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The LBMA And Comex Gold Markets Are In A State Of Collapse – Dave Kranzler

Sunday, November 22, 2015 12:20

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TND Guest Contributor: Dave Kranzler |

The disappearing stock of physical gold on the Comex and the LBMA has been documented and discussed by several analysts recently, including this website. In correlation with the disappearing physical gold is the preposterous amount of paper gold claims issued against the dwindling supply of gold both in NY and London.

But what does it mean and where is all this gold going?

Long time precious metals market professional and analyst, David Jensen, has written a must-read analysis which explains why the explosion in the amount of paper gold and the disappearance of physical gold is transmitting the message that the NY and London bullion markets are collapsing:

Many will chuckle at the proposition of Western gold market failure and note that the price of gold has gone nowhere. If the markets are in collapse due to lack of available of gold, then where is the price action exploding to the upside? Well, digital gold and silver are still available in copious (infinite) amounts and continue to trade on both the LBMA and COMEX exchanges – you can have as much digital or virtual metal as you want on these digital exchanges. There is no shortage of virtual metal and thus the virtual price that most investors follow won’t move up. The bullion banks have always sold-down this virtual gold price when it has risen.

The telling of the story is instead in physical metal availability and so we look first to the LBMA – the primary global ‘physical’ exchange. The LBMA indicates in it owns market guide that its primary gold trading contracts, unallocated spot market contracts which are claims for spot physical gold (ownership right-here, right-now), give the holder just an unsecured claim for physical gold. This has allowed the creation and trading of non-existent gold to the point that the London spot physical gold market trades 200% of the global annual gold mine production of gold – each day.

You can read the rest of this article here: LBMA/Comex Gold Markets In Collapse

We must not forget that when Germany, in 2013, asked for the return of 674 tonnes of their gold primarily from the Federal Reserve and some from France, they only received 5 tonnes. They were then told that they could get the rest back by 2020. They then announced that they actually received around 150 tonnes back in 2014.

But Germany has since stopped repatriating their gold, with Merkel declaring that Germany is happy holding its gold in the United States. Egon Von Greyerz, King World News

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About Dave Kranzler:

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.