While JPM's eligible gold holdings are nowhere near the record lows hit in the summer of 2013, when they dropped to a tiny 46K ounces, sparking concerns of a potential deliverable default, yesterday according to the daily CME gold depository report, JPM saw a whopping 321,500 ounces, or about 10 tons of gold, withdrawn. This was the biggest outflow since the August 5 rebalance when nearly 1.5 million ounces were withdrawn and added, and was the biggest, and is tied with two identical 321,500 oz outflows recorded in early January. As of yesterday, JPM's eligible gold tumbled by 40% in one day, declining to 485.K ounces from over 800K the day before: the lowest eligible gold inventory since almost exactly a year ago.
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What is perhaps more notable, is that the recent outflows of eligible golds are taking place at the same time as there has been a significant reduction in the NAV/gold holdings of the GLD ETF. A question thus arises once again: where is the gold being withdrawn to and who is doing these not insubstantial withdrawals.
Finally, it bears pointing out that since September 1, eligible gold at JPM's vault has declined from 1.5 million ounces to under 500K: a decline of over 1 million ounces in just over a month, and matching the fastest decline on record for the JPM vault recorded in early 2013.
It would appear that someone is certainly in a rush to "withdraw" as much eligible gold as possible at a time when gold has been stubbornly trading in the $1200/ounce range, and when significant moves of either physical or paper gold, appear to not have much of an impact on gold price.
Will JPM's gold vault be further emptied today? We will know the answer in just about 3 hours.
