JPMorgan Helps Comex Avoid Gold Depletion, Boosts Registered Gold By 78% Overnight

Tyler Durden's picture

Earlier this week, when observing the most recent drop in Comex registered gold as a result of a reclassification by the gold vaults of JPM and Brink's of 25,386 ounces of registered gold into eligible (alongside the withrawal of 200,752 ounces of eligible gold from JPM), we wondered if Comex "may be on the edge" since after the adjustment, Comex registered gold had dropped to a never before seen low of just over 10 tons, resulting in record high gold coverage ratio of 124 ounces in outstanding gold open interest for every ounce of physical.

 

To be sure, we had no explanation for the drop, but we did muse that "the mainstream press will once again start paying close attention to the total, and especially registered, gold held at the Comex: at a pace of 25K a day, the gold vaults that make up the CME's vaulting system would be depleted in just under two weeks of daily withdrawals."

And while the mainstream press has certainly not opined on the peculiar events at the Comex, we have been paying particularly close attention to the daily Comex gold updates, and is probably why we were less than surprised to see that just 2 days after our report, the Comex once again succeeded in sweeping default fears under the rug by boosting its eligible gold by a whopping 78% overnight, from 362K ounces to 643K, thereby pushing deliverable gold from its all time lows.

 

However, this was not achieved with an infusion of actual new gold into the Comex, but thanks to JPM reclassifying 276K ounces of gold from the Eligible into the Registered category, even as actual eligible gold continues quietly hemmorhaging out of the Comex.

So the gold can was kicked again, but for how long? And will JPM be as eager to continue "adjusting" eligible gold into registered if the recent trend in gold redemptions not just in its vault, but across all Comex gold warehouses continues?

For the answer, keep checking this website around 3pm every day for all the latest gold moves in and out of the Comex.

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Kaiser Sousa's picture

HA, HA......

"The Road" is near.

if u dont have any u better get some cause they dont have any REAL MONEY...

DEATH TO THE MONEYCHANGERS.

 

Took Red Pill's picture

 "just 2 days after our report, the Comex  boosting its eligible gold by a whopping 78% overnight"

They must read ZH!

nuubee's picture

That's a lot of barbarous relic trafficking, I hope they have the right permits.

Urban Roman's picture

Well what do you know, they found some in the trash basket in Corzine's old office.

(never mind that he never had an office there)

(and, good thing they never got around to emptying the trash basket)

Captain Debtcrash's picture

Good to see gold going up on a day that equities are going down.  Anyone who is foolish enough to think that precious metals don't deserve a place in a portfolio are not paying attention, and advisors or commentators who say the same are deluded or have an agenda.

strannick's picture

Wonder whose eligible just became registered?

BaBaBouy's picture

CHECK Out RoyalGold Is Buying Big Chunk Of Future Production Of Barrick (GOLD&SILVER) With Massive UP-FRONT Cash. Why? Are They Worried About Future Phys Supply??? Who Does Royal Sell Its GOLD To???

 

Barrick, Royal Gold unit enter Au, Ag streaming deal

2015-08-05 17:15 ET - News Release

Also News Release (C-RGL) Royal Gold Inc

Mr. Andy Lloyd of Barrick reports

BARRICK ANNOUNCES STREAMING AGREEMENT WITH ROYAL GOLD

Barrick Gold Corp. has entered into a gold and silver streaming agreement with RGLD Gold AG, a wholly owned subsidiary of Royal Gold Inc., for production linked to Barrick's 60-per-cent interest in the Pueblo Viejo mine. In return, Royal Gold has agreed to make an upfront cash payment of $610-million plus continuing cash payments for gold and silver delivered under the agreement. (All amounts are expressed in U.S. dollars.)

Under the terms of the agreement, Barrick will sell gold and silver to Royal Gold equivalent:

  • To 7.5 per cent of Barrick's interest in the gold produced at Pueblo Viejo until 990,000 ounces of gold have been delivered and 3.75 per cent thereafter;
  • To 75 per cent of Barrick's interest in the silver produced at Pueblo Viejo until 50 million ounces have been delivered, and 37.5 per cent thereafter. Silver will be delivered based on a fixed recovery rate of 70 per cent. Silver above this recovery rate is not subject to the stream.

