9,173 Ounces Of Gold Transferred From HSBC To JP Morgan Gold Vaults Overnight

Tyler Durden's picture

While we have no information as to who or why (we do know when and where) engaged in a transfer of 9,173 ounces of eligible gold (for a total of about $16.5 million) from HSBC's gold depository into that of JP Morgan, according to today's closing CME Group Metal Depository Statistics, we can merely point out that it happened. One back of the envelope hypothesis: we have counterparty risk at the bank level (which is currently manifesting itself at both the CDS, the stock price, and the Li(E)bor level) are we going to start seeing counterparty concerns at the gold depository level next? What next: a run on the [    ] gold depository in a self-fulfilling prophecy? The second hypothesis is by now well known- JPM needs all the gold it can get. But a paltry 9,173 ounces? Of course, the last hypothesis is that the two precisely 9,173 ounce transactions are in no way related.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
A Lunatic's picture

A bird in the hand, Bitchez

Fish Gone Bad's picture

9,173 ounces?  WTF is that?  It looks like they are not even trying, then again, maybe they are trying and that is all (the gold) that is there ...  That is just downright creepy when you think about it.

knukles's picture

Probably also the reason for the Russians borrowing gold.... there's One Big MF'n Short Out There.

Smiddywesson's picture

My guess is there has to be cooperation when prices are manipulated.  And when prices are manipulated to the extent that they were this week, it requires a whole lot of payback.

Prices rebounding to $1830 so quickly also underscores how far this game has progressed.  Margin hikes and gimmicks yielf diminishing returns, both in price and duration.  The manipulators are inviting a much more determined type of speculator onto the other side of the trade.

Thomas's picture

This is peanuts. I can't see the news in this one.

HoofHearted's picture

Aren't we glad we decided to BTFD when it hit 1705 this week? Aren't we glad we've been buying the dip when gold was half the previous price? And aren't we ready for the pitchforks, tar, and feathers at one Bejamin S. Bernanke's house?

Hulk's picture

Gold will be the last man standing...

cheesewizz's picture

The real story is HSBC is redecorating there vault, The old green paint and rug is clashing with the pretty gold bars. "Oh my god, What a disaster"

DCFusor's picture

Look, we assume all these guys are evil - that's a given.  But really, who would be insanely stupid enough to be hugely short PMs in a time when you KNOW the printers are and will continue to print.  Tha'ts a level of delusion well beyond the thinking that created the financial crisis in the first place.  And then hold that short through a more or less unabated rise in the PM's?  Hell, any trader would have covered long before the first expoential runup in silver...or get fired at most places.  I hereby turn in my tinfoil hat on that "big short".  I can much more easily believe there's a real shortage of the underlying physical for other reasons, due to the tricks the ETF's play.  You can't make a logical construct otherwise.

If they're so smart as to be able to keep the secret of how big the shorts are and who they are -- then they're smart enough not have them in the first place.  Duh.  If they're that dumb, why hasn't this been documented chapter and verse?  Can't make it add up.  I could almost believe enough overconfidence in their ability to manipulate to make the short work - at first, but not until now when it's obvious it won't.

Fantasy is not good for making smart trades.  I can see why a lot want to believe it, but not why it would be actually true.  If anything it's misdirection from something more important that IS still a secret and important to someone.


A Lunatic's picture

You aren't by chance eating peas right now are you?

falun bong's picture

They're not short because they want to profit on that trade. They're short because they really really need people to like all the rest of their paper; FRNs, stocks, bonds, etc. If people fall in love with shiny stuff instead then their paper kingdom is threatened. So they do everything they can to lower the price of shiny stuff.

Next question?

FreedomGuy's picture

They could be short because there is money to be made selling gold that isn't there. Eventually they need to reconcile, preferably selling fool's gold when the price isbhigher and buying to cover on dips.

quebecgold's picture

Dumb money flows to Treasuries,

Smart money flows to Gold,

Everybody sells stocks.

