A Curious Pattern of Comex "Deliveries"

201
Mon, Aug 1, 2016 - 12:45pm

Even though gold "deliveries" on the Comex are nothing but a charade and shuffle of paper warehouse receipts and warrants, the latest trend is a real eye-opener and appears to be a rather interesting datapoint of extreme demand for gold in all its forms.

First of all, some background so that we're all on the same page...

Through the year, the Comex trades futures contracts for every month on the calendar. However, not all months are treated equally. Six of the months are treated as "delivery months" and these are the contracts which carry the majority of the short-term trading interest and volume. These months are February, April, June, August, October and December, The other six months are considered "non-delivery" and are very rarely traded or utilized as physical settlement contracts. These months are January, March, May, July, September and November.

A quick look at the current "gold board" reveals that, with the Aug16 contract now in its "delivery" phase, the active front month has become the Dec16. See below:

And, as you can see on the next chart, fully 3/4 of the entire Comex gold open interest can now be found in this front month, Dec16 contract:

OK? So, when a front month comes "off the board" as the Aug16 did last Thursday, it moves into its "delivery phase". This is when the entire charade and fraud of "Comex delivery" kicks in, usually characterized by a simple shuffling of paper warehouse receipts back and forth between the various Banks which operate the vaults. We've written about this on countless occasions over the past six years so we're not going to cover all of this again. Suffice it to say that there is very little, actual metal that is ever physically delivered on Comex. The entire process is simply in place to create the illusion of physical delivery in order to give The Bullion Bank Paper Derivative Pricing Scheme some element of legitimacy. That said, what is currently happening on Comex is a shocking trend that requires your attention and consideration.

Let's start by considering how a typical year of Comex deliveries has historically played out. Below is a chart of the delivery totals by month for Comex gold in 2015. Note that the blue bubbles draw attention to "delivery months" beginning with the Dec14 and the red bubbles denote the totals of the non-delivery months.

Do you see how this works? For all of 2015, the six delivery months produced a total gold delivery of 15,070 Comex gold contracts or, on average, about 2,500 per delivery month. Each contract represents 100 ounces of "gold" so the Comex can be said to have "delivered" 1,507,000 ounces of gold in these six months or a paltry 47 metric tonnes. For all of 2015, the six non-delivery months produced a total gold delivery of 1,148 contracts or about 200 per non-delivery month. This comes out to just 114,800 ounces of gold or almost 4 metric tonnes.

Adding this all together...For all of 2015, the Comex "delivered" 16,218 contracts of gold. This was 1,621,800 troy ounces of "gold" or about 51 metric tonnes.

(I don't know. Maybe I should stop here for a moment and let you consider whether, in the grand scheme of things, 51 metric tonnes is really much gold at all. The world produces about 3,000 metric tonnes per year so Comex "delivers" about 1.5% of total mine supply. And yet Comex/Globex electronic derivative trading is allowed to produce the price at which physical transactions take place around the globe. Neat trick, huh?)

Anyway, not to get sidetracked. Let's get back to the alleged Comex "deliveries" and have a look at the startling trend that we mentioned earlier...

Below is a chart of the total Comex gold deliveries thus far in 2016. Note that, as the year began, the amount of "gold" being shuffled around each month is not that dissimilar to 2015 or, frankly, any other year in the past. The non-delivery month of January kicked off the year with just 172 deliveries. Delivery February followed with 2,569. This was more than Feb15 but, all things considered, nothing significant or noteworthy. Non-delivery March saw just 743 and Delivery April had 3,984.

And now here's where things get funky...

