JPM's Quiet Scramble To Refill Its Gold Vault

Tyler Durden's picture




 

As we repoted consistently, at times on a daily basis, one of the more memorable stories of the summer of 2013, was the rampant and furious depletion of gold (both eligible and - mostly - registered) stored deep in the gold vault of JPMorgan located under 1 Chase Manhattan Plaza, since sold to a Chinese conglomerate (understandable considering China's insatiable appetite for the yellow metal in physical, not paper form). This culminated with some truly impressive multi-way vault rearrangements in which the other 4 Comex members would provide gold to JPM on an almost daily basis (see here and here). But while Chinese demand may explain the outflow of physical, what is head-scratching is the just as furious scramble by JPM to obtain gold in the past few weeks.

As persistent trackers of the CME's daily depository statistics update are well aware, over the past week, JPM has been accumulating an impressive amount of gold, and what is more curious, it has been precisely in increments of 64,300 ounces of eligible gold on a daily basis. Putting this scramble in context, two months ago JPM had only 181K ounces of eliglble gold. And yet, just today, the Comex announced that JPM's eliglble vault gold rose by almost that amount, increasing by 125K to a reputable 1.2 million eligible ounces.

JPM's total eligible holdings, and especially the recent surge, are shown below:

It bears pointing out that while eligible gold has been surging higher, JPM's registered gold has once again contracted, and as of today, it closed at its lowest ever: just 87K ounces of gold!

So with gold plunging to multi-year lows, is JPM just taking advantage of the "blood on the streets" and becoming the helpful bidder of last (or first) resort and replenishing its record low depleted inventory by taking advantage of below production cost fire sales, or... is something else going on here?

Inquiring minds want to know.

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Thu, 12/19/2013 - 18:06 | 4261965 FieldingMellish
FieldingMellish's picture

Building up inventory for the next plunge down.

Thu, 12/19/2013 - 18:09 | 4261977 Xibalba
Xibalba's picture

panic sell to me

Thu, 12/19/2013 - 18:33 | 4262047 DoChenRollingBearing
DoChenRollingBearing's picture

Does JPMorgue really have the gold?

DoChenRollingBearing has his.*

 

*But, you cannot come see mine either!

Thu, 12/19/2013 - 18:44 | 4262062 nope-1004
nope-1004's picture

I don't care what JPM does.  BRICS are buying hand over fist, so NOPE is following the BRICS.  And, of course, just out of coincidence JPM is adding to their physical stash at a time when it's "the worst time to buy"... lol.

They are buying (stealing it from the GLD).  You should be too.

Or do y'all honestly believe the big corrupt banks are going to lose?

 

Thu, 12/19/2013 - 18:45 | 4262079 JohnnyBriefcase
JohnnyBriefcase's picture

I just can't believe that they would manipulate the gold price lower so that they could buy it cheap. They wouldn't do that. What if they got caught? The penalties would be serious I'm sure.

Thu, 12/19/2013 - 19:00 | 4262113 Big Corked Boots
Big Corked Boots's picture

Well, based on the government's track record on enforcement, bankers jailed, and restitution made to injured parties, the penalties would be... nonexistent.

Thu, 12/19/2013 - 19:09 | 4262130 cro_maat
cro_maat's picture

I think you missed Johnny's dripping sarcasm. I know there wasn't a /sarc tag but it was pretty slobbery!

Thu, 12/19/2013 - 19:17 | 4262146 dryam
dryam's picture

The Fed is buying gold via JPM.

Thu, 12/19/2013 - 20:49 | 4262380 Stuart
Stuart's picture

64,300???  real physical gold is never that precise not to be without at least 2-3 decimals....I call BS on those...  It would totally fit though that even this reporting is total and utter fraudulent crap...

Thu, 12/19/2013 - 21:52 | 4262523 Payable on Death
Payable on Death's picture

Not sure, but I'd guess there's rounding. 64.3K

Fri, 12/20/2013 - 00:36 | 4262916 SafelyGraze
SafelyGraze's picture

.. and we would buy even more of the junk, if only we could source it

-jimmie diman

 

Fri, 12/20/2013 - 06:55 | 4263253 GetZeeGold
GetZeeGold's picture

 

 

 

Paging Gordon Brown........your contract with you know who.......has just come due.

 

Don't keep him waiting......you know how cranky he gets.

Fri, 12/20/2013 - 03:59 | 4263143 mick_richfield
mick_richfield's picture

They round to the thousandth of an ounce.

A transfer of precisely 2 tonnes is not possible.