IQ 145's picture

Perhaps. London is closed Monday. 9100 eligible ounces can cover many, many more than 91 contracts; maybe just a little goodness to be sure of things on Monday.

theMAXILOPEZpsycho's picture

Word on the street is that Chavez already has his gold, and just anounced it in retrospect like a hedge fund manager would

Snidley Whipsnae's picture

Yeah, levered 100:1 it becomes a respectable, if imaginary, stack...

max2205's picture

Lybian gold moving already

blingblingbert's picture

That is a lot of gold for a single person to be traded. But if you take into account all the big institutional players in the game it is peanuts. This may just be some hedge fund manager doing wholesale business for his smaller clients. I see no huge effect on the gold market because of this. Furthermore when we don't know who is in the deal and why, we really have no way on knowing where either because it may just be an off shore account for some mysterious foreigner. You have to keep in mind that this is a big world and there are 7 billion people. $16.5 million isn't really anything. Thousands of people trade this and more through a futures trading broker. You couldn't give a tenth of a penny to every living person on this planet with $16.5 million. In my humble opinion this amount of gold is only enough to get attention because it is a little out of the ordinary for this amount of gold to be traded at once. When you look at the amount of gold traded in an entire day, today is must slightly above average. By the end of the month you will see that it does little to break from the current trend. There are so many people right now living at the bare minimum that there is nowhere to go but up. In the world stage, yea some people in powerful positions screwed up and caused a financial crisis. But in the end they are still only going to want a plate of food every day and as long as we can do that we'll be fine. Tough times are tough times. Nothing else to it.

rocker's picture

I remember a contributor on Fast Money Option Action opine on a Run of the Banks in America.

He then shook his head and said Naaaah.    Never say Never !!!

BlackholeDivestment's picture

...what would you do if you knew a WMD event was in the work as a JP Morgan etc...?

...what will happen to the dollar after? up or down?

...would that event be more affective when it takes place in Europe or in America?


edotabin's picture

Major transfer, bitchez!

oobrien's picture

How long till the Great Recession ends?

I'm guessing 10 years.  I think the baby-boomers have to start dying out first.

Anyway, God bless.


rocker's picture

We are "Worse than Japan Now."

Oh Yeah, just in case anyone forgot. Look at what Japan's stock market did in their first twenty years.

We are only ten years old in Japaneese Years. 

Smiddywesson's picture

We are also worse than off Japan because any single country in trouble now is not in a booming world economy like Japan was when their troubles started.

All economies are linked now.  There aren't any healthy economies to assist in pulling any single ailing economy out of the mud.

This is a self reinforcing situation that is likely to worsen over the course of many years.  The system is unsustainable, and the only people with the power to change it are the ones who benefited from the old system.  We all know where that leads.  Systemic collapse. 

I think that is why TPTB are buying gold.  They are going to switch us to a new system.  I don't think we will like the new system any more than the last, but I don't see any other alternative from their perspective.

Hulk's picture

Gold will be the last man standing...That should be clear as a bell to everyone at this juncture...

FeralSerf's picture

Gold's already the only serious real store of value standing if one has the means to really protect or hide their stash. The uber wealthy do.

Real estate is at the mercy of local governments. Silver is too small a market. Diamonds are too easily counterfeited. Paper assets are just that -- paper. Other commodities are too difficult to store and/or too much at the mercy of the economy or just paper representations of wealth.

FatFingered's picture

"Silver is too small a market"
I hear this argument all of the time. It makes no sense to me. Silver has many uses for which there are not currently any good substitutes. The market is tiny because we used it all up and the price is too low. Available public information depicts gold being more prevalent than silver. So, shouldn't silver simply be valued somewhere closer to gold so the market would be bigger? Could somebody please explain this argument to me?

FeralSerf's picture

Gold doesn't get used up.  Silver, like platinum, rhodium, and palladium, does. The total valuation of above ground gold is many times that of silver.  It's the same story with the other PMs.  Gold is money.  The other PMs are just that: "precious metals".  They probably will be valuable as trading material, but they're not money.