Non-delivery May15: 26 Non-delivery May16: 2,215

Delivery Jun15: 2,959 Delivery Jun16: 15,785

Non-delivery Jul15: 728 Non-delivery Jul16: 6,987

Hmmmm. Does this seem a little unusual to you? Me, too. In fact, go back and check the total amount of Comex gold deliveries for ALL OF 2015. Do you recall the number? 16,218 contracts for 51 metric tonnes. This year, the month of June alone nearly exceeded that total at 15,785 and 49 metric tonnes! And the just-completed, non-delivery month of July had a total of 6,987 contracts for 21.73 metric tonnes of "gold". This is FIVE TIMES the delivered total for ALL of the 2015 non-delivery months COMBINED.

And the trend doesn't appear to be reversing in the just-begun delivery month of August. At contract "expiration" last Thursday, the CME reported that there were 14,402 Aug16 gold contracts still open and indicating a willingness to "stand for delivery" this month. As you can see above, delivery notices for 5,028 contracts have already been sent out so August appears set to challenge June's record for total Comex gold "deliveries" in one calendar month.

Quite an interesting trend, eh? This is all definitely something that we will monitor all month and through the remainder of the year.

BUT

At the end of the day, you should be asking yourself "why does this even matter?". As stated above, almost ALL Comex deliveries are nothing more than an exchange of warehouse receipts and warrants and very little physical metal ever changes hands. Therefore, to claim that some kind of "delivery failure" or "default" emanating from the Comex is forthcoming would be naive. The true importance of this information is in its significance as a DATAPOINT OF GLOBAL DEMAND FOR ALL FORMS OF GOLD. Consider:

  • The tonnage of gold flow around the globe...from West to East and from South to North.
  • The extreme and surging growth of "inventories" in the gold ETFs
  • Total open interest on Comex, which by July 11 had grown 73% from January 29
  • Global Mint and Central Bank demand, including China and Russia
  • Interest in owning mining shares has sent the HUI index up over 170% year-to-date

And now we have Comex allegedly "delivering" gold at a never-before-seen record pace.

We are truly in a brave new world my friend...off the map and into the region marked "beyond which be dragons". These historical anomalies in Comex "delivery" are just another datapoint that signals extreme, global demand for gold in all its current forms. Our hope here at TFMR is that, one day soon, the entire Bullion Bank Paper Derivative Pricing Scheme will finally collapse as delivery demands simply overwhelm the Bullion Banks' ability to supply physical gold on a just-in-time basis to an insatiably hungry investment world.

When will this day come? It's impossible to say with certainty given the deliberately opaque nature of the current system. However, the day WILL come and you had best prepare for that eventuality. Buy gold and TAKE PHYSICAL DELIVERY NOW before it's too late because, when the music stops and the paper games end, I can promise that you DO NOT want to one of the sad, uninformed few left holding nothing but a stack of meaningless paper certificates.

TF

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  201 Comments

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MRobrckymtn
Aug 3, 2016 - 1:29pm

socialism?

Socialism doesn't work? You sure? Cos it seems to be working pretty well over here in the UK with the NHS, if you want to call that "socialism"! We pay just over 1/3rd the amount paid per person compared to the USA ($3235 compared to $8713 per capita, and that isn't even GDP adjusted), and the system works just fine, with pretty much the same health/life expectancy metrics as the USA. And although NHS is certainly one if not the cheapest health care system in the western world, other European countries with single payer system still pay massively less than in the USA and have astonishingly good health care systems. Until recently I was dating a (totally hot) German girl, and the system they have over there is sweet, and only a bit more expensive than ours.

Listen, simply saying "socialism is baaad" is too simplistic. There are some things that you can do better if the profit motive is out of the way, and health care and education are two good examples. My brother is an ophthalmologist, works in NHS as an army doctor, and has thoroughly explained to me the pitfalls of "perverse incentive" in health care, i.e. doctors doing unnecessary operations, prescribing drugs that are not needed, etc. And we were free of such things, until the twatmonkeys in the conservative government decided that introducing an "internal economy" into the NHS would improve efficiency. Based on nothing but "government bad free market good" oversimplistic ideological muppettry. And now, thanks Tories, we have unnecessary operations taking place...

