FAST FIVE: COMEX Can't Find Any 400 Oz Bars For Its New Gold Futures Contract
NYLON (New York and London) While the pricing suggests that the core ailment relates to bullion bank liquidity problems faced by market makers in the London 'gold' market, this didn't stop the London Bullion Market Association (LBMA) rushing out a statement last Tuesday, March 24, in an attempt to shift focus to CME's COMEX, saying that: “The London gold market continues to be open for business. There has, however, been some impact on liquidity arising from price volatility in Comex 100oz futures contracts. LBMA has offered its support to CME Group to facilitate physical delivery in New York and is working closely with COMEX and other key stakeholders to ensure the efficient running of the global gold market.” Notwithstanding that on Tuesday 23 March, the London market had seen gold bid-ask spot spreads blowing out to US$ 100 and LBMA market makers breaching their responsibility to actively provide two-way price quotations, the LBMA forged ahead with pinning the blame on COMEX, and bizarrely offered to support COMEX to 'facilitate physical delivery in New York'.
ACEs can only be issued against the 400 oz bars, not the smaller 100 oz or kilo bars.” And just like that, when you thought bullion bankers and their frontmen, the CME and LBMA, could not create even more paper gold, they just went ahead and did.
400 oz gold bar – Familiar to central banks but not to COMEX This means there are ZERO ounces of gold in the COMEX vaults in the form of 400 oz gold bars.
For example, while the JP Morgan vault (JP MORGAN CHASE BANK NA) shows positive quantities for gold ounces in the form of 100 oz bars or 1 kilo bars classified as 'Registered' or 'Eligible', the separate 400 oz line items under the heading 'JP MORGAN CHASE BANK NA – ENHANCED DELIVERY (400 OZ AND BRANDS)' shows just repeated 0.000s.
On the other hand, eligible gold is unrelated to COMEX gold futures trading, and could be owned by anyone, for example mints, refineries, jewellery companies, investment funds, banks or individuals.