Tag Archives: Comex gold

Trading And Investing In Gold: Follow The Money

The paper gold attack that I first suggested might occur in the September 7th issue has taken gold from $1360 down to $1270 (continuous contract basis). Technically, gold has moved from an “overbought” condition to a mildly “oversold” condition. The RSI and MACD indicate that gold is slightly “oversold” but I believe both indicators will flash “extremely oversold” before this price attack over. This should occur sometime in the next 2-3 weeks.

I say this because I continue to believe the open interest in Comex paper gold, combined with the analyzing the weekly Commitment of Traders report, is the best indicator of gold’s next move, at least until the western Central Banks are unable to control the price of gold with paper derivatives. To be sure, the COT report is not always a perfect predictor but in the last 15 years the two reports combined have been around 90% accurate.

Currently, the Comex banks’ net short position in paper gold is at the high end of its historical range. Concomitantly, the net long position of the hedge funds is also at the high end of its historical range. Per last Friday’s COT report, the banks began to reduce the short positions, thereby reducing their net short position, and the hedge funds began to reduce the long positions, thereby reducing their net short position (click to enlarge):

The graphic above is from the CFTC’s weekly COT report for all commodities. I’ve referenced the COT report quite a bit so I thought I’d put some “meat” on the bones. The report was published Friday (Sept 29th) but the cut-off day for the data used is the Tuesday before last Friday (Sept 26th). Unfortunately, by the time we, the public, can see the data it’s three days old. By the time we can try to trade on it (the following Monday) it’s four days old. This is unfortunate and the CFTC could force a daily disclosure of the data, which would be ideal, but since when does the Government do anything for the benefit of the public? Having said that, we can still get a feel for then general “flow” of positioning in gold futures by the various trading cohorts. Note: though the CFTC publishes the COT report, the actual data comes from the banks who operate and manage the Comex trading floor and computer systems.

I’ve highlighted the data that is important to me. The reportable positions are the “producer/hedgers,” “swap dealers,” “managed money,” “other reportables” and “non-reportable.” The latter two are large money pools that are not hedge funds or mutual funds and retail traders, respectively. They are not a factor in the analysis except to the extent that it is thought, though unprovable, that the banks throw some of their positions into the “other reportables” category to hide them.

The bank positions are primarily in the “swap dealer” account but they also throw their trades into the producer/hedge category. It’s impossible to know how much without having access to the systems. The “managed money” is primarily hedge funds. On the left side is the open interest (o/i) number. You can see at the bottom the o/i declined by 20.4k contracts from the previous Tuesday. It had peaked a couple weeks earlier around the 580k level, if memory serves me correctly. [As of Tues,  Oct 10th, the o/i was 520k]

The bottom row data shows the change in the various positions from the previous week’s report. You can see that the swap dealers covered 14.5k worth of shorts and added 4.9k of longs. The producer/hedgers were net unchanged in terms of net position but still extremely net short. The hedge funds (managed money) sold over 32k of long positions and added 4.8k to their short position, effectively dropping their net long position by 36.8k contracts.

Note: The spread positions (“spreading”) are not important to this analysis. They represent a trade in which one side of the trade might be short October gold contracts and offsets it with a long position in December gold, for instance. This would be a “hedged” bullish trade because the entity with that position is expecting the price of gold to rise by December but wants to hedge out risk factors that might take the price of gold lower between now and then. There’s no way to know how the spread trades are positioned without access to the Comex systems.

You’ll note, based on the change in relative positions, it appears as if the banks have started to cover their shorts and add to longs, thereby decreasing their net short position. Similarly, the hedge funds did the opposite, thereby reducing their net long position from the previous week. The open interest as of this past Wednesday (published daily) was 522k contracts. This is 27k contracts lower than the o/i when the report was put together a week ago Tuesday. The o/i appears to be trending lower, which historically has indicated that the banks are collapsing their net short position and the hedge funds are collapsing their net long. We’ll know if this trend continued on Friday afternoon, when the next COT report is released.

