Do you think that the charges that JPM was fudging its reports to the CFTC on trader's metal positions was any factor in this? Probably not. But there seems to be a decided erosion of confidence in the process as it exists in the New York metals market, at Madame Tussaud's on the Hudson.
The big dogs holding gold for the Comex in their warehouses now are HSBC and Scotia Mocatta.
So far this month of August, approximately 226,000 ounces of gold have been stood for delivery, as compared to a total of a little more than 968,000 ounces registered for delivery at these prices. As we have seen lately, it does not bother the banksters to allow the inventories to shrink down to a small percentage of the global metals market. And so price discovery is divorced and diverges from pricing.
If I were of a mind to hold gold and silver in some venue for trading for a quick buck, I might consider keeping it at some Comex warehouse, or holding it in some ETF like GLD or SLV. After all, it is a relatively low cost venue.
But if it was for anything except a quick trade, I would personally be inclined to get it out. At my earliest convenience. But that is just my preference.
When it is too late to move your wealth, they will most likely be blaming no one in particular, just a series of unfortunate events. Like MF Global.
Or the Hotel California. You can check out, but you can never leave: except on their terms.
Have a pleasant evening.