The whole left/right paradigm is ridiculous, individual topics need to be assessed on their own grounds, painting everything with the same brush will only make a mess, or a very dull painting. Life is more complex than that.

Peace out...

J Siefert
Aug 3, 2016 - 5:07am
Lemming
Aug 3, 2016 - 3:06am

?

Ivan Panin 1855 - 1942

A Harvard PHD of mathematics and contemporary of Albert Einstein, considered to be one of the top 10 mathematicians of his era. Isaac Newton was the first to discover these incredible patterns. A brief example of Panin's work follows;

Here is an example from the Old Testament. Just the very first sentence in the Bible. "In the beginning God created the heavens and the earth" (Genesis 1:1). That's the way that it comes out in English. In Hebrew it's exactly 7 words. The seven words have exactly 28 (4x7) letters. There are three nouns (God, heavens and earth). Taking the letters of these, substituting their number equivalents and adding them up, you get a combined total of 777 (111x7)! There is one Hebrew verb -- created. It's total numerical value is 203 (29x7). The first three words contain the subject with exactly 14 (2x7) letters, likewise the other four are the object with exactly 14 letters. The Hebrew words for the two objects (heaven and earth) each have 7 letters. The value for the first, middle, and last letters in the sentence is 133 (19x7). The numeric value of the first and last letters of all the words is 1393 (199x7); the value of the first and last letters of the first and last words of the verse is 497 (71x7). The value of the first and last letters of each of the words between is 896 (128x7). And so on, and so on...in this verse alone there are 30 different features of 7. I have listed only 11 of them!! The chance of this happening accidentally is 1 in 33 trillion.

And now an example from the New Testament: Matthew 1:1-11. The vocabulary has 49 words (7x7). 28 words begin with a vowel (4x7), the remaining 21 with a consonant (3x7). 7 end with a vowel, 42 with a consonant (6x7). The 49 words have 266 letters (38x7). Out of the 266 letters, 140 are vowels (20x7), 126 are consonants (18x7). Also, of these 49 words, 14 occur only once (2x7), 35 occur more than once (5x7), 42 (6x7) are nouns, 7 are not. These remaining common nouns have exactly 49 letters (7x7). Male names occur in all 56 times (8x7). The names of only three women appear in the passage, and the Greek letters of their names add up to 14 exactly!

Panin said that it would have taken Matthew several months, working 8 hours a day to construct the genealogy, even if it were possible. But the names were chosen BEFORE MATTHEW WAS BORN!

ONE AUTHOR

The whole Bible is like this. I am just taking one small chunk of it and doing it in detail. Every paragraph, passage and book in the Bible can be shown to be constructed in the same marvelous way. What kind of fantastic collaboration between the disciples could have produced this structure without computers? How could mere fisherman and tax-collectors produce this kind of incredible structuring and design? What is crazy is that Mark is a Roman, Luke a Greek, and Matthew a Jew, but they all wrote with the same pattern. Each one wrote with their own unique flavor. Mark's style is different, but the pattern is the same right through! So who wrote it? One Mind, one Author -- One God -- many different writers, but One Writer. Can you imagine what kind of Mind would do this and not even care if you ever found out?! What I want you to see is how smart God is! These are not just words, it's an incredible mathematical pattern. It dances with its own poetry in mathematics. A computer would go into raptures over this! It's like a building where every piece joins perfectly into each other. And what is wild, is you can't pull even ONE word out, without damaging the whole pattern. So the Bible carries within itself, a self-checking, self-verifying protection factor. If a person comes along and says I don't like this one, the whole pattern falls apart. This cannot be found in any other religious "holy" book in the world.

https://www.ubm1.org/?page=whollyholy

Dr. Ivan Nikolayevitsh Panin (1855 - 1942)

8:21

TF Metals fan
Aug 3, 2016 - 2:30am

Miners down?