"Money is gold, and nothing else” was said by John Pierpont (J. P.) Morgan on December 19, 1912 at the Pujo Committee of the House of Representatives that was investigating the power of Wall Street. Morgan’s statement was featured in newspapers the next day.

“Money is gold” is often misquoted as “Gold is money.” Modern misquotations of Morgan’s remarks include “Gold is money—everything else is credit” and “Gold and silver are money—everything else is credit.”


fiftybagger's picture

Oh my, where should I start.  The word silver MEANS money in 60 different languages.  That is a fact.  Silver has been money for 5000 years.  You quote JP Morgan, a very evil man, and the namesake of a very evil institution which has the goal of demonetizing silver by suppressing the price and making it too rare to be used as money.  Hmmmmm. 


It seems quite clear to me that this is a battle of good versus evil, the people versus the bankers, truth versus lies, and silver versus paper.





Fiat2Zero's picture

Completely wrong.  And quoting the Apex Predator banker on gold makes no sense.  You might as well quote Bernanke on whether Gold is money.

Silver has a long history of money used to transact business.  Gold was used to store wealth.  While you can buy a loaf of bread with a 1 oz Kruggerand, that would be completely stupid (but maybe that's what you'll do if you _only_ have gold and no junk silver).

There are many more instances of silver's importance as a monetary metal compared to gold.  Silver has been money longer than gold.

That said, silver is more volatile, but primarily due to the fact that the modern paper market is much smaller.  This is something that is completely a modern phenomenon.  Doesn't it seem odd that the silver market is smaller but there is supposedly 16 times more silver in the earth's crust.

What you will see is a type of "I like wine, beer drinkers are pigs" type of snobbery from gold bugs trashing silver bugs.  It's completely asinine.  Gold bugs are much more conservative, so when crisis is high and gold is shooting up (and silver isn't moving), they are taunting the silver bugs.  When silver rockets up (aided by gold), the gold bugs are quiet.

All PM investors have their own preferences as to the mix of gold and silver they possess.  Hopefully you have a good amount of both of them.  The two poles of greed and fear oscillate making each camp feel like they made the better choice.  This is simply human nature.

If there is a crisis, guess what?  Cash will initially be king.  Make sure you have some gold, silver, cash, cigarettes, bullets, and food on hand.

Gold is a superior wealth preserver in these times due to the fact it is concentrated.  But Gold and Silver have been money for a long, long time.



FeralSerf's picture

You are correct that silver has been money for a long time, however, industrial uses for silver besides silverware didn't exist before the 20th century. This is one big reason that silver is no longer useful as money as it once was. The industrial uses used up the monetary stocks of silver.

Why don't you use platinum, rhodium and palladium or even germanium as money? Plutonium is also very much in demand I hear and indications are it will be even more so in the near future.

AmCockerSpaniel's picture

Your bullets need to be silver. That way you can trade them both ways.

FeralSerf's picture

Tungsten makes better bullets.

FeralSerf's picture

FOFOA has an excellent explanation for why gold but not other commodities is money because gold is not used up.


None of this means your silver or platinum will not be valuable.  It only means, because of their utility, they are not suitable for widespread use  as money.

FWIW, silver is about 16 times more plentiful in the earth's crust than gold.  It's because it's used up that there's less above ground inventory.  Most silver miners make money when silver is above $30 or so.  Most gold miners need $600 or so to break even.

Fiat2Zero's picture

More nonsense.

Just because something has a use, doesn't mean it isn't money.  Gold was originally used (and still is), in unrecoverable amounts, for electronic contacts.  Silver is now used, because it is superior, and there is more of it.

But the recoverability piece of this merely has to do with the price.  At a certain price, all of the silver that is on electrical contacts will be cost effective to be "mined."

Cocoa beans have been used as money.  They were always edible during that period.

Gold is used in jewelry, and plating.  This gold is not always recoverable.

