The Truth About The Gold Being Drained From GLD!

• The Truth About The Gold Being Drained From GLD! 
  by http://truthingold.blogspot.ca/ 
  In over 30 years of studying, researching, trading and investing in the financial markets, I have never seen the contrarian signals flashing as bullishly as they are for gold right now.  –  Link: Update On Gold:  Is This The Bottom? 
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  It’s really quite astonishing.  Especially the degree to which the negative media reports – especially from Bloomberg News and CNBC – are piling up like dead bodies in the aftermath of the Mt. Vesuvius eruption.
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  I want to “connect some dots” for everyone who has been worried about the rather large liquidation of gold from GLD.  In fact, media citations of this gold drain have proliferated like the odor of burning marijuana in the streets of Denver now that pot has been legalized (trust me, it’s everywhere).
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  But what is really going on?  Let’s look “under the hood” at some relevant information that is being left out of a lot of the financial reporting in the U.S.  To begin with, the way gold is put into or taken out of GLD is via the Authorized Participants.  These are the primary market makers in GLD shares.  When they collect a basket of 100,000 shares from buyers or sellers, they take the cash proceeds and either buy gold to move into GLD or buy gold from GLD to remove the gold from the trust.  The current list of AP’s, at least according to GLD’s latest 10-K filing are:  Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sach, HSBC, JP Morgan, Merrill Lynch, Morgan Stanley, Newedge (a online hedge fund oriented futures bookie), RBC, UBS, and Virtu Financial (another online hedge fund bookmaker).
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  If the price of gold – for whatever reason, legitimate or not – gets crushed, it will tend to generate a lot of selling in the shares of GLD.  In turn, that will generate the ability of the AP’s to collect 100,000 share baskets and convert those baskets into gold that is removed from the GLD vault and into the “custody” of the specific AP who is turning in the shares.  At today’s price of gold, 100,000 shares represents about $14.2 million – 9,627 ozs of gold, or roughly .29 tonnes.  Since the beginning of the year, roughly 293 tonnes of gold has been drained from GLD, which had 1350 tonnes in it – allegedly – on 12/31/12.  Nearly 30% of the total amount of gold that has been drained from GLD occurred in the 3 weeks since the April 16-17 price massacre.
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  So where, you might ask, is all this gold going?  It’s not just vaporizing into thin air.  Using today’s price of gold, 293 tonnes is worth about $14.5 billion.  If you look at that AP list above, all of them except the two hedge fund bookies are LBMA “bullion bank” market makers.  Unless these bullion banks are keeping the gold for themselves – and if any of them were, it would have to show up in the footnotes of their next 10-Q – that gold is being delivered to buyers of it on the other side.
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  read more!

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