repatriation

FRBNY Gold Repatriation Continues

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After a 3 month hiatus, the gold repatriation continues at the Federal Reserve Bank of New York. There is only 5880 tonnes of foreign gold left in the vault.

This is what it looked like in the past. If you take a good look, you will notice that gold repatriation typically occurs when there is a recession.

Gold Repatriation Update

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While gold is smashed down, repatriation from the Federal Reserve Bank continues. For the first time since decades, we go below 6000 tonnes.

 

And on a side note, remember when we talked about leverage of paper gold against physical gold? We are at it again. When we look at the COMEX stock, we notice that registered gold is at record lows again, while the paper gold is at record highs. Resulting in this second spike.
The first spike was in 15 January 2014, which was a bottom in gold price. I believe this second spike will give us a second bottom in gold price soon.

10 tonnes of gold disappear from FRBNY in December 2014

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With repatriation of gold in the picture, especially when China is gobbling up all the physical gold, we need to keep an eye on the gold deposits at the Federal Reserve Bank of New York.

Each month they issue this report of gold deposits at the FRBNY.
http://www.federalreserve.gov/econresdata/releases/intlsumm/forassets20141031.htm

The value of the gold deposit is calculated at value $42.22/troy ounce.

Take an example December 2014: 8170 million USD of earmarked gold.

So you first divide 8170 million USD by $42.22/troy ounce and then you convert it to tonnes. You get 6018 tonnes.

Now we chart it out over two years and we see that people are not deposition gold in the U.S. Instead they are pulling out their gold from the U.S. FRBNY at a very fast pace. I expect this to accelerate till there is no gold left in the U.S. or something breaks in the rehypothecation scheme.

In December 2014, we saw 10 tonnes disappear from the vaults. Which mysteriously coincides with the 10 tonnes that the Netherlands supposedly added in December 2014.

This is what it looked like in the past. If you take a good look, you will notice that gold repatriation typically occurs when there is a recession.

Belgium Gold Repatriation

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Good job Belgium! Take that Switzerland…

Belgium has 227 tonnes of gold, how much of that is stored in other countries?

It only has a limited amount of gold stored at the Belgium National Bank (BNB); the bulk of Belgium’s reserves is held at the Bank of England, a portion is held at the Bank of Canada, and another portion at the Bank for International Settlements (in Basel) which has been in the manipulation business lately. And I’m sure some of it is in the U.S at the Federal Reserve. Belgium has never disclosed where it held its gold.

Maybe, just maybe they are concerned about this trend down in the GLD physical gold reserves. And there should be a connection between GLD and the Bank of England. GLD’s gold inventory is vaulted in London. They should also be concerned about the LBMA.

The Bank of England is a custodian for central banks and the LBMA. So a repatriation of gold from the Bank of England, could mean some added pressure on the LBMA (if the gold of Belgium is not there). And the GOFO rates at the LBMA going negative are a sign of that.

Here are some additional numbers from a year ago:

https://i0.wp.com/advisorperspectives.com/commentaries/images/Gold_futures.jpg

The traded amount of “paper linked to gold” exceeds by far the actual supply of physical gold: the volume on the London Bullion Market Association (LBMA of which the RBI is a member) OTC market and the other major Futures and Options Exchanges was over 92 times that of the underlying Physical Market.

Now Belgium takes a bunch of physical gold from the Bank of England and the Federal Reserve, who knows what could happen.

https://youtube.googleapis.com/v/jR_E9Vnnrb8&source=uds