There have been many more silver coins in circulation than gold coins.  Think of _very recent history_ - there is something called a silver dime.  I have a ton of them.  These were not money?  Silver coins have been far more circulated than gold coins.

The US was on a bi-metallic standard (gold and silver) because most transactions are messy with gold coins alone.  Remember "pieces of eight"?  These were scored gold coins and you broke them up.  Little chunks of gold and dust would gather in a bag (like crumbs) and you'd have to try to reconstitute this gold crumb.  People learned a good lesson from this crummy experiment, and used silver coins in addition to gold.

Silver was thought to be between 10-16 times the ratio in earth's crust.  However, the above ground supply of silver has completely dwindled.  The US sold all its silver (it has no silver reserves).

The numbers on profitability above make sense, provided energy costs are reasonable (oil == $80-$100 a barrel).  The numbers for silver have been estimated at $20 per ounce cost to bring to market.  Gold figures are easier to come by at around $500 per oz cost to bring to market.

FeralSerf's picture

<<Remember "pieces of eight"? These were scored gold coins. . .>>

Apparently I remember them better than you do:

The Spanish dollar (also known as the piece of eight, the real de a ocho or the eight-real coin) is a silver coin, of approximately 38 mm diameter, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform in 1497.


The primary use of gold is not industrial.  Most gold that is used in industrial processes is recovered.    The opposite can be said about silver.

Silver used to be useful as money.  That is no longer the case.  Perhaps you need to better understand what "money" is in order to understand why gold can be (and is) money, but silver cannot.


Smiddywesson's picture

How long till the Great Recession ends?

I'm guessing 10 years.  I think the baby-boomers have to start dying out first.

Agreed.  The baby boomers were asleep at the switch when the worse parts of this happened, and they will bear the brunt of the repercussions. 

I wholeheartedly disagree that this will be over in ten years.  We are 11 years into it already and the bad stuff has not even peaked yet.  Does anyone imagine we will burst out of the storm cloulds into a healthy world economy and monetary system?  I don't.  The same leaders that took us down this path over the last decade are unlikely to suddenly become competent and lead us out in less time.  Things are broken faster than repaired.  You become insolvent quicker than you gain solvency.  There is going to be a hell of a lot of tidying up after this.  We will be lucky to experience only another 20 years of bedlam, and that is if there is not widespread war.

rocker's picture

And we were told that JPM bought a vault facility for Platinum.  I guess the next thing they acquire will be Silver too.

I think I need to buy a gun's picture

they bought a good chunk of the oil from the spr release as well....those cocknockers

rocker's picture

As ZH pointed out to us, your right, they bought a tanker full. Soooo, it was at a much higher price than today's close. Are they bad traders.

Orrrrr, so, did they buy it or was that put up as collateral from a unknown third party. If JPM is not sleeze. Please define the term.

Remember they were the suspicious short silver position holders. Always remember, the vaults can hold physical anything.

strannick's picture

Dimon's going to anchor it off Cape Cod and use it to keep topped up the oil resevoir at his cottage in the Hamptons.

Urban Roman's picture

I wonder how much short silver the vaults can hold?

What are the space requirements of short silver, anyway?

knukles's picture

They were appointed a certified vaulting agent in sliver about 3 or so months ago.

nope-1004's picture

The banksters are fraudulent and have consistently lied about the state of their balance sheets, so why should anything they publish on metals be any different?

 Even the "official" accounting ledgers vis a vis FASB are nothing but a farce, so perusing metals reports on bullion activity issued by insolvent banks may be a tad misleading.  Just sayin.

JW n FL's picture


You are correct, Sir.

but.. we ALL Hate! them so much we just want to watch them suffer a painful death.

rocker's picture

Just remember JW, it is not personal, until they made it so.  Eye for a Eye.  Eh.

disabledvet's picture

Because they really are broke.

kito's picture

is this considered highly unusual?


btw, tyler- loved your tweet on per se