Thu, 12/19/2013 - 22:44 | 4262635 lasvegaspersona
lasvegaspersona's picture

a ton is 32,150 troy ounces so were talking 2 tons exact.

Fri, 12/20/2013 - 00:38 | 4262920 Central Wanker
Central Wanker's picture

No. That means that the bars are one kilo bars whose weight is reported a bit differently.  Those bars are primarily meant for the chinese markets, but for some reason, some of them are now showing up at the JPM vault.

Fri, 12/20/2013 - 01:10 | 4262975 KickIce
KickIce's picture

For some reason tungsten keeps coming to mind.

Fri, 12/20/2013 - 02:05 | 4263032 Crash Overide
Crash Overide's picture

JPM is the accounting department of the FED and DOJ is the legal department, all the same scumbags, all the same fraud...

 

Thu, 12/19/2013 - 22:20 | 4262582 BringOnTheAsteroid
BringOnTheAsteroid's picture

when you say "governments track record" I assume you mean JP Morgans and Goldmans track record.

Thu, 12/19/2013 - 20:26 | 4262307 Papasmurf
Papasmurf's picture

What if they got caught? The penalties would be serious I'm sure

LOL.

Thu, 12/19/2013 - 20:24 | 4262308 Papasmurf
Papasmurf's picture

What if they got caught? The penalties would be serious I'm sure

LOL.

Thu, 12/19/2013 - 20:29 | 4262317 El Hosel
El Hosel's picture

"They" get caught.... LOL

Untouchable career criminals don't get in trouble, they make the rules for the "regular people".

Thu, 12/19/2013 - 20:36 | 4262335 nwowatcher911
nwowatcher911's picture

30+ ups ? 31+ paid trolls..... trolololololololol!!!!!!!

Thu, 12/19/2013 - 21:55 | 4262526 heron
heron's picture

Indeed.  Blythe said that would be wrong and they don't do it.

Fri, 12/20/2013 - 10:03 | 4263500 drdolittle
drdolittle's picture

At least like five figures

Thu, 12/19/2013 - 18:48 | 4262082 kliguy38
kliguy38's picture

correct.......

Thu, 12/19/2013 - 18:51 | 4262088 cro_maat
cro_maat's picture

My bullion dealer in NYC (Chinese BTW) is routinely sold out of physical gold by lunch time each day. I stop by most days at lunch. I have been told that JPM private clients are coming in and buying physical at the suggestion of JPM brokers. Now why would the JPM Private Client Group recommend to their best clients to buy physical from a Chinese coin and bullion dealer when JPM can put them in their vaults as eligible or registered? Somethings fishy in Denmark.

Thu, 12/19/2013 - 19:00 | 4262114 DoChenRollingBearing
DoChenRollingBearing's picture

Hmm, indeed...

Thu, 12/19/2013 - 19:07 | 4262119 cro_maat
cro_maat's picture

Last Friday a JPM client bought 55 American Eagles with a bag of cash ($70k). It took them most of the afternoon to count. Today when I went by at lunch not only had all of their stocks in the back been sold but even the display cases fronting on Wall Street were empty. I keep ordering my piddly amounts of silver and the price slamdown continues but I know that one day soon I will walk in to place an order and will be told that there is none to be had.

Thu, 12/19/2013 - 19:39 | 4262199 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

The problem I have trying to buy silver eagles on these dips at my local coin store is that the price never really drops, the premiums just go up.  Frustrating!

Thu, 12/19/2013 - 19:57 | 4262242 cro_maat
cro_maat's picture

Your dealer doesn't have a good source then. I deal through a large Chinese dealer that recently set up shop in the U.S. The refiners all want access to the insatiable demand in the East and so are giving them very good terms here in the U.S. in order to get access to China. I routinely buy good quantities for myself and friends and as a regular customer have been given a preferential premium over Ask.

Thu, 12/19/2013 - 20:44 | 4262360 BigJim
BigJim's picture

Beware! Is there a dumpster out back full of broken incandescents?

Fri, 12/20/2013 - 11:27 | 4263765 ParkAveFlasher
ParkAveFlasher's picture

Yo cro_maat, buddy, ol' pal, what's the place called?  Might have to make a visit...

Thu, 12/19/2013 - 21:22 | 4262459 Boston
Boston's picture

Skip the local coin store. Buy online----lots of inventory and far lower premiums.

Thu, 12/19/2013 - 22:55 | 4262667 DirkDiggler11
DirkDiggler11's picture

Boston:
When I drop in my LCS to purchase ASE's, I hand over fiat FRN's that are worth less each day, and they hand me shiny coins that actually retain value and have never been worthless. You know, I normally just walk out of the store, no receipt or anything, just like the transaction never took place ....