Continuing cash payments to Barrick are tied to prevailing spot prices rather than fixed in advance, maintaining material exposure to higher gold and silver prices in the future. Barrick will receive continuing cash payments from Royal Gold equivalent to 30 per cent of the prevailing spot prices for the first 550,000 ounces of gold and 23.1 million ounces of silver delivered..........

RaceToTheBottom's picture

Poor Ukraine, lost their gold for the good of the banksters....

 

Greece is fighting tooth and nail to not let theirs go the way of the Banksters

gatorengineer's picture

They are getting ready for the S&P ramp and gold slam......  Appearance of liquidity to sucker retail in.... Rinse and repeat.

Antifaschistische's picture

So, last week on our episode of 'do you really have the gold you think you have'

 

123 out of every 124 gold investors, did not really have the gold they though they had.

the great news..

this week, only 85 out of 86 investors, who think they own gold...don't really have any gold....excellent!!

froze25's picture

Does anyone know how to demand delivery of gold from COMEX?  I mean if I buy an ounce of paper from them and I want it delivered.  A article on that would be great so that we can just start buying from them for the paper price and further drive them into default.  Unless I am completely off here and don't have a clue about what I am talking about.

lehmen_sisters's picture

The thing is, commodities futures can be delivered in cash instead of physical....So if they can get cash, they can deliver that instead of gold. 

froze25's picture

Love the avatar, I am a Gov't Deportment Head and a Libertarian just like Ron.

lasvegaspersona's picture

Just buy physical gold anywhere. Gold is fungible. Think of it as all in one big pot. When you take yours out of the pot there is less for the system to fulfill it's needs.

Better do this soon. GLD inventory is down to below half (667 tons) of what it was at peak (1353 tons Jan 2013). Who knows where the bottom really is? I suspect we will wake one day and a lot of paper gold will be shut down perhaps 'due to lack of interest' in gold.

agstacks's picture

I believe the lot sizes are 100oz for gold and 5000 oz for silver. That would be 1 contract.

Peak Finance's picture

There are new gold mini's and gold micro's that trade as well now, not sure of the lot sizes. 

AllMightyDollar's picture

Silver is a 1000 ounce contract

SameAsItEverWas's picture

Silver is a 1000 ounce contract.

Yeah, there is such a thing, but none of the mini-silvers (YI, QI, or SIL) and none of the mini-golds (YG, QO, MGC, or GCK) are deliverable; all of the minis of gold and silver settle in cash only!  And it's been that way for ever.

But SI at 5000 ozt silver is deliverable; and GC at 100 ozt gold is deliverable; SI and GC are the only deliverable gold and silver contracts on COMEX. And it's been that way for ever.

http://www.cmegroup.com/trading/metals/precious/silver_contract_specifications.html

http://www.cmegroup.com/trading/metals/precious/gold_contract_specifications.html

Antifaschistische's picture

eventually, it's a supply chain issue....so just go to a local coin place, or apmex.com, or ebay...and buy a 100 gram bar, or a 1000 gram bar...at some point it starts at COMEX

SameAsItEverWas's picture

Does anyone know how to demand delivery of gold from COMEX?  I mean if I buy an ounce of paper from them and I want it delivered.  A article on that would be great so that we can just start buying from them for the paper price and further drive them into default.  Unless I am completely off here and don't have a clue about what I am talking about.

You absolutely can't "drive them into default" by standing for dellivery. Reason is that COMEX can always settle in cash, which in practice means they'll offer you a slight premium and then unless you want to pay a lot of big legal bills you'll take the cash instead of insisting on gold.  You can't buy a single ounce either.  A gold contract is 100 ozt, which means you could get one 100-ozt bar or maybe three kilo-bars instead, with purchase price being based on exact weight.

In 2011 Gerald Celente stood for delivery on gold but he got screwed with the demise of MF Global.  See http://www.businessinsider.com/the-truth-behind-how-gerald-celente-got-screwed-by-mf-global-2011-11  Search internet for "celente 2011 gold delivery"

And you can't just drive up someplace and have them hand you bars after you sign some papers.  It has to be picked up by an armored car, which would costs some hundreds of dollars just for that, plus whatever your brokerage and others also charge you for the privilege. 

More recently in 2014, "Turd Ferguson" tried doing the same thing and stand for delivery on gold: http://www.tfmetalsreport.com/blog/6393/november-delivery-comex-odyssey

Seek and ye shall find.

