There was no JP Morgan Vault Fire, but there are enough real stories out there to warrant watching what the spot gold price does when it opens tonight.
Last night, a Comment by That-1-Guy in an ongoing TF Metals thread broke the news that there was a fire at the JP Morgan Vault, per a video on Ustream. Indeed, there was video that showed many fire trucks at the scene – which happend to be 15 Broad in New York.
SilverDoctors subsequently ran with the story, further reporting that the FDNY confirmed a vault fire at JP Morgan via Twitter:
MAN ALL HANDS 15 BROAD ST, COMMERCIAL FIRE IN A VAULT,
— FDNY (@FDNY) July 20, 2013
ZeroHedge Sets the JP Morgan Fire Story Straight
There was not a fire in the JP Morgan Gold Vault, which is actually located elsewhere. Read the ZeroHedge Story with maps and background information for a factual update on the supposed JP Morgan Vault Fire. Then remember to be weary of what you read in the blogosphere.
Many wanted to believe the story true, for a reason. ZeroHedge had reported on Friday that JP Morgan’s Registered Gold Inventory dropped 66%, leaving somewhere between 40,000 and 50,000 ounces of gold. It is easy to see how a more conspiratorially minded person that has been following the declining gold inventory story might jump on the idea that a fire was intentionally set. A fire, the thinking goes, would solve the dilemma and prevent an official default by triggering Force Majeure, a contract clause that would relieve JP Morgan of any obligation to deliver gold to those requesting delivery.
There was indeed skepticism that the reports of a fire in JP Morgan’s gold vaults were accurate. Indeed, wishful thinking fueled the fantasies of those waiting for a true default at COMEX, or JP Morgan, or other gold depositories. We may never really know what happened on Saturday, and the FDNY tweet certainly helped to mislead, but the timing of the fire report was just too perfect, and cautious skepticism on the part of many blogs proved prudent. Nevertheless, it is clear that something historic is truly taking place in the gold markets.
We are sure to be treated to much more interesting news in the days and weeks ahead.