October Comex Gold "Deliveries"

130
Fri, Oct 21, 2016 - 1:13pm

As we've been monitoring all year, the total amount of gold allegedly "delivered" through the Comex has soared in 2016. This is simply another anecdotal datapoint of gold demand but the trend is certainly noteworthy, particularly when you see the numbers thus far in October.

We've already written about this trend several times this year. Our most recent article is linked below and I strongly encourage you to read this post as a refresher before you continue.

As noted in the post above, 2016 has seen a very unusual "delivery" pattern for gold on the Comex. Consistent with surging open interest and surging demand for gold in all its forms around the world, "deliveries" of gold through the Comex have increased as well. However, when you compare "deliveries" for 2016 versus 2015, you'll notice that the divergence and increase didn't really begin in earnest until June if this year. See below:

As you can see, for the first six months of 2015, the amount of Comex gold "deliveries" totaled 4,149 for 414,900 ounces or about 13 metric tonnes. Through May of 2016, total Comex gold "deliveries" were 9,683 for 968,300 or about 30 metric tonnes. As you can quickly do the math, this is over a 2X increase and certainly noteworthy on its own merit.

However, beginning with the "delivery month" of June, Comex gold "deliveries" began to explode at a startling pace. Check the charts above again and note the totals over the past four months. For the period June-September 2015, total Comex gold "deliveries" were 8,832 for 883,200 ounces or about 27.5 metric tonnes. For the same period this year, total Comex gold "deliveries" totaled 39,646 for 3,964,600 ounces or about 123.5 mts. This is about 4.5X times the 2015 amount.

And now look at what has happened during the October...a month which is historically the lightest "delivery month" on the Comex calendar. Again, referring to the charts above you can see that the total number of Oct15 "deliveries" was 950 for 95,000 ounces or slightly less than 3 metric tonnes. Through yesterday, October 21, the Oct16 "delivery" total is a whopping 9,163 for 916,300 ounces or about 28.5 metric tonnes. This is over a 9X increase versus the same month last year!

And this gets even more interesting when you drill down into the day-by-day "deliveries" and open interest...

The Oct16 Comex gold contract went "off the board" back on September 29. That evening, there will still 7,393 Oct16 contracts still open and, with First Notice Day pending the next day, all of these remaining contracts had to be fully funded with 100% margin, indicating a willingness and financial ability to take or make delivery. The October deliveries began on September 30 and total Oct16 open interest fell to 4,458 as 2,470 contracts were "delivered" and 465 contracts were liquidated by speculators unwilling or unable to make the 100% margin requirement.

A normal "delivery" pattern would then show a declining amount of open interest in the active "delivery" month as gold is "delivered" and contracts are closed. However, as you can see below, it has been a very busy month. You should also be sure to note the current total:

So, contributing to the total "delivery" number that exceeds last October by a factor of 9.5, there has been a surge of new open interest that has entered the Oct16 contract with the intention of either making or taking immediate "delivery" of gold...electing not to wait for November or the huge "delivery month" of December. The additions of open interest so far total 1,523 contracts for 152,300 ounces or nearly 5 metric tonnes.

Of course, the Comex and CME Group deliberately make it nearly impossible to discern if this is a rush to buy or sell "gold" in October. This new open interest could be a party looking to immediately unload 0,000,000 worth of gold. However, it could also be someone or something looking to buy and take immediate "delivery" of 0,000,000 worth of gold. It could also be some combination of the two...no one can say with certainty. And much of this is the usual Comex Bullion Bank Circle Jerk where one Bank issues out the warehouse receipts while another Bank stops and takes "delivery".

Total Stops: Goldman 2,936, JPM 2,095 and Scotia 819

Total Issuance: Scotia 3,100, Goldman 1,409 and HSBC 532

You can see the entire report here: https://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf

And this is also interesting. Note the sudden involvement of two firms which had, heretofore, had very little if any activity:

More information on those two firms here:

For example, just yesterday, 608 "deliveries" were issued out of the House Account of Macquarie with 533 being stopped into the House Account at Scotia:

But I don't want to get bogged down in the minutiae as this post is not about attempting to unravel the riddle wrapped in mystery inside of an enigma that is The Comex. Instead, we simply wanted to draw your attention to the astonishing increase in the pace of Comex "deliveries". Again, this DOES NOT signal that some sort of Comex delivery failure is imminent or eventual. However, in an anecdotal indicator similar to surging ETF inventories, this massive expansion in the amount of gold allegedly "delivered" through Comex is clearly a sign of a significant increase in demand for gold and synthetic, gold-related investments in 2016. If this trend continues, you can be certain that the new bull market for price, which began early this year, will continue into 2017 and beyond.