Latitude25's picture

I read your TF link.  It wasn't TF.  It was some mystery buyer.

SameAsItEverWas's picture

I read your TF link.  It wasn't TF.  It was some mystery buyer.

"Turd Ferguson" is an alias, bozo!

Latitude25's picture

Of course TF is an alias.  OK quote me the statement where it is indicated that the real guy(Craig Hempke or whatever his real name is) was the buyer.

crickets

By the way I like your style.  2 ZH personalities to upvote yourself and downvote others.  I think I'll try that for apparent popularity.

Tall Tom's picture

So do you really believe that CME Group is going to destroy many of the naked contracts?

 

Or do you believe that CME Group's vaults are going to become flush with Physical Supply from who knows where???

 

Or do you believe that the USA will pull off a China and stop the trading of Gold Futures on the COMEX?

 

Or do you believe that it will be some combination of the three, I MISS KUDLOW?

 

That is how the current situation can be resolved...unless you have somehow discovered a method of the realization of the alchemist's dream of transmuting Physical Paper into Physical Gold.

 

Technical Analysis, without an understanding of the underlying market fundamentals, is MEANINGLESS.

 

It is apparent that you LACK UNDERSTANDING...or are just joking...

 

BUT IT IS NOT A JOKE...IT IS SERIOUS...AND IT DOES HAVE PROFOUND IMPLICATIONS.

 

If the SUPPLY of the available contracts are diminished, and, if DEMAND for contracts remains at the same level, then the PRICES FOR THE AVAILABLE CONTRACTS will INCREASE. This is NOT in the interests of the CME Group as the Cash Settlements for undeliverable contracts will also have to increase.

 

On the other hand if the SUPPLY of contracts are INCREASED and if DEMAND for the contracts remains at the same level, then the PRICES FOR THE CONTRACTS will DECLINE. This IS in the interests of the CME Group as the Cash Settlements for undeliverable contracts will also decline.

 

The LATTER OPTION, being in the interests of the CME Group, is much more likely to manifest, concurrently as the supplies of Physical Gold, available for delivery in the CME vaults become depleted. The expenses of CASH SEttlement decline an in the interests of the CME Group this is the least expensive method of entering into a DEFAULT.

 

Are you a trader or a pretender, I MISS KUDLOW?

 

The sad truth is that the Spot Price for Gold, based upon a fraction upon the price of a CME CONTRACT, is no longer a valid method of determining price. It is no longer valid as to Price Discovery. The CME Group has lost most of their credibility at this point.

 

This has become most apparent at Gold and Silver vendors of PHYSICAL METAL across America where hefty premiums are being exacted, or, where that is not happening, the vendor's supplies are depleted and they have NO PRODUCT on the shelves for sale.

 

Personally I have EXPERIENCED this developing phenomena as my Primary Dealer's supplies are depleted and he does not charge a high enough premium to keep supplies on hand.

 

In fact I plan to discuss this development with him this  afternoon when I visit and request that he starts increasing his premiums to the public to what the market will bear.

 

This planned discussion is much to the chagrin of the pawn broker who has his shop located below my residence as he...

 

#1 uses the same Primary Dealer that I use, and,

 

#2 who has been enjoying the discounted prices of product from my primary dealer and,

 

#3 who has been making boatloads of revenue off of the arbitrage of the deal.

 

However I have a personal interest in keeping my primary dealer both healthy and profitable as that is an important source of my bread and butter.

 

As for the pawn broker, well, he can arbitrage elsewhere.

 

Oh I understand that is is an anecdotal report. But I have read similar accounts elsewhere.

 

The physical shortages on both Gold and Silver are both quite real and profound. The existing available metal is available where hefty premiums are existing. Delivery times are delayed and are increasing.

 

So please do tell me about that "Double Top", I MISS KUDLOW, after you have read about the underlying fundamentals present in the REAL WORLD.

 

 

ebworthen's picture

I wonder if they put hay on pallets shrink wrapped with gold plastic and made it look real heavy while they moved them; or if this was all just done with some key strokes and an ethernet zap of binary digits and some signatures of hollow men on paper?

ParkAveFlasher's picture

JPM is in the pet rock market?  Sheesh, they're into everything!

