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

www.tfmetaslreport.com/subscribe

About the Author

Founder
tfmetalsreport [at] gmail [dot] com ()

  201 Comments

  Refresh
yesca6
Aug 2, 2016 - 2:47pm

Silvercrest Halted? Update

If anyone cares, IR said they were halted due to big move up since Friday. Casey Research put out a buy on this stock last week. SVCMF will be putting out a pr release asap. They are trading on the greys as many juniors start out. Not too surprising considering it is such a small cap stock. I am happy to see it finally move. It has been one of my worst performers, only up 600% since my first buy.

Lemming
Aug 2, 2016 - 2:42pm

Off Base

Redley, your basic premise is correct. On the 1000 point day in October 1987, everything got sucked into the vortex. Not only every form of equity, but PM's too. Most of that is due to margin calls, dump everything to raise money.

However, we are in a totally different environment today, the capital has to go somewhere, even during a panic. If the market starts down big, where do you run? To bonds at all time highs? To stocks as they're collapsing? To illiquid real estate? To cash when it no longer pays anything to hold?

None of the traditional safe havens are acceptable. Yes, is it dawning on you? There is only one place to run, PM's, and yes, it will be like trying to squeeze Niagara Falls through a soda straw.

The caveat however, is that after the initial panic, and the inability to squeeze the flood of escaping capital through a straw, the next logical alternative will be to purchase gold and silver that is still in the ground, since above ground supplies will disappear faster than free beer at a biker rally.

So, my guess is that mining stocks will get sold during the initial panic, then bought huge shortly thereafter.......

BillD
Aug 2, 2016 - 2:37pm
LostMind
Aug 2, 2016 - 2:36pm

Rickards: Fed Will Push Silver to the Moon

Rickards: Fed Will Push Silver to the Moon

See, all is right in the world now. Rickards is officially on the Silver bandwagon...

Remember the Yuan is getting thrown into the SDR mix SEptember 30..

Last time this happened, the creation of the Euro, the Jap Yen strengthened in value almost by 2:1 to the US$. That won't happen this time, but it is of interest that the YEN is to strengthen as the Yuan is added officially to the SDR?!?!

Forcing the Yuan to stay higher versus devaluing against the US$ before inclusion begins...

Swineflogger
Aug 2, 2016 - 2:25pm
Redley78
Aug 2, 2016 - 2:14pm

Am I way off base here?

Question related to the miner stocks: We all know gold is up today right? But a lot of miner stocks are going down or are basically even. I know, as do all Turdites, dont sweat the small stuff, tick by tick, etc. But my question is with the USD/JPY falling down on its ass, so does the S&P. And guess what...the miner stocks are headed downward too.

What most people have been talking about on this site, outside of the miner stocks and the price of gold and silver, is how we expect the stock market to eventually crash, DB to crash, etc. Who knows what could send this delicate world economy over the edge and make the dominoes start to fall. Since our miner stocks are equities, wouldn't they crash ALONG with the S&P and DOW? I think they would be the first to recover, as they did in 2009, but i dont think i would want to hold out for over a year and wait for that to happen.

Sorry for the rant, but theres a lot riding on the line for people with miner equities and i think this point has been overlooked possibly??? I say overlooked in the sense that if the economy crashes, then so will our miners, even though the price of gold and silver go up! (Yes, i have my solid portfolio of physical)

Ok, you guys can blast me now, but at least i feel better about writing this and seeing what kind of response i get.

Doople
Aug 2, 2016 - 2:00pm

Hey Mickey!

The correct term is "You can lead a horse to water, but you can't make him fxxk the fish!

tyberious
Aug 2, 2016 - 1:57pm
surfeitndearth
Aug 2, 2016 - 1:55pm

Edumucation...

