COMEX deliveries and registered gold (silver too)

pmbug

Your Host
Administrator
Messages
7,541
Reaction score
48
Points
203
Location
Texas
An extreme dislocation in the global gold market earlier this year spurred banks to shift some positions out of New York futures and into the London over-the-counter market, according to a leading figure in the industry.

Market participants’ changing behavior is reflected in gold trading volumes in the two hubs, said London Bullion Market Association Chief Executive Officer Ruth Crowell. The amount of gold traded in the U.K.’s capital surpassed the U.S. futures market in recent months, she said.
...
“The scale of the dislocation has really made everyone ask questions in terms of the ongoing approach of hedging long London, short Comex,” Crowell said in a phone interview. “Certainly in the short to medium future, it’s not an even hedge. So they’re having to either go OTC, or they’re reducing their trading appetite.”

The London market, which the LBMA represents, has historically been the main hub for trading in spot gold. But volumes of swaps and forwards, which traders can use as a hedging mechanism instead of Comex futures, have increased recently, according to LBMA data. While the volumes remain below those in the futures market, they have risen to the highest relative level in records going back to November 2018.

Crowell pointed to a day of record trading volume in the London market on May 26 -- when 67 million ounces of gold, worth $115 billion, changed hands -- as evidence of some traders shifting positions into the London market.

If it is sustained, the shift risks undermining the popularity of the gold contract on New York’s Comex, which is owned by CME Group Inc. and is the world’s leading venue for trading precious-metals futures and options.
...
 

pmbug

Your Host
Administrator
Messages
7,541
Reaction score
48
Points
203
Location
Texas
...
In an open and transparent market where full gold trade data including Exchange for Physical (EFP) and gold allocation trades were published in real time, all market participants would instantly assimilate and understand the late March event and its aftermath, and with those full facts the market would instantly and accurately be able to predict and monitor the succeeding chain of events – which by the way – are still in motion, a case in point being at the COMEX, where right now unprecedented numbers of COMEX gold futures contracts are moving into delivery.
...
Central to the delivery process of COMEX gold warrants between shorts (the gold sellers) to longs (gold buyers) is a CME report called the COMEX Metals Delivery Notices report, also known as the Metals Issues And Stops report. This report is published in daily, monthly and year-to-date versions and can be accessed . Now more than ever, this report is worth looking into since COMEX “delivery" numbers have literally ‘gone off the charts".
...
On 31 March, a week after the 23/24 March spot – futures blowups and the first notice day for the then active April gold futures, COMEX watchers were stunned when a huge 17,302 contracts representing (1,730,200 ozs or 53.81 tonnes) of gold appeared on the Delivery Notice report, which was 56% of registered stocks on that day or 67% when of registered stocks excluding pledged gold.

Over subsequent days in April, this number expanded to a massive 31,666 contracts (98.5 tonnes), a record at the time. To put this into perspective, for the 3 preceding months January to March, a combined total of only 13,864 contracts had gone to delivery, an average of 4,621 per month. Now April’s report was showing nearly 7 times that amount.
...
While the April deliveries of 31,666 contracts were unprecedented, that was just a warm up, something which became apparent when the intent for deliveries notices for the June contract started showing up from late May onwards. On 29 May, first notice day for June deliveries, COMEX released a report showing that short holders had indicated that they were moving an incredible 28,375 contracts for delivery on the first day, which was nearly as many contracts as went through in the whole of April, itself a previous record month. From there the contracts intending to deliver just piled, over 7,000 the next day, 6,000 the day after that, to a situation where there are now 52,010 June contracts lined up for delivery. That’s 5,201,000 ozs of gold or 161.7 tonnes. With June Open Interest now at tiny levels, it looks like 5.2 million ozs is now more or less the amounts of gold warrants which will be delivered for June. ...
...
With 5,201,000 ozs of gold (161.7 tonnes) involved in these delivery notices, this is interestingly just a few tonnes more than all the gold that was exported from Switzerland to the New York during March and April, i.e. 42.7 tonnes in March and 110.6 tonnes in April, for a combined 153.3 tonnes.
...

I don't pretend to understand the full implications of this, but it's clear that some deep pockets are wanting physical gold and the COMEX is straining to accommodate the demand. The dollar price of gold has traded more or less sideways in recent days. If this demand for physical maintains pace on the COMEX, I would think it's going to put upwards pressure on the gold price.
 

pmbug

Your Host
Administrator
Messages
7,541
Reaction score
48
Points
203
Location
Texas
The chaos that engulfed the gold market in March as the global pandemic choked off physical trading routes is rippling through other precious metals, resulting in price dislocations and a surge in exchange inventories for silver and platinum.
...
On Monday, first-notice data for the July silver contract on the Comex in New York showed the largest single day of deliveries in almost 25 years. Deliveries for platinum on the New York Mercantile Exchange were more than five times the next largest month this year.
...
... The spread between silver futures and spot prices ended the second quarter at the highest in nearly four decades. Platinum’s EFP spiked to the highest since early 2008. And palladium had the largest spread on record, dating back to late 1993.

The turmoil caused stockpiles to jump amid efforts to meet the apparent shortages. On-exchange inventories for silver and platinum surged to a record and remain close to those levels.

Meanwhile, futures positions have been shrinking in the wake of the pandemic-induced dislocations, creating a glut of metal akin to gold’s stockpiles. Platinum open interest, a tally of outstanding futures contracts, is near the lowest in eight years and is down more than 56% from a peak in January. Open interest in silver futures is down nearly a third from a February high. ...
 

pmbug

Your Host
Administrator
Messages
7,541
Reaction score
48
Points
203
Location
Texas
So back in May (see post #180 in this thread), it was reported that the Swiss were diverting most of their gold exports to the USA to help out the COMEX. Looks like they got everything back under control...

Swiss exports of gold to the United States all but halted in August while shipments to China and India rose, customs data showed on Thursday, suggesting a big transfer of bullion to New York that followed the coronavirus outbreak has run its course.
...
Switzerland, the world’s biggest gold refining and transit centre, shipped 412.9 tonnes of gold worth $22 billion to the United States between March and July but just 23.7 tonnes to China, Hong Kong and India combined, Swiss customs data shows.

In August, however, U.S. shipments fell to 28.5 tonnes and were almost offset by 26.8 tonnes of gold coming into Switzerland from the United States.
...
 
Top