If this trend continues, it indicates that we’re getting closer to a bottom and the next move higher. I’d like to see the open interest on the Comex decline by about another 100k contracts. This might take 3 or 4 weeks. We could also see some short-lived spikes down in price before this over. Typically what has been occurring over the last 3 years or so is that, as the hedge funds dump longs and add to shorts, the hedge fund computer algos overreact to the downside price momentum and begin to “flatten out” the hedge fund net position by rapidly unloading longs and piling into the short side. A couple times over the past few years the hedge funds have been net short for a week or two. This always has preceded a big rally in gold.

I don’t know if it will play out like that this time around. Currently the mining shares are “grudgingly” giving up ground. Often, though not always, that trading behavior in the shares indicates that a bottom is forming. Again, I don’t know if that will be the case and I’m braced for one more nerve-wracking move down to the $1250-$1260 area. We still have a hedge in our stock portfolio via owning in-the-money calls on JDST. We’ll probably remove that hedge sometime in the next week or two.

Although we might be in a for a bumpy ride over the next couple of weeks (then again, we might not be), the mining stocks, expecially the juniors, are setting up for big move after gold (and silver) bottoms out and heads higher.

The graph above (click to enlarge) is a 1-yr daily of GDX. From its bottom in December through Thursday’s close, GDX is up 21%. You can see in the chart the slope of the trendline I drew steepened slightly in mid-July. I still think we could see a short-term drop in GDX below the 200 dma (red line) but I would use this as an opportunity to add to positions.

The one factor that could derail the ability of the banks to engineer more downside to the gold price is China’s return to the market starting Sunday night. China has been closed down this past week in observance of a national holiday, which means their presence as a large buyer of physical gold has been absent. Quite frankly, I expected a bigger take-down of the gold price in China’s absence. The inability to do this may have been offset by India’s continued demand for gold, both through official avenues of import and smuggling. The gold flowing duty-free into India from South Korea has been curtailed but Indonesia, which is party to the same free trade agreement, has stepped in to fill the void. Just this past week, import premiums were high enough to indicate that legal importation of kilo bars also resumed.

One last note, some of you may have seen the report that Russia’s Central Bank has become the world’s largest official buyer of gold (“official” meaning Central Bank/sovereign). I would argue that China does not fully disclose the extent to which the PBoC is accumulating gold (for instance, it’s thought that the PBoC buys most if not all of the 400+ tonnes of gold produced by China’s mines. That said, both the Russian and Chinese Central Banks combined are accumulating an enormous quantity of gold. I would suggest they are doing this a precursor to re-introducing gold into the global monetary system.  In other words, follow the money.

The above commentary is from the latest issue of the Mining Stock Journal.  In that issue I reviewed several of the previous stock ideas, many of which have doubled in the last 52 weeks, and presented a high quality mid-cap producer silver mining stock as shorter term trade idea that I think could be good for at least 25% through year-end.  You can learn more about the MSJ here:  Mining Stock Journal subscription information.   All back-issues are included with your subscription.

Central Bank Intervention Slams Paper Gold

This isn’t some trader’s “fat finger” accidentally overloading the sell button and pressing “sell.” This is unadulterated BIS/ECB/BoE/Fed sponsored market intervention:

At 4:01 EST, a paper gold nuclear bomb was detonated in the Comex Globex computer system. The graph above is just the August “front month” paper gold contract on the Comex. In that contract 1.49 million ozs of paper gold were dumped into the Comex electronic trading system. Zerohedge is attributing 1.88 million ozs. That would include the selling in all of the paper gold contract months.

But that’s not the entire amount of the paper hit. There would have been a large amount of LBMA gold forward paper gold contracts dumped in correlation with the Comex paper avalanche. ZH attributes $2.2 billion in paper gold dumped.  But the real number including LBMA forwards dumped was much larger.

“The mysterious plunge has the market spooked,” says some idiot named Bob Habercorn from RJO. This was not “mysterious.” It was intentional – a shock and awe market intervention that was intended to “spook” the market. That quote is from a Bloomberg report full of fake news (caution, this article contains fake news:  LINK).