Hui went up yesterday with 1.83%. This is not down. Yes maybe in the juniors some went down a bit. My portfolio also went up yesterday.

But when panic will hit the market everything will be cashed (or people on credit accounts will be forced to sell, adding to more selling pressure). Just stay put or buy some at that dip.

tyberious
Aug 3, 2016 - 2:29am

Jim Stone's Site

Here are the jobs, from my extensive technical experience that will be the LAST to be replaced by robots. You had better transition soon.

These jobs require totally unappreciated skills it will take robots 30 or more years to replace.

1. Auto mechanic (your last option, that job sucks.)
2. Plumber.
3. Industrial electrician.
4. Other electricians.
5. EEA - Electronics Equipment Analyst (probably a huge boom coming in this $60 plus an hour field, which requires full industrial electrical skills on top of advanced electronic skills including robotics repair and maintenance and the IBEW will give you all your training, with pay, FREE.) gotta be one sharp cookie for that job though.
6. Construction worker, all types including roads, houses, etc. Robots will do some of this type of work in the future, but only a fractional percentage.
7. Electrical line man (THAT IS A TOUGH ONE, FAT CHANCE ROBOTS WILL EVER DO THAT JOB and it pays real good.) That totally under appreciated job would need star wars level tech to accomplish with a robot.
8. Millwright.
9. High danger random environment crane operator. This would include all boom cranes, and many bridge cranes.
10. Any form of basic industrial maintenance that requires random judgement, no matter how low level.
11. All surveying and inspection jobs, such as dam inspection, land inspection, bridge inspection and determining overall safety of anything infrastructure related. If robots enter this field, they will be for quality improvement under human control with no human jobs displaced.
12. Photographer. Too many judgement skills required to do the job in a way anyone will appreciate for a robot to handle.
13. Paramedic and EMT. Long time coming before robots will do that.
14. Mobile farm working veterinary.
15. Botanist. And this is an expanding field, you will find work.
16. Microbiologist
17. Field welder (hot stick, "holding onto a railing to reach a beam" random job)
18. HVAC tech.
19. Any type of installation job that requires working in a random environment on ladders, etc.

tyberious
Aug 3, 2016 - 2:27am
tyberious
Aug 3, 2016 - 2:19am

Daybreak Poll – Clinton

Daybreak Poll – Clinton Closes on Trump

[Ed. Note: Rothschild-owned Reuters is now openly “tweaking” its polls to give Hillary the boost she needs. This election will be stolen by Rothschild’s choice for President, Hillary. RELATED: Why Reuters is Tweaking Its Presidential Poll]

from Bill Still:

Still Report #1090 – Daybreak Poll – Clinton Closes on Trump
lakedweller2
Aug 3, 2016 - 2:02am

Socialist

He had the best platform going and forced Hillary to modify hers. He also got concessions from the DNC on issues favorable to all of us. Face it that the average guy doesn't have a clue what any of the candidates are about. As a result we have a a disaster of choices with the oligarchs putting one more nail in our coffins. If issues don't matter and only labels carry weight, you've sold our freedom to the best liar and highest bidder.

rckymtnlakedweller2
Aug 3, 2016 - 1:10am

He calls himself a socialist

He calls himself a socialist so....................................I'll take him at his word.

Nobody would be dumb enough to describe themselves as a socialist if they weren't. The only way you could be more dumb than that, would to proudly be a socialist and actually think your ideas would work.

Fred Hayek
Aug 3, 2016 - 1:05am

Mickey and Doople -- remember what Dorothy Parker said

In the 1920's she was one of a group of writers and others who would get together regularly at the Algonquin Hotel in New York. The group was called the Algonquin Round Table.

One day they were playing a game where someone would pick a word out from the dictionary, almost at random and the next person in line would have to immediately use it in a sentence. Another attendee called out the word for Ms. Parker.

Horticulture.

"You can lead a whore to culture but you can't make her think," replied Ms. Parker.

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