According to the great French scholar, Jacques Ellul: "As education is primarily preconditioning for propaganda, those most educated are most easily propagandized."

tyberious
Aug 2, 2016 - 1:54pm

The "Age Wave" is Upon

The "Age Wave" is Upon Us

Dear Reader,

No single threat to the western world is as imminent and enormous as the demographic shift known as the "Age Wave." Born straight after the 2nd World War, the Baby Boomers are the largest and wealthiest generation in the history of mankind. In the United States alone, there are about 80 million boomers.

When the boom occurred between the years of 1946-1964, the western world began servicing the needs of this generation, and businesses that excelled at providing for their needs were rewarded generously.

In the ‘50s, these infants made companies that sell baby products such as formulas, Gerber, and diapers rich.

When they were small, toy companies like Hasbro flourished.

As teens, they enriched McDonald’s and KFC. As young adults, they began buying cars and real estate, fueling bubbles and building new cities. In the ‘90s, they became fascinated with technology, and we experienced the dotcom bubble.

Since the 2000s, they have begun hitting retirement.

That is why we suggested that our members take a look at this company as a long-term core holding in "Make a Fortune From Cradle 'Til Grave". Every 10 seconds, a boomer celebrates their 65th birthday. This generation has been promised benefits that cannot possibly be financed by the next generations' tax receipts, and therefore the U.S. government has no choice but to either:

1. Cut benefits severely (default on their obligations).

2. Delay the retirement age by a decade – to 73 years old.

3. Create new currency and fall deeper into debt – much deeper.


All of these options spell political unrest, generational challenges and conflicts, inflation, and tough choices. The unfunded liabilities amount to tens of trillions, which is why we warned about the need to become protected now.

This chart shows that the government has been helpless for over a decade.

The boomers collectively own close to 50% of the world's assets: stocks, bonds, and real estate.

When they realize their retirement hopes are a hoax, they will start liquidating their portfolio to fund their livelihood.

The problem is the younger generations can't afford to buy the assets, as they will be taxed to fund the Social Security, Medicare, and Medicaid programs, along with the gigantic defense budget.

This means that right when the largest segment of the population is now becoming dependent and shrinking the workforce and tax receipts, the government’s largest liabilities are coming due, and the boomers will be forced to sell assets at plummeting prices to afford a comfortable retirement. Worse, they will need to keep on working for an extra decade. All of us need Intelligent Asset Allocation and the use Of Chaos Hedges as the necessary 1st step.

I have been researching this topic for well over 10 years.

Last week I was interviewed for a financial show CrushTheStreet.com. In the interview I talk about the fact that right now there are some desperate measures being taken by the Government and the FED.

My research has led me to formulate a financial plan that tackles all possible scenarios. I decided the best way to help you prepare is to reveal exactly what I am doing personally – no holds barred. You can access my 2016 game plan here.

In the report, my favorite way is to be very strategic on what I call “Life-Changers.”

The normal time frame for a successful investment to double is about 6 years, but a Life-Changer takes about 60-90 days to do the same thing.
Two or three successful Life-Changers and your retirement is set for at least a decade of comfort. The most explosive niche to find Life-Changers in is the resource sector. We have researched over 250 and narrowed it down to less than 10 that we believe institutional money will pour into in the next 60 days, driving the price higher and higher. We are patiently waiting for the perfect timing to alert our members.

Today, negative interest rates, coupled with currency printing and massive debt loads, are the perfect catalyst for mining stocks to explode higher – and they have been so far in 2016. This trend won't last forever. We have the next 2-3 years to capitalize while these companies are still under the radar completely.

The "Age Wave" is the single largest threat to our way of living, but you will be light-years ahead of the general public at making retirement a reality, while uneducated boomers struggle to stay afloat.

Best Regards,

Lior Gantz
FutureMoneyTrends.com Contributor
Founder of WealthResearchGroup.com

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

Recent Comments

by GoldHermit, 12 min 20 sec ago
by RickshawETF, 15 min ago
by GoldHermit, 20 min 45 sec ago
by TheYeomanFarmer, 22 min 41 sec ago
by Texas Sandman, 24 min 37 sec ago

Forum Discussion

randomness