Just What Is Going On With The Gold In JPMorgan's Vault?

Tyler Durden's picture

We know that back in early October 2010, when gold closed at a then record high of $1,320, JPM decided to reopen its previously mothballed precious metal vault due to soaring demand for metal vaulting, thus becoming only the fifth official Comex private gold depository in New York in addition to HSBC, Bank of Nova Scotia, Brinks and MTB (and of course the New York Fed).

We also know, courtesy of a Zero Hedge exclusive, that the JPM vault - the largest private gold vault in the world - is located at 1 Chase Manhattan Plaza, and is literally adjacent to the vault of the New York Fed 80 feet, and 5 sublevels, below street level.

We know that for a long time the vault held around 2.5 million ounces of eligible (commercial) gold, a number which declined only gradually until very recently.

We know that the total amount of registered (investment) gold has been steady for the past 4 years (after peaking in early 2006).

Finally, everyone knows that in the past month gold has experienced a very severe move lower which is still largely unexplained.

What many may not know, is that while registered Comex gold has been flat, the amount of eligible gold in Comex warehouses (the distinction between eligible and registered gold can be found here) in the past several weeks has plunged from nearly 9 million ounces, to just 6.1 million ounces as of today- the lowest since mid-2009.

What nobody knows, is why virtually the entire move in warehoused eligible gold is driven exclusively by one firm: JPMorgan, whose eligible gold has collapse from just under 2 million ounces as of the end of 2012 to a nearly record low 402,374 ounces as of today, a drop of 20% in one day, though slightly higher compared to the recent record low hit on April 5 when JPM warehoused commercial gold touched a post-vault reopening low of just over 4 tons, or 142,700 ounces.

This happened just days ahead of the biggest ever one-day gold slam down in history.

Some questions we would like answers to:

  1. What happened to the commercial gold vaulted with JPM, and what was the reason for the historic drawdown?
  2. Gold, unlike fiat, is not created out of thin air, nor can it be shred or deleted. Where did the gold leaving the JPM warehouse end up (especially since registered JPM and total Comex gold has been relatively flat over the same period)?
  3. Did any of this gold make its way across the street, and end up at the vault of the building located at 33 Liberty street?
  4. What happens if and/or when the JPM vault is empty of commercial gold, and JPM receives a delivery notice?

Inquiring minds want to know...

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observer007's picture

No bubble on the gold market

We have compared the current gold price trend with previous bubbles and argue against the view of bubble formation. The fundamental environment of ultra-loose monetary policy, low real interest rates and the threat of a global depreciation race continue to speak for a rising gold price.

http://homment.com/gold-bubble

PoliticiansDontThinkLongTerm's picture

Can somebody explain how upon the opening of JPM's vault 100% new demand was created? The share of the other vault remains more or less equal.

CDNX fan's picture

#1 RULE in trading gold: IGNORE TECHNICAL ANALYSIS

BUY breakdowns and SELL breakouts.

Why? Because it is rigged, of course.

theprofromdover's picture

Well, you see, if Jamie doesn't have any gold when someone comes to collect, he can just make a call to the new guy in Treasury and ask for a bail out.

If he has the gold, he probably got to hand it over and take the hit. So why keep any, a piece of gold paper is so much easier to file.

goldenbuddha454's picture

Should read "What's going on in Ny Fed's Gold Vault?".

goldenbuddha454's picture

Hey, Jamie, can we borrow that gold so we can just calm the situation with Germany for a while?  They're wondering about that 7 year deal we talked about.

eclectic syncretist's picture

Thank you Tyler's, and kudos, for investigating and shedding better light on this most interesting topic.

I've been following this on a day by day basis and it's as if JPM is on a one way trip to zero (that's going to be over real soon) in terms of it's publically declared PM holdings.

sawman's picture

Hi Mr Dimon. Just give us the tiny remnants of other peoples physical gold that you have left and then go burn in ponzi scheme hell. Liars and theives > that's why they are richer than us.

Seize Mars's picture

Good catch. You can bet there threats involved.

forwardho's picture

Not making this up.

On a Miami am radio station 04/24/13 There was a commercial for  "the investment of the decade"

"get in, on the bottom floor of an investment that could return up to 24x it value"

The investment?

Tungsten.

You could not write better comedy, I damn near crashed as my eyes watered.

New_Meat's picture

same ad on radio in Boston and Providence.

MeelionDollerBogus's picture

PRICELESS.

Filed under “you can’t make this shit up” and honestly, if you can find who did the radio ad and send some info over to Jim Comiskey, or just reply here and I’ll send it, he puts up the absolute funniest things on youtube about this kind of thing. One of his others (he did actually make it up) is: The Americans with No Abilities Act –

http://www.youtube.com/watch?v=TLs3_W0Zipg

priceless!

Quinvarius's picture

I think JPM is being forced to pony up for double counted GLD redemptions.  Whether they borrowed it or rehypothocated it, they are being forced togive it back.  I think after the whale trade, the Fed/Treasury lost faith in JPM.  They are no longer being blindly supported.

chinaboy's picture

whale trade in the making, or baked in the 'cake'.

Ranger4564's picture

Like I said previously, I believe JPM will eventually be crashed. Goldman will be the last bank standing. This is perhaps another step in the process of planting the bad bank meme. Crash JPM. :-)

e.blair's picture

They had to ship gold to Putin to get him to back their Boston story.

eclectic syncretist's picture

Some more interesting numbers to consider.

JPM lost another 3.5 tons of gold from their COMEX inventory again yesterday. 

Overall, 8.5 more tons of gold disappeared yesterday, or another 2.8 percent of the total COMEX inventory, on top of the 2.3 percent that disappeared the day before. 

In the past ten days (the time since the orchestrated crash) the total gold inventory at COMEX has declined from 316 tons to 286 tons, or by about 10%. 

KingdomKum's picture

we few,  we happy few,  we band of silver holders  .  .  .

Bearwagon's picture

We chaingang of silver holders . . .    ;-)

Heartstone001's picture

I can almost bet there will be a couple of airplanes flying into the vaults at JPM and the "gold" they do have in the vaults will dissapear like the gold under the twin towers! Then everybody will go after some cave dweller and blame him for the destruction of the vaults and all the ghost Gold JPM had! JPM IS THEN OFF THE HOOK! Any takers on that bet? LOL