The CME declared a Force Majeure Monday at PAMP’s Manfra, Tordella and Brookes Inc. gold depository, and stated the depository will not be able to deliver physical gold due to “operational limitations” from Hurricane Sandy.

The only thing that surprises us is that HSBC and JPM’s gold depositories were not included in the announcement.  It appears however that for now, those holding MTB warrants will be able to receive gold from Brinks.  The inconvenience and extra cost associated with arranging delivery from Brinks however will likely dissuade many from standing for December delivery, and is likely the true motive for the announcement.   How convenient for the bullion banks in the midst of a physical gold shortage!  ”Um, sorry sir, we apologize, Brinks is having trouble getting through the backlog of MTB delivery requests.  We expect your gold should be delivered sometime in January- February at the latest!”.

NEW YORK–CME Group Inc. (CME) on Monday said that Manfra, Tordella and Brookes Inc., one of the exchange’s gold depositories, will not be able to deliver metal as the lower Manhattan company deals with “operational limitations” almost a month after the arrival of Hurricane Sandy. reports that the Force Majeure will free MTB from the liability of breaching gold delivery contracts:

MTB, one of five depositories licensed to deliver gold against CME’s benchmark 100-troy ounce gold contract, held 29,276 troy ounces of gold and 33,000 troy ounces of palladium as of Nov. 23, according to data from CME subsidiary Comex.

In a notice to customers on Monday, CME declared force majeure, a contract clause that frees parties from liability due to an event outside of their control, for the facility.

CME said that individuals holding MTB warrants, or certificates for a specific lot of metal stored in the depository, may receive gold delivered from Brinks Co. (BCO) in New York. MTB is responsible for any additional costs incurred by customers receiving metal from Brinks, CME said.

The CME states that those wishing to stand for December delivery should not be adversely affected by the Force Majeure:

“This shouldn’t have a material impact on the way market participants are doing business,” a CME spokesman said. ” They’ll still contact MTB if they want to take delivery on contracts,” and MTB will arrange for delivery through Brinks.



  1. How come it takes nearly one month from them to issue this force majeure? At least Harvey states nearly every day they have been busy according to their accounting. Are we able to see the traffic of this vault somewhere, does the accounting match?

    • They can get them but it takes some time for the physical gold to get delivered because maybe the CME is waiting for the mines to produce them. What if everyone starts redeeming their paper gold for the physical ones? I don’t think that the mines will producing enough gold fast enough when that time arrives.

  2. C&P from FB side …

    Well, it’s finally here then. This failure to deliver, in the wake of backwardation over an extended time frame, interspersed with numerous cash bonus offers in lieu of delivery, juxtaposed against the recent ‘accidentally’ soaked and now burned (along with microfiche copies, I’ll venture to guess) DTCC records of title provenance, all serves to dispatch the boy to the belltower … with urgent haste.

    • It’s astonishing to see no reaction from the market on this news. 
      GATA has talked about a Force Majeure for 13 years now and here it is (they always thought it would be the COMEX).

      It appears it will take even more failures to deliver before the real stampede starts.    

  3. We expect your gold should be delivered sometime in January – February at the latest!”

    Translation:  Sorry, but it will take us 2 months to acquire and properly plate enough tungsten bars to fill your order.
    –  –  –  –  –  –  –
    Ed_B made the most appropriate quote on another thread:
    Trust is one of those valuable things that takes many years to create, yet only a moment to destroy.”


    • Or another translation: Sorry but we don’t have enough physical gold to keep up with the demands from the deliveries. Please wait the gold mines to produce enough physical gold.

  4. Maybe it’s an excuse from the CME so that they will get more physical gold to deliver since their current physical gold levels aren’t enough to meet up the demands from the deliveries. I don’t know how a hurricane can affect these types of deliveries.

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