Glass Seagull's picture

 

 

Deliverable gold.  Lol.  When JPM is the short that controls the delivery process, and cash gold is over prompt futures, who really thinks they'll get gold through the comex futures? 

JPM is ensuring this will not happen...if they have to shake out every long and assume every short GC futures contract:  they'll do it.

Bay of Pigs's picture

We know better by now than to accept this kind of ridiculous gold propaganda as fact (CME chart).

I doubt JPM "boosted" anything with actual physical gold. Just moar paper shell games via the fraud ridden and totally corrupted COMEX.

Glass Seagull's picture

 

 

right, but they're just working within / arbing the framework of the phys gold vs comex futures.  That's it.  What short is going to intentionally deliver (notify to deliver) gold into a futures contract that is trading below spot phys?  Short will always either sell into phys market, or just close/roll short.

Short just "being a rational agent" in this respect.  IF (huge if) we see a structural change in the gold spot/fin upfront backwardation (carry GC market), then short's rational decision is to deliver gold against the contract which is > spot.  Until then, buyers getting phys via comex futures delivery just won't happen much at all.

 

 

 

Consuelo's picture

++ GS

 

I like the term: 'They'll' - as in: 'They'.   As in: More than (1) entity.   As in: An 'arm' of another entity.   As in: An entity who must protect the image of something - at any and all costs in order to avoid a cascading implosion of LIES and the consequent near immediate destruction of $confidence...

 

 

Seasmoke's picture

Tick Tock Jamie Dimon. Tick Tock ......

Tall Tom's picture

In addition...

 

Tick tock, Jeffery Christian, tick tock....

Bear's picture

Where are the Hunts when we need them ... with a few billion of deliveries this market would explode

AL_SWEARENGEN's picture

The fact that this has not happened (yet?) in the Gold or Silver markets says to me that there exists an understanding among players with deep pockets that have the ability to do this.  And that understanding is this, crash the comex by demanding large deliveries and you find yourself on the red list.

jakesdad's picture

you know I don't know that it would be in his best interest either politically or personally (financially) but trump is in a position to pull off such a stunt...

 

"say hello to my littlle friend!"

Deathrips's picture

A move by one big in either silver or gold market, turns all other bigs into zimbabwe trillionaires.

 

RIPS

Ham-bone's picture

On the front end is declining population growth - the middle is mounting debt, leverage, manipulation to hide the slowing growth - the back end is gold / silver price dislocations.

I believe it all starts globally here...

http://econimica.blogspot.com/2015/08/the-imminent-demographic-collapse.html

and domestically here...

http://econimica.blogspot.com/2015/06/0ne-simple-chart-explains-great.html

 

froze25's picture

Harry Dent's book, "The Demographic Cliff" goes into good detail on this subject.

Ham-bone's picture

There is certainly no way Ben and Janet aren't aware of this info...but given this, their actions to boost debt and leverage onto the under 40yr/old generation of declining population looks so much more criminal???

macambaman's picture

More pet rocks were registered. No problems.

GRDguy's picture

Notice that JPM doesn't say from what vaults the gold is coming from.  I get the feeling they're recycling gold from their Chinese vaults; you know, the gold that was in the U.S. previously.  I doubt anyone inspects those vaults.  It's probably all paper shuffling anyway, at 124:1 per ounce.  As far as the London prices go, who knows who is buying and selling.  Probably agents for the same group, with any losses made up by skimming the paper promises world-wide.

Tinky's picture

Registered, eligible...just two sides of the same paper coin.

Bluntly Put's picture

I have to stop reading these kinds of articles, all they do is raise my blood pressure. I'm so sick of all the lies comex, jpmc, gs, etc tell everyday.

fockewulf190's picture

One billionaire who loves phyzz,  just one, from anywhere, and this shitshow ends pronto.

Pumpkin's picture

All billionaires know, they would get no gold and probably no money, once they blew it up.

Anopheles's picture

Billionaires have no love or need of phyz gold. 

 

If they did believe in phyz, they wouldn't be billionaires, they'd be just a bunch of poor people rubbing a couple gold coins together.  

semperfi's picture

get back to me in 6 months

Latitude25's picture

Kyle Bass.  I just can't seem to find a link to that photo of him with big bar of gold on his desk.

Latitude25's picture

I guess those supposed owners of eligible are screwed.