COMEX Deliverable (Registered) Gold Declines By Almost 60,000 Ounces

Since last Friday the registered gold in the COMEX warehouse has declined by almost 60,000 ounces to a new recent low of 875,710 ounces.

Total gold including eligible gold stored by customers in COMEX warehouses but not offered for sale holds steady at around 7 million ounces.

There was a transfer of about 6,445 ounces of customer gold from HSBC to JPM. But this was not deliverable gold as indicated on a popular website, but merely a transfer of eligible ounces from one warehouse to another.

I noted today that about 8,300 ounces of gold bullion in 400 oz. bars was redeemed from the Sprott Physical Gold Trust. Gold in this form is ready for delivery to Asia. I cannot imagine why else someone would go through the redemption process unless there was an immediate need for physical gold.

Given the amount of bullion actually being offered for sale at the COMEX, higher prices seem to be indicated in this delivery cycle with a little over 200,000 ounces worth of contracts standing for delivery, at least for now.

GLD lost about 4.5 tonnes of bullion due to paper induced selling. At some point when the price of gold turns and GLD must start adding bullion back the pressure on physical supply could be interesting.

But why debate or belabor this any further?  Hit the paper price again if you dare, with the government of India doing all that it can already to stop the flow of gold into that country, and the gold forward rates negative over twenty days as the search for deliverable gold at these prices is becoming increasingly desperate.  

People wish to protect at least some portion of their wealth from opaque counterparty risks.

Weighed, and found wanting.

Stand and deliver.

Gold Daily and Silver Weekly Charts - It's Been A Long Time Coming

"Gottes Mühlen mahlen langsam,
mahlen aber trefflich klein
Ob aus Langmut er sich säumet,
bringt mit Schärf' er alles ein."

Friedrich von Logau

As I noted earlier today there was a drawdown, most likely a redemption, of gold bullion in the past week or so of about 10 million dollars worth of gold bullion from the Sprott Physical Gold Trust.

I am informed that Sprott utilizes the highly prized 400 oz. bars that are the standard in Asia, versus the 100 oz. bars common used on the COMEX. Apparently someone wanted the actual bullion badly enough to go through the delivery process.

Let's see how the bullion inventories go during this August delivery month.

As you may recall I have had a stawman theory in the back of my mind that some major player with a good insight into the global supply could manage to create a corner in the gold bullion market without necessarily executing it on the COMEX, which is hard to do because they would be quick to declare force majeure.

But with the tightness of supply and the protracted negative lease rates for gold there appears to be some sort of squeeze going on with drawdown in inventory at COMEX and allegedly at the LBMA.

I would hate to be holding that bag, for the return of leased gold or other contractual obligations for example.

The wind of change is blowing a hurricane.

Weighed, and found wanting.

Stand and deliver

SP 500 and NDX Futures Daily Charts - What, Us Worry?

Another afternoon stick save for equities.

 

NAV Premiums of Certain Precious Metal Trusts and Funds - Drawdown in Sprott Gold Trust

I do not know when it happened as I just noticed it today, but the Sprott Physical Gold Trust reduced its bullion level and the shares outstanding in what was apparently a redemption of units for gold.

The bullion level was reduced by 8,292 ounces, and the units outstanding by exactly 1,000,000. The cash on hand dropped by $434,969 which may be unrelated since it is used to pay storage and management fees.

The two spreadsheets are dated today and August 2. I sometimes neglect to update inventory so it could have happened earlier than that.

As you know the Sprott Trusts do have a facility for the redemption of units for bullion, so I do not view this with any concern, merely curiosity. Obviously someone wanted physical gold bullion for some purpose.

I include both the current and my last spreadsheet pages below.