A Massive Surge In GLD "Inventory"

by Turd Ferguson, TF Metals:

Yesterday saw the 2nd-largest one day surge in GLD "inventory" in the past five years. What does this signal, if anything at all?

I think most everyone here knows how I feel about the GLD. It's a scam. It's a sham and it's a fraud. Oh sure, there's almost certainly some gold held in the HSBC vaults but how much is truly, 100% allocated to just the GLD? Recall the whole charade from back in 2011 when Bob Pissonme of CNBS was allegedly driven in circles for hours before being allowed into the super-secret vaults that house the GLD's gold: http://www.silverdoctors.com/gold/gold-news/ned-naylor-leyland-reveals-actual-owner-of-bob-pisanis-gld-gold-bar/

Meh, whatever. There's no sense in relitigating this nonsense today. What is curious sometimes is the timing of the the Authorised Participant (Bullion Bank) alleged additions and withdrawals. Most recently we noted a stretch of 16 consecutive withdrawals over the period from June 26 through August 7. The total amount of "gold" withdrawn from "inventory" over that time was 66.81 metric tonnes.

However, since August 7, the GLD has seen seven consecutive additions to inventory. The first six, from August 14 to August 30, were for a total of 29.56 metric tonnes. This is astonishing in its own right as it's difficult to imagine this gold just laying around, waiting for HSBC to pick it up when needed. And then yesterday, we got the coup de grace...an incredible 23.65 metric tonnes were allegedly added yesterday alone.

How much gold is 23.65 metric tonnes? That's about 760,000 troy ounces.

And is that a lot? Well, there are about 400 troy ounces in every London Good Delivery Bar so 23.65 metric tonnes equates to about 1,900 of these babies:


If you stack 192 of them to a pallet, it also means you're looking at 10 pallets as shown below:


So, I'm sure this is all totally on the up-and-up and honest. Remember, the custodian for the GLD gold is HSBC and they have a stellar and impeccable reputation: http://www.corp-research.org/HSBC

Again...whatever. This is all old news. The only reason I bring this up is to remind you of the last two times the GLD saw such a massive addition to "inventory".

Recall the heady days of June and July 2016. The Brexit vote had just shocked the financial world. Negative rates abounded and even the 10-year US treasury note traded at a yield of just 1.50%. Comex Digital Gold began the year near $1100 but had risen to $1300 and beyond.

On June 24, 2016...the day after the Brexit vote...the GLD "inventory" surged by 18.41 mts. "Inventory" continued to rise into early July and then, with the largest one day surge that we have on record since 2012, "inventory" jumped 28.81 metric tonnes on July 5. Hmmmm....July 5. What else happened on July 5? That was the very day of the 2017 price peak near $1375! How about that?

Cause and effect? Effect and cause? Simple coincidence? Maybe there's no connection at all as the APs (Bullion Banks) can simply stuff the GLD "inventory" with as many delivery receipts and promissory notes as they deem necessary to give the appearance of propriety. But then again, maybe not.

However, I don't want to leave you with the impression that this HAS TO BE a bad sign and signal of a short-term price top. According to our records over the past five years, there was one other massive GLD inflow. It was for 18.74 metric tonnes and it came in on December 18, 2015. And where was price then? Near $1060 and the absolute bottom of the 2012-2015 bear market. From that point, price soared nearly 30% in 6 months and the GLD "inventory" rose with it from 630.17 mts on December 17, 2015 to that July 5, 2016 peak noted above at 982.72 mts.

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