Comex Gold Inventories Dropping–Bullish?

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value–Alan Greenspan

Pop Quiz:

Do you think the U.S. Gold price will go up to the moon as inventories of gold bullion drop? Will there be a short squeeze? If inventories drop it means demand is going through the roof and the price will soon follow?   Go to to see this argument used/hawked as a bullish case for gold.

What do you think of this argument?  How is gold different than copper, oil or steel?

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“Hello HSBC, This Is JPMorgan – We Urgently Need Some Of Your Gold”

Tyler Durden's picture

Submitted by Tyler Durden on 08/07/2013 18:21 -0400

What happens when 63.5K ounces of registered gold in your warehouse (16% of total) just has their warrants detached and the vault is about to finds itself 63.5k ounces of gold emptier? If you are JPM you call the gold vault with most inventory in town, that of HSBC, and politely request that they transfer as much eligible gold as they can on short notice – in this case a tiny 6,444.936 oz to be exact.

None of which changes the fact that in a few days, the inventory in JPM’s gold vault will drop to another record low of only 380K ounces and the JPM “rescue” pleas from HSBC and other Comex members will become ever louder and more desperate until one day they may just go straight to voicemail.

Source: COMEX

P.S. Don’t be a “Goldbug” but understand economic reality.

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