The article claims that China bought less from Hong Kong in May. In fact, the amount of gold exported from Switzerland to India and Hong Kong was up 39% from April, according to Platts. Furthermore, we have no clue how much gold moves into China through Beijing and Shanghai, numbers which are intentionally hidden from the world.

Here’s the reason that today was selected by the BIS et al to attack gold in the paper market in an effort to scare the crap out of the market:

the day was well chosen as the Muslim world including Turkey was closed for the end of Ramadan as was India which has the amiable habit of observing the holidays of religious minorities. – from John Brimelow’s Gold Jottings

Two of the largest buyers of physical gold in the world right now, India + Turkey, were closed for the observance of a religious holiday. And Shanghai closed for the day 31 minutes before the paper dump.

4:00 a.m. EST is one of the slowest, lowest volume trading periods during any 24 hour period. Why would a seller of a large number of contracts sell at that time of day, when the largest buyers of what is being sold are not in the market at the time of the sale?

If it were merely a “fat finger” – the fake news narrative – then the mistake would have been immediately corrected and the price would have quickly recovered.  Anyone who buys the “fat finger” story is either tragically ignorant or hopelessly naive.

When India returns tonight to the market, I would expect gold to get a strong bid.  Indians have a habit of buying a lot more physically deliverable gold than they might have otherwise when the western Central Banks put gold “on sale” by lowering the price in the paper market.  I suspect Turkey and China will increase their appetite as well.

The mining stocks per the HUI barely acknowledge the artificial price take-down.  The HUI is down less that 1%.  In the past, on a day when gold was taken down to this degree, the HUI would have dropped at least 4-5%.   It’s almost as if mining stock traders are laughing at the latest Central Bank antics.  I know I am…

11.1 Tonnes Of Paper Gold Dumped In Sixty Seconds

Central banks stand ready to lease gold in increasing quantities should the price rise.  – Alan Greenspan, 1998 in Congressional testimony on OTC derivatives

Gold has been in a steady uptrend since December 18th, bottoming at $1131 after a four and half month price correction.  Firmly back over the 50 dma, the price momentum appears to be a threat to the “bullion”  banks who suppress the price of gold in the paper derivatives market on behalf of the western Central Banks and, ultimately, the BIS.

The banks must feel threatened by the recent activity in both physical and paper gold trading.  This morning the price of gold was attacked in the Comex paper market after St. Louis Fed-head, James Bullard, delivered remarks about interest rate policy that should have propelled the price of gold higher:  “We think the low-safe-real-rate regime is unlikely to change in the near term. This means the policy rate can also remain relatively low over the forecast horizon” (link).

Instead, the Comex was bombed with paper:

At 9:54 a.m. EST, 3,927 April gold futures contract (paper gold) was dropped on the Comex. Prior to this, the the average number of contracts per minute since the Comex had opened was under 500 contracts. This is 11.1 tonnes of paper gold which hit the Comex trading floor and electronic trading system in a 60 second window.  It represents approximately 30% of the total amount of gold the Comex vault operators are reporting to be available for delivery under Comex contracts – dumped in paper form in 1 minute.

This reeks of fear.  The western Central Banks have grossly underestimated the eastern hemisphere’s appetite for physically deliverable gold.  Despite an attempt by the BIS to mute India’s demand by restricting the availability of cash in India’s banking system, India’s current demand is robust and will likely increase as Indian’s now have cause to fear the Indian Government’s war on cash.

In addition, China’s demand for gold seems to be accelerating.  Based on Swiss export numbers, 158 tonnes of gold was shipped to China in December.  Far higher than the numbers presented by “official” organizations tracking gold flows.   Current premiums to the global market price of gold on the Shanghai Gold Exchange are running in the low teens.  So far this week well over 100 tonnes of gold have been delivered onto the SGE.  Except for the PBoC, all gold distributed inside China must first pass through the SGE.

