Comex' corner (and their COT report)

[Peter89]

COMEX is the primary futures and options market for trading metals such as gold, silver, copper, and aluminum. COMEX is an abbreviation of the exchange's full name: The Commodity Exchange Inc.
COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and became the platform responsible for its metals trading.
In 2008, the CME Group purchased the NYMEX, including its COMEX division.

• COMEX is the world's largest futures and options trading for metals.
• It is a division of the Chicago Mercantile Exchange (CME) Group.
• Metals futures are mostly used for hedging and are not typically delivered.
• The COMEX does not supply metals but instead acts as an intermediary.

It is important to note that the COMEX itself does not supply precious metals. These are made available by the seller as part of the contract rules. A short seller that does not have the metals to deliver must liquidate their position by the last trading day. A short that goes to delivery must have the metal, such as gold, in an approved depository. This is represented by the holding of COMEX-approved electronic depository warrants or warehouse receipts, which are required to make or take delivery.


The Commitment of Traders (COT) report is a weekly publication that shows the aggregate holdings of different participants in the U.S. futures market. Published every Friday by the Commodity Futures Trading Commission (CFTC) at 3:30 E.T., the COT report is a snapshot of the commitment of the classified trading groups as of Tuesday that same week.

The report provides investors with up-to-date information on futures market operations and increases the transparency of these complex exchanges. It is used by many futures traders as a market signal on which to trade.

investopedia.com

 

[Peter89]

Massive Comex deliveries​

Market report. And a look at Asian bullion demand​

The stand-out feature is the acceleration of deliveries — 2,005 gold contracts were stood for delivery this week, making the total for February 18,118 contracts, representing over 1.81 million ounces (56.35 tonnes).
In silver, yesterday the figure was a huge 2,858 contracts of 5,000 ounces each (444.47 tonnes), making the total for February 563 tonnes.

When Comex set up these contracts, this was never expected; contracts were meant to be closed at expiry and delivery was the notional means of tying the paper contract to the metal.

This problem has been building for some time. The question which arises is where is it all going?
We know that central banks are adding to their reserves, and for some of the minor ones a Comex contract allows them to jump the queue for delivery from the refiners. To this we can almost certainly add ultra-high net worth individuals and their family offices, not so much in the west, but one suspects in Asia, where new billionaires are being created: think India.

Chinese demand continues apace, where deliveries out of the Shanghai Gold Exchange in January were a whopping 271tonnes, only the second highest figure to 285.5 tonnes in July 2015. In the last twelve months, these deliveries totalled 3,344 tonnes which is approximately annual global goldmine output.

Massive Comex deliveries

Market report. And a look at Asian bullion demand

alasdairmacleod.substack.com

 

[TheRealZed]

Feb was 20754 contracts delivered.

December was 15134, normally the big month.

Jan was 7300, pretty tasty for Jan.

 

[Peter89]

Swap dealers are traditionally short. Like the producers, but they are not producers, they are financial institutions.

Comex, Silver, Disaggregated COT report, 3 years
Above silver price, below swap dealers position

In the last 3 years Swap dealers were never wrong.
100% betting success.
Their positioning is by far a much better indicator than any technical indicator.
When their net position enters the positive field it's time to start accumulating your calls or whatever vehicle traders use to go long.

After every swap dealers' buying cycle, silver goes up.
Sometimes it goes up for a couple of weeks, sometimes for a couple of months.
Sometimes it goes up a lot, sometimes less.
But it will go up.

so, where are we now
1 year chart
Swap Dealers = 1,700 net long
Money Managers = 4,000 net short

 

[TheRealZed]

In theory, all three lines together should net out to 0. Every short has a long side...

 

[Peter89]

In theory, all three lines together should net out to 0. Every short has a long side...

Yes
The sum of the net short and long positions must be equal to 0

Actually the so-called disaggregated COT report distinguishes traders in 4 groups,

1. Money Managers
2. Producers/Hedgers
3. Swap Dealers
4. Others

so there are 4 lines.

I showed the Producers/Hedgers too (- 34k net short) because I forgot to delete that line : )

 

[pmbug]

Around the 17-18 minute mark, McGuire claims that COMEX is close to a default (about 7 minutes on this subject).

 

[nickndfl]

I guess the COMEX is making the other countries buy back their own gold?