JPM analyst used April 15th as his cut off on the US Mint coin sales because:  


"According to today's data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone. 

Sun, 04/21/2013 - 22:37 | 3482371 goldenbuddha454
Sun, 04/21/2013 - 23:30 | 3482509 NOTfromSanFrancisco
NOTfromSanFrancisco's picture



B.Clinton "It all depends on what your definition of 'is' is..."

JPM "It all depends on what your definition of 'real gold' is... "

Mon, 04/22/2013 - 00:16 | 3482594 pokerplayer
pokerplayer's picture

The 10 Rules of Goldbuggery

1. Gold is a Currency: This is rule number 1. It is not a decorative or industrial metal, it is a permanent store of value, as dictated by Greeks in Lydia around 700 B.C. And, it shall be ever thus.

2. The price of gold cannot fall, it can only be manipulated lower: When gold’s price falls, it is an unnatural act. It can only occur as the result of an international cabal of Central Bankers and politicians. Its a conspiracy, and we know who the guilty parties are.

2B. If the price of gold is rising, it is doing so despite enormous and desperate efforts by manipulators to prevent the rise: This is the corollary to the prior Rule of Gold manipulation. Gold runs up despite the overwhelming opposition to it.

3. The world MUST return to the Gold Standard one day: It is inevitable that we will return to a Gold Standard. We all know this to be true. When we compare the size of the money supply to past amounts when there was a Gold Standard, we can derive prices of Gold in the $7,000, $10,000 even $15,000. Hence, we know its cheap even at $2,000.

4. Central Bankers are printing money relentlessly, and this can only drive Gold prices higher: NOTE: You must ignore, for the moment, that Gold has not gone higher for the past 2 years as Central Banks around the world have ramped up QE. This only means that ultimately, Gold will go much much higher.

5. Gold works whether the economy is good or bad: When we have a red hot economy, Gold is your hedge against inflation. When we have a bad economy, Gold is a safe harbor against collapse. It is a one way trade that never fails!

6. Gold will survive after the world economy crumbles: Gold is the ultimate currency, as it has a value that will survive even after the whole world tumbles around. Get yourself some gold coins and a Glock and you will be just fine when the whole world goes to shit. We welcome the era envisioned in the movie Mad Max.

7. Gold is a rejection of government, and their control of fiat money and finance: There are no printing presses that produce gold, it is finite, natural and God created. How much we scrape out of the ground each year is limited, and the only variable to the old equation. (Just ignore Man’s natural tendency to organize into to City-States over the past 12,000 years).

8. All Gold discussions must contain ominous macro forecasts: Your description of why Gold is going higher must consist of spurious correlations, unprovable predictions, and a guarded expectation of bad things int he future. Avoid empirical data at all costs.

9. Gold is always rallying in one currency or another: Sure, it may be down 30% in Dollars, the reserve currency it is priced in, but you can always find a currency falling faster than it does and claim you own it in that denomination. Last week, it was up in Japanese Yen. This week, it is up in Zimbabwe dollars.

10. China & India know the value of Gold; the Western world does not: The massive buying of gold by consumers in Chindia reflects the culture, intelligence and investing savvy of the people in these countries. The West doesn’t get it, and its their loss.

Bonus rule: Never admit Gold might be falling because it trades on human emotions and psychology and has no intrinsic value whatsoever.

Mon, 04/22/2013 - 01:42 | 3482694 akak
akak's picture

Got any cards in your hand aside from the jokers?

Mon, 04/22/2013 - 07:46 | 3483057 Roger Knights
Roger Knights's picture

Here's an excellent article on Seeking Alpha that rebuts Barry Ritholtz's strawman arguments:

Mon, 04/22/2013 - 01:52 | 3482721 luckylongshot
luckylongshot's picture

While western banks launching regular attacks on the price of gold flushes out the longs in the derivatives markets it is both illegal and plays into the hands of those that want physical as well as the countries that would like to see the west lose its perch on top of the global economy. This latter aspecct means that to some degree the 'masters of the universe' are shooting themselves in their feet, 

Mon, 04/22/2013 - 04:12 | 3482867 The Abstraction...
The Abstraction of Justice's picture

That depends how much of that gold they got stashed in Israel.