The western Central Banks will have a problem if the price of gold begins to take-off, as they will lose control of their ability to control the price using derivatives.   Perhaps in addition to the standard price containment operation on the Comex this morning, the attack on the price of gold in the paper market was in response to Eric Sprott’s comments on King World News yesterday:

“There’s no doubt about it if they (investors) keep coming in and buying that kind of tonnage. At some point they will look inside at what little gold is left in the Western vaults and say, ‘No mas. We can’t keep doing this at the rate that they are buying tonnage because we will run out of gold.’ And if they see that they are going to run out of gold in a year or so, when do they raise the white flag? I have told you many times that the Western central banks have been making up for the imbalance in term of supply and demand by dishoarding their gold hoard surreptitiously”

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Someone Dumped 70 Tons Of Paper Gold At 8:30 a.m.

At 8:30 a.m. this morning, 10 minutes after the Comex gold pit opens, over 70 tons of gold was dropped into the entire Comex trading system.  If this happened on the NYSE, one of the ECN’s (usually BATS) would have mysteriously “broke” and trading would have been halted – before the damaging effects of the systemic paper overload hit the market.

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From 8:30 to 9:30 a.m. EST, a total of 6,289,900 ozs of paper gold, or 196.5 tons was unloaded on the Comex.   To put this in perspective, the Comex is reporting 2.37 million ounces of gold in its registered account (the gold that can be delivered).  That amount of paper gold that would unloaded was 2.7x the amount of gold available to be delivered.   It represents 58% of the entire amount of gold reported to be in Comex vaults.

It’s hard to find any specific news trigger that would have motivated anyone to sell one ounce of gold, let alone nearly 3x the amount of physical gold available to be delivered.

Perhaps the worst economic news reported was retail sales, which dropped .3% in August vs. the expectation of no change.  This is the 4th month in a row retail sales have dropped on monthly sequential basis.  Retail sales have declined 6 out of 8 months this year.

There’s probably nothing to see in that chart above – just like the allegations of Hillary’s poor health…

 

The U.S. Gold/Silver Price Managers Strike-Out Again

It’s becoming monotonous.   The precious metals get the obligatory price hit at 6 p.m. EST when the CME’s Globex electronic trading system re-opens after taking about an hour break from manipulating markets.  Then gold/silver rally throughout the eastern hemisphere trading hours, which wind down around 3 a.m. EST.   And then gold begins to fade going into the manipulated London a.m. gold price fix.   It typically trades laterally until the Comex gold pit opens (8:20 a.m EST), which is when we get the customary “cliff dive” price drop:

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For 15 years, I have been unable to understand how only the gold investing commnunity – aka “goldbugs,” or just “bugs,” as Dennis Gartman refers to it – seems to discern this daily ritualistic trading pattern in the price of gold/silver. Funny thing, that.

It’s confounding to consider that the regulatory authorities have been able to spot and prosecute interest rate manipulative activities by several banks – LIBOR Rigging – many of these banks are also considered “bullion banks.” Larry Summers updated and augmented Gibson’s Paradox by demonstrating that interest rates could not be manipulated without manipulating the price of gold – Gibson’s Paradox and the Gold Standard.  How is it therefore possible that the bullion banks, who manipulated LIBOR and who were involved in the London Gold Fix, were able to accomplish the former without engaging in the latter? Let’s call this Kranzler’s Enigma.

After this morning’s obligatory Comex floor opening price hit, gold bounced back in “V” formation.  I emailed GATA’s Bill “Murphy” Midas to discuss the trading action, noting that “something is different.”  This “V” bounce has been occurring quite frequently since mid-December.  Historically, once the Comex price-spanking occurred, the trading day for gold traders may as well have been over.   But for some reason the gold cartel banks have been unable to keep their boot pressed on the throat of the gold market.

One other point.   Many of you may have noticed that GLD and the Comex have recently been reporting a large increase in gold vault inventory.   As I said to Midas:  “I’ve noticed in the past that a build-up in reported GLD inventory seems to precede a smash. But it’s been “building up” for a while and no smash. All hits are being bought.

