Loading ...PRESIDENT TRUMP, “MAKING AMERICA GREAT AGAIN”, THE GOLD STANDARD AND A 230% INCREASE IN PHYSICAL GOLD BAR DELIVERIES – ALL CONNECTED?
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Recent dramatic events at COMEX futures exchange, however, increase my level of confidence in my current forecast. As I reported last month, we saw a 729% increase in the demand for delivery of physical gold at COMEX during off-month of January 2017, year over year. This month (February) was a major delivery month, and there was another 230% increase in the delivery of physical gold bars. The huge increase in gross demand for actual physical gold bars is impressive. However, it is not the amount that was purchased but, rather, who was doing the buying that is the most important factor.
The biggest banks in the western world continued to be the biggest physical gold bar buyers during February. In many cases, their own customers are being called upon to deliver the bars to them. In total, about 18.66 metric tons worth of physical gold bars were delivered on COMEX in February. That compares to 7.99 tons delivered in February 2016. The net increase totals out to be 233% year over year, which is enormous.
HSBC, in particular, was the biggest single buyer this month. HSBC bought just over 10.62 tons worth of physical gold bars. Neither it nor its customers delivered much gold to speak of. As was the case when it made massive purchases in 2015 and 2016, these gold bars are now an asset of the bank.
J.P. Morgan was also one of the huge buyers this month. It didn’t buy quite as many gold bars as it did, last month, but it purchased about 2.4 additional tons. In contrast, J.P. Morgan’s customers were called upon to deliver about 10.95 tons, perhaps part of which went into the bank’s own asset base. As the customers scrounged around to find gold to deliver to the banks, they probably propelled gold prices upward in February