Thu, 12/19/2013 - 22:58 | 4262675 Papasmurf
Papasmurf's picture

Skip the local coin store. Buy online----lots of inventory and far lower premiums.

There's no risk there, is there?

Fri, 12/20/2013 - 11:02 | 4263703 Sonic the porcupine
Sonic the porcupine's picture

Do they ship for free?

Fri, 12/20/2013 - 13:05 | 4264139 Jeepers Creepers
Jeepers Creepers's picture

Fortunately, i finally found a good local dealer, but if it wasn't for him, I'd probably buy more online as well.

I know some areas, it's almost like a cartel where they charge unrealistic premiums or have no inventory.  What I hear some people paying is absurd.

I understand the appeal of an all cash transaction, but at the same time, I think you're better off taking your chances online if it means more stacking.  Most of the reputable places have the same views we do when it comes to privacy.  And if there ever was some sort of stormtrooper "gold roundup" there's always boating accidents.  Or you could just say you sold it all to one of those out of business "Cash for Gold" places.

 

I just wouldn't let myself get shut out by shady, local coin dealers

 

 

Thu, 12/19/2013 - 23:15 | 4262739 LapseOfReason
LapseOfReason's picture

End of the year the mint stops production, keeps premiums high. Jan/feb they should go down. A registered dealer gets them for Two dollars over spot. I think they have to buy 25k ounces though.

Thu, 12/19/2013 - 20:28 | 4262311 juggalo1
juggalo1's picture

It took them most of the afternoon to count 700 dollar bills, or 70 coins?  Why would it take so long?

Thu, 12/19/2013 - 20:43 | 4262364 BigJim
BigJim's picture

They paid the $70k using dimes, obviously.

Thu, 12/19/2013 - 20:53 | 4262394 El Oregonian
El Oregonian's picture

Dime bags of what might I ask? LOL

Fri, 12/20/2013 - 07:26 | 4263260 new game
new game's picture

exactly-lol, had to count over and over as dimes and eight balls were gone-but we sure had a good time-hehe; oh the good ole days- blow all nighter pussy and sun rise to a bottoms up fucking i don't give a shit - oh yea - rock on as rock will never die in my head...

thanks neil and mick...

Thu, 12/19/2013 - 22:02 | 4262542 Tim_
Thu, 12/19/2013 - 19:05 | 4262115 Arius
Arius's picture

if thats true then gold has no role to play in the next monetary system .... i doubt it though to be true. 

the last ones to know the truth are the clients, and the JPM account managers right before them by multiseconds...

 

or do you really believe on what they teach in school about clients, their money etc.... and how JPM managers are the best .... that is the books my friend...

Thu, 12/19/2013 - 19:26 | 4262168 Four chan
Four chan's picture

then a chink the armor may be shown, you cant hft your way into physical,

that takes direct and slow purchases with the worthless stuff.

Thu, 12/19/2013 - 19:52 | 4262232 cro_maat
cro_maat's picture

I believe that JPM cares not one whit about their clients except where they can fleece them. All I am reporting is what my dealer (who has never lied to me before) has conveyed to me and what I what I have seen with my own eyes (empty showcases because their back vault was emptyed and the customers didn't want to wait until the next delivery and so took all of the display case gold). Maybe these clients have gold stored at JPM, have demanded delivery and JPM has cash settled them so that they have to walk down the street to buy in their physical. I don't know the back story but what broker / FA would tell their client to buy physical gold outside of JPM when they could sell them GLD or a Comex futures contract or a vault contract? Unless...

You can write this off if you like and consider me naive but I have been working in finance for 25 years and have not seen such strange occurances. Since you value gold so little you should sell it to the many stackers on this site. The more I see of this manipulated madness the more physical insurance I want to load up on.

Thu, 12/19/2013 - 20:45 | 4262372 BigJim
BigJim's picture

Every time I look around and wonder if I was a fool to load up on PMs over the last 5 years, I ask myself - what should you buy now instead?

And wind up buying more...

Thu, 12/19/2013 - 21:17 | 4262453 Spitzer
Spitzer's picture

You got fooled into buying the most marketable good on earth. /sarc

Thu, 12/19/2013 - 21:34 | 4262490 Four chan
Four chan's picture

amen big jim.

Thu, 12/19/2013 - 23:26 | 4262773 chindit13
chindit13's picture

JPM Private Wealth's real "best clients" do not buy at retail coin shops.  $70K is chump change.  If you've "been working in finance for 25 years", then you know that.

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