Not sure it means anything, especially if the gold that is being reported in the warehouses at the Comex and GLD exists only as accounting entries, which is very possible if not highly probable.”

I’ll end with a piercing comment from John Embry.   I rhetorically asked him how high the price of gold would be if the regulators prevented Comex market makers from issuing gold contracts in an amount that exceeds more than 110% or 120% of the stated inventory of gold on the Comex:

With respect to your gold question, the price would be much higher but they could still get away with considerable chicanery OTC and on the LBMA. However, since the American government is firmly behind this Ponzi scheme, I am not holding out any hope for help from the regulators. However, things are moving inexorably in our direction, and in my mind, the question only concerns time not the ultimate outcome.Thus as frustrating as it has been I would still rather be playing our hand at this point, not their’s. – John Embry

Is The Pullback In Gold Over?

The price of gold ran up 20% since the beginning of 2016 through early March.  In response to “overbought” readings in the popular momentum indicators, the superficial gold commentators become short term bearish.  Additionally, based on what appeared too be a heavy “off-sides” in the bullion bank net short position vs. the hedge fund net long position in Comex gold futures, per the Commitment of Traders report, the “big price correction” side of the ship deck became heavily mobbed with short-term timing forecasts.

About two weeks ago, I decided to roll up my shirt sleeves and dirty up my hands with the COT data compiled by my business partner going back to early 2005.  What I found in terms the current net short / net long positioning between the bullion banks and the hedge funds might surprise a lot of observers.  Of course, I presented the information to the subscribers of my Mining Stock Journal in the March 17th issue (along with a relatively undiscovered “de-risked” junior mining stock idea with substantial upside, risk-adjusted).

As it turns out, while the net short position of the criminal banks is above the average net short position from 2005 to present, it’s not even remotely close to the net short position historically that has signaled an imminent price-smash operation.   Currently the net short position is 200k contracts.  But the highest that net short since 2005 has been is well over 300k.  The net short position was well over 200k for large portions of 2010.

In other words, while there is some concern that the cartel is set up to force the price of gold lower by bombarding the Comex computer system with paper gold detonators, the comparative historical statistics suggest that gold has lot more upside and the open interest has a lot of room to expand before the cartel is in a position to throttle gold lower.

In fact, a case can be made that the current pullback in the price of gold may be winding down – click on image to enlarge:

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As you can see in the graph above, gold has nearly pulled back to its 50 dma (dark blue line) and the momentum indicators (RSI, MACD) have moved from “overbought” to a neutral position.  The RSI may be actually be turning back up (green box).

As we’ve seen with official intervention in all markets,  it’s nearly impossible to forecast directional moves with any degree of accuracy.  However, there’s a case to be made that the cartel is having problems forcing the price of gold lower.  On several occasions in the last two weeks, gold has been slammed in overnight trading only to snap-back.  Monday was a prime example, as gold was smacked hard for $10 down to $1210 in Asian trading but bounced back to close nearly unchanged from last Thursday’s close of $1221.

The fact that Indian jewelers are still on strike and thereby choking off Indian imports makes gold’s resilience even more remarkable.  At some point, India will have to start importing heavily in order to facilitate seasonal, festival-related gold buying in May.

Even more interesting is the behavior of the mining stocks.  The HUI index ran up 83% from Jan 19 to March 16.  A price correction had to be expected.  While it looks like the miners are still vulnerable to a bigger price decline than the current 7% pullback, don’t forget that the HUI more than doubled between late October and December 31st in 2008.

I’m preparing to chat with the CEO of junior gold mining stock that has been largely unnoticed by U.S. investors, retail and institutional.  But a strategic buyer recently bought a 20% stake in this company and also plunked down a considerable sum of cash for a  1.5% net smelter royalty.  I will be presenting this idea in the next issue of the Mining Stock Journal, which should be out either Thursday or Friday.  This issue will also include proprietary market commentary and other “goodies.”

