JP Morgan Eligible Gold Inventories Fall Another 14% Today

JP MorganGold  COMEX 51513

JP Morgan drops another 22,759 oz of gold (14%) from their Eligible Inventories.  They now only have 137,377 oz available in their Eligible Category.

Furthermore, 32,049 oz of gold were withdrawn from Scotia Mocatta’s Eligible inventories, now reducing the total gold in the Comex vaults below 8 million oz.

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7 Comments on "JP Morgan Eligible Gold Inventories Fall Another 14% Today"

  1. Very excited to see the website up! Thank you for everything Steve. Big fan here.

  2. Brendan… glad to have you come by and take a look. I hope to publish some very interesting stuff here.

    steve

  3. Turning out to be another fine day to be getting Phyzz……

  4. You should do a chart predicting average mining costs in coming years based on the current trends. Looks to be exponential based on your work so far that I’ve seen. Should be averaging in the low to mid 30s this year or so? The jump from teens to 20 to 30s over a couple years is very attractive from an investment perspective.

  5. Brendan… yes, I plan on doing much work in the area of estimated break-even, average yields, financial metrics and future trends in the gold and silver miners.

    As I mentioned in a prior article, the Net Income Break Even in Q3 2012 was approximately $27-28 an ounce. Net income in most instances is a good indication of break-even. I have been in contact with an ex CFO of a gold mining company who said the NET INCOME approach to break even made perfect sense. He said, “That’s why the gold and silver mining companies don’t use it” …LOL

    • You elaborated break even of 27-28 $/oz. But price is now touching 22.
      The explanation of bullish silver people is always market manipulation. I myself have been bullish in the long run, but not convinced the story is as simple as you suggest. Economic common sense suggests in a period of weak demand people use variable cost which is cash cost, not total cost. Miners can stop mining higher cost mines which pulls average cost per oz down. The highest 20% of cost/oz mines may go idle. When investors stop buying silver, as they are being advised by banksters and the media, investor demand turns negative and all of a sudden you have a real significant surplus. No doubt, long term industrial demand for photovoltacis and China demand etc. will push silver up, and then the lower ore grade story becomes a reality and market cannot supply enough silver, but short term anything is possible, even 12-15$. Also, the size of the futures market vs. physical market can easily overrule fundamental supply & demand arguments.

      • Christian… according to my Q3 2012 analysis, the top 10 primary silver miners net income per ounce was $2.53. The average realized price of silver that quarter by the miners was approximately $30 oz. IF we do the math this averages to nearly $27.50 break-even.

        However, this is total NET INCOME, and if we realize that part of that net income is derived from by-product credits then break-even is higher at $28+. These 10 primary silver miners produced 21 million oz of silver that quarter at a rate of 84-85 million oz for the year.

        Furthermore, I recently recalculated the average silver yields for the top 7 silver mines & miners which fell another 6% in 2012. I will be writing about this shortly.

        Christian, while it is true that the miners can cut back on exploration and other items, at the current price of $22+ an oz, the top primary silver miners as a group (minus Fresnillo — they are making more revenue from gold than silver) will show a net income loss of approximately $5 an oz.

        I will explain more about this in upcoming articles and posts.

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