Mon, 04/22/2013 - 03:36 | 3482833 CHX
CHX's picture

Maybe "someone" liquidated large parts of GLD, and "hedged" in the futures marked with lots of "shorts" ??? They get the physical, and the leveraged proceeds from shorting a falling marked. win win (long "shorts" AND long the metal)

Mon, 04/22/2013 - 03:37 | 3482834 CHX
CHX's picture

double post

Mon, 04/22/2013 - 03:45 | 3482842 steveo77
steveo77's picture

As my bro used to say, Fuck the Fucking Fuckers

Mon, 04/22/2013 - 05:56 | 3482923 Watson
Watson's picture

This isn't going to make me popular:

1. The graph of the gold price since about 2005 or so looks awfully like an exponential bubble, indeed same shape (if different scale) to the top out in the 1980's (or the Nasdaq);

2. It's fair comment that a good sign of a top, massive retail participation, looks absent. Unfortunately the CB's were aupposed to have been the biggest buyers in 2012, and they are a _better_ sign of a top;

3. Despite all the complicated theories about disparity between 'paper' and physical gold prices, I still don't see why a quantity buyer just can't buy a Comex future and wait for delivery. Either you get the physical for the paper price, or you get _real hard evidence_ (not a conspiracy theory) of a problem.

4. It's fair comment that CB's creating credit all over the world is _potentially_ very inflationary. But if there is no confidence to draw that credit down (or just a lack of new credit-worthy borrowers in an environmnet stuffed full of the already over-borrowed) you could grow old and die before the potential cash is drawn down and spent. Indeed, even if cash was _given away_, I suspect many would pay down debt rather than spend it.

I think there might well be a crash, but I believe the near-term risk is not your money in the bank being eroded by (hyper) inflation, but your balances above any insured limit being lost through a bail-in.
The political will to rescue the banking system using taxpayers money is much _less_ than it was, but the system itself is just as vulnerable.

Mon, 04/22/2013 - 06:39 | 3482954 Cacete de Ouro
Cacete de Ouro's picture

Ye, this JPM report is rubbish since its using data that is not that relevant. JPM as one of the clearers in LPMCL (the London Precious Metals Clearing Ltd) knows full well about the LBMA OTC Trading and Clearing data on a daily basis, and they host one of the two 'main' commercial vaults in London under John Carpenter Street) and the comex depository below 1 Chase Plaza in NY.

So JPM knows the trading stats full well. Maybe the pawns who wrote this report are not allowed in on the real data. Poor sods...

Mon, 04/22/2013 - 07:44 | 3483052 Jalaluddin
Jalaluddin's picture

I also have my take on recent events - it is quite simple really:

We are now leaving Fantasy Land and entering Cloud Cukoo Land.


You got it cheap at 1700, others recently are getting it cheaper (if they can find it).

Sure, the "price" can be anything they want, but the Germans want their gold, and the Swiss soon too, probably; Venuzuela got its gold; no audit for Fort Knox.

Just keep buying.


Mon, 04/22/2013 - 09:03 | 3483281 Monedas
Monedas's picture

"You can pay me in gold for now .... I'll give you a week to raise the cash !" .... Yogi Monedas 1929

Mon, 04/22/2013 - 11:41 | 3483923 HeavyShadow
HeavyShadow's picture

This came from JPM...?


LOL... they're f##ked. You can't mask your filthy tracks with gear that smells like horses##t.

Mon, 04/22/2013 - 11:48 | 3483952 HeavyShadow
HeavyShadow's picture

And also, when you print fiat, and then give it to banks to wipe their greasy pork swords all over it first, then this sort of bollocks is likely to happen.

More fiat in the system in shady hands is gonna make things look more... shady.

This write up by JPM would appear to be more of the same game: Baffle with Bulls##t

Sun, 04/28/2013 - 01:00 | 3506989 Free Wary
Free Wary's picture

Help this financial ignoramus, tell me where JPM (former and remaining) physical gold shows up in it's financial statements. For example, what % of management reported assets is physical gold?

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