Official Intervention In The Gold Market Is Now Blatantly At Work

The damage done to gold on Friday was due to skillfully timed flash crashes rather than powerful selling.  – John Brimelow, JB’ Gold Jottings Report

As a wider audience of market observers becomes aware of the flagrant use of the paper gold market to manipulate the price of gold, the degree of intervention in the gold market by the Fed/Treasury becomes more openly aggressive.

Eric Dubin of the News Doctors wrote a useful commentary on the current effort by the “gold cartel” to take down the price of gold:

The cartel is acting aggressively this week on top of the mountain of paper-based gold issuance into the COMEX market they’ve been shoveling into the short side already – for weeks – in an effort to slow momentum. Now, as you see today, with traders getting nervous considering sky high commercial short positions and an FOMC meeting starting tomorrow, is it any wonder that the cartel was able to get some traction to the downside?

You can read the rest of his analysis here:  The News Doctors

 

The Comex Is A Grotesque Comic Book

If you don’t want everyone to run out of the coal mine, hide the canary from everyone’s sight before it dies.  – Quote from a good friend and colleague

The story is getting old, but it needs to be shoved in front of us to keep the truth alive.  By now most of you have seen the incredible 325:1 paper gold to deliverable gold ratio on the Comex.   Let’s say the CME were to hypothecate ALL of the gold reported to be held in Comex vaults and used it to “back” the paper gold open interest.  It would require importing 6 times more gold, or 956 tons – more than 1/3 the total amount of gold mined globally in a year.  Just not possible.

It’s very important to keep in mind that the numbers that are reported representing the amount of gold held in Comex vaults are numbers that originate from the bullion banks, who generate the reports and send them to the publishing apparatus at the CME.  They are not audited.   Using those numbers as “the numbers” requires a leap of faith that could easily be betrayed.   This is a point fact – not opinion – based on the history of bank numbers reporting that gets lost on most people and market analysts.   Let’s put it this way:  If the Comex numbers are being reported accurately and honestly, it would be the only area of bank financial reporting that is not laced with fraud.  Are you willing to make that wager?

For the record, here’s what happened today:

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After trading sideways around the $1065 level in the overnight Asian trading session – the actual physical gold trading market – paper gold engaged in the now familiar “cliff dive” formation just after 8:00 a.m. EST. There were no news or events reported that would have triggered any type of market response from the price of gold.  And the trading “needle” didn’t move in any other related commodities market or in the stock market futures.

Just pure, unadulterated blatant manipulation of the price of gold using fraudulent electronically generated paper contracts.

John Embry emailed me this a.m. and asked me – rhetorically, of course – how come the U.S. Government is so insistent on the idea of raising rates and coming up with truly insulting economic numbers to allegedly justify it?  What is really going on behind the curtain?

The answer, of course, is that the Fed will not be raising rates. Especially now that the U.S. Treasury debt outstanding is a short chip shot away from $19 trillion and every privately compiled economic activity measurement index is now showing that the U.S. economy is in collapse.

But it’s the same game they are playing with the price of gold. If you are worried about everyone leaving the coal mine because people see a dead canary, take away the canary the before it dies and replace it with a happy fairytale.

Gold (Silver) Is The Most Manipulated Market In History

Our fractional reserve financial system is just a gigantic Ponzi scheme. It can only survive as long as it expands, which is to say, as long as new debt is flushed through the system to finance old debt. But like all Ponzi schemes, the larger it grows the more unstable it becomes. Eventually, it collapses of its own weight.  -James Sinclair in 2009

The western Central Bank/bullion bank paper gold manipulators have become obvious. The reason is that the there is nothing stopping them from manipulating the market. Eventually the physical demand from Asia will undermine their paper gold manipulation activities, but big buyers of physical who demand delivery have no reason to stop the price capping, obviously.

James Turk discussed the various factors driving the manipulation in a King World News interview. I’ve created a graphic to illustrate the manipulation of the gold market as it occurred from Sunday into Monday:

This rally in the precious metals was the result of investors moving out of currencies to a safe-haven. It was an expected and natural reaction after the Paris attacks. Then came the unnatural, second and completely different precious metals market. Gold and silver ran into a solid brick wall when London opened. The difference between the way gold and silver traded in Asia and what happened in London was as stark as the difference between night and day.

Are we to believe that in striking contrast to what we saw in Asia, there were no safe-haven buyers in Europe?

The reality is that the central planners were out in full force with their market interventions in London, selling persistently and using their algorithms to prevent gold and silver from climbing any higher.

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The price of gold jumped at the open of Globex trading on Sunday evening. This would be expected after a string of bad economic and earnings reports littered the news wires late Friday. And then, of course, the event in Paris. But as you can see, after Asia was done feeding on the cheap gold provided to them from the fierce manipulation last week that drove the price of gold back under $1100, the typical Asia closed/London opens sell-off began.

The massive manipulation has taken on “shock and awe” proportions.  The fact that is has become so blatant and extreme reflects the growing sense of desperation by the elitists to keep the entire western financial/economic system from collapsing.

If gold were allowed to trade free from the control imposed using western paper derivatives, the price would shoot higher and send the warning to everyone that the system is on the verge of collapse.

Several friends and colleagues recently have expressed a high degree of frustration and have asked me when I thought the suppression of gold would end.  I point out them, and I believe correctly so, the the criminals looting our system have no choice but to use any means at their disposal in their attempt to keep gold from moving higher and to keep the stock market aloft.

They have no choice.   A falling price of gold and a rising stock market are the only cover stories they have left in their cabalistic effort to hide the absurd lies which belie the flood of propaganda about the economy, inflation and unemployment.

But at some point their ability to keep the wheels on the fraud that is the United States is going to fail.  Every Ponzi scheme in history eventually collapses.  It’s impossible to predict when this will occur.  I do believe that there is a growing sense of awareness among the population that something is wrong.  This is reflected in the fact that US Mint gold coin sales hit a 29-year high in the third quarter this year.   For those wallow about in the cesspool of blind hope and have not prepared for what’s coming, their lives will be shattered.

24% Of The Eligible Gold Was Removed From JP Morgan’s Comex Vault

I have to give credit to my friend/colleague Craig “Turd Ferguson” Hemke – TF Metals Report – for tweeting this piece of information.  I don’t monitor the Comex precious metals vault reports everyday.

Yesterday 24% of the “eligible” gold being held – supposedly – in JP Morgan’s Comex gold vault left the premises (click to enlarge):Untitled

Briefly to review, the “eligible” gold is the gold that is being “safe”kept at the Comex by investors who took delivery of gold. The Comex actually offers a big discount to the market rate charged for safekeeping to investors who keep their gold in the confines of Comex bank vaults.

I think it’s safe to say that either a big investor who took delivery of the gold and was “safe” keeping it in JPM’s vault decided he would rather provide his own means of safekeeping – understandably so.  OR, it’s entirely possible that the gold was hypothecated and the 100 oz. Comex bars were shipped to Swizterland where they will be refined into the kilo bars used on the Shanghai Gold Exchange.

Whatever the case might be,  the amount removed was 158k ozs, or a little over 4 tonnes. It’s amusing to contemplate this in the context of when Germany asked for its gold being held at the Fed, it took a year for the Fed to ship 5 tonnes…

Craig points out the amount of gold removed from JP Morgans eligible vault is greater than the total amount of gold in all Comex vaults – as reported – that is classified as being “registered,” or available for delivery.   You may note that I keep using the modifier, “as reported.”  If you read the area shaded in yellow at the bottom of the Comex report above, you’ll understand why.

With the bubble in Comex paper gold that has formed this year, there is a high probability that anyone who “safe”keeps their gold at the Comex is facing the increasing likelihood of losing the ability to get that gold delivered upon request.  Just ask Angela and Jens Weidmann (head of the Bundesbank)…