TF

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  130 Comments

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tvend
Oct 24, 2016 - 11:12am

Lol

The market moves against those speeches is like betting horse races. I was going to trade this morning's pop by selling EXK but I blinked and it was gone lol

Markedtofuture
Oct 24, 2016 - 10:58am

TD Ameritrade Buys Scottrade For $4 Billion

The previously noted surge in Monday merger announcements, which seek to take advantage of still cheap credit before yields rise, got its latest entrant moments ago when discount brokerage TD Ameritrade agreed to acquire peer Scottrade in a $4 billion cash and stock transaction. Per the press release, "The transaction combines two highly complementary organizations with long histories of helping millions of people invest in their financial futures. For TD Ameritrade, the transaction adds significant scale to its retail business, extends its leadership in trading, and more than quadruples the size of its branch network."

Moments after the announcement, AMTD reported that it missed both consensus EPS est. of $0.38, reporting $0.35 in Q4, as well as revenues which were $829 million, below the est. $837.9 million, suggesting that organic growth in the sector may have peaked and explaining the urge to shift tactically to cheap debt-funded M&A.

TD Ameritrade, the biggest discount brokerage by trade executions, said it expected to realize about $450 million in combined annual expense synergies, and more than $300 million in additional longer-term opportunities once the deal closes.

As disclosed, the terms of the trade are as follows:

The transaction, which has been approved by the boards of directors of TD Ameritrade, TD Bank Group (TD) and Scottrade, will take place in two, concurrent steps. First, TD will purchase Scottrade Bank from Scottrade Financial Services, Inc. for $1.3 billion in cash consideration. Under the terms of the proposed acquisition, Scottrade Bank will merge with and into TD Bank, N.A., an indirect wholly-owned subsidiary of The Toronto-Dominion Bank. Additionally, TD will purchase $400 million in new common equity (11 million shares) from TD Ameritrade in connection with the proposed transaction, pursuant to its preemptive rights.

Then, immediately following that acquisition, TD Ameritrade will acquire Scottrade Financial Services, Inc., for $4 billion, or $2.7 billion net of the proceeds from the sale of Scottrade Bank. The $2.7 billion will be comprised of:

  • $1.0 billion in new common equity (28 million shares) issued to Scottrade shareholders; and
  • $1.7 billion in cash, which includes TD Ameritrade cash ($900 million), a new debt offering ($400 million), and the proceeds from the sale of 11 million shares to TD ($400 million)

Additionally, following the transaction’s close, Scottrade Founder and CEO Rodger Riney will be appointed to the TD Ameritrade Board of Directors.

On a pro forma basis, the combined company would look as follows:

  • 600,000 average client trades per day
  • $944 billion in total client assets
  • 10 million funded client accounts
  • $14 billion in margin balances
  • $149 billion in cash balances

Elsewhere, HFTs everywhere, but mostly at Citadel, are chomping at the bits for a first look at frontrunning all the newly aggregated retail order flow.

https://www.zerohedge.com/news/2016-10-24/biggest-us-discount-brokerage-...

infometron
Oct 24, 2016 - 10:21am

Finger painting

Seems to be an ongoing inside joke at this point...

Markedtofuture
Oct 24, 2016 - 10:17am

Chinese Firm Whose Cameras Took Down The Internet On Friday

Last Friday many Americans woke up to extremely slow or nonexistent internet services after a cyber attack "of unknown origin" on DNS service provider DYN took down much of the internet in the North East. As the day wore on, the attack spread across the country taking out numerous large websites including Twitter, Spotify, Reddit, eBay and the New York Times (we wrote about it here: "DNS Cyber Attack Returns As Northeast Internet Traffic Grinds To A Crawl For Second Time").

Some immediately accused Putin of taking down the US internet in retaliation for accusations of cyber attacks on the Democratic party and Hillary Clinton, although there was no official statement from the US.

Now, while the origin of the attack is still unknown (even though we're sure that Hillary's "17 intelligence agencies" have their suspicions), we're getting a better idea of how the attack was executed. According to Bloomberg, Internet-connected CCTV cameras made by a Chinese firm, Hangzhou Xiongmai Technology Co., were infected with malware that allowed hackers to takeover "tens of millions" of devices to launch the distributed denial-of-service (DDoS) attacks.

A Chinese security camera maker said its products were used to launch a cyber-attack that severed internet access for millions of users, highlighting the threat posed by the global proliferation of connected devices.

The attackers hijacked CCTV cameras made by Hangzhou Xiongmai Technology Co. using malware known as Mirai, the company said in an e-mailed statement. While Xiongmai didn’t say how many of its products had been infiltrated, all cameras made before September 2015 were potentially vulnerable.

The attack, which took down sites including Twitter, Spotify and CNN for long stretches, underscored how hackers can marshal an increasing number of online gadgets, collectively known as the Internet of Things, to disrupt the internet on an unprecedented scale.

“Mirai is a huge disaster for the Internet of Things. XM have to admit that our products also suffered from hacker’s break-in and illegal use," Xiongmai said in its e-mail.

Security professionals have anticipated an increase in attacks from malware that target connected gadgets. In Friday’s instance, hackers launched a distributed denial-of-service (DDoS) attack using tens of millions of malware-infected devices connected to the internet, according to Kyle York, Dyn’s chief strategy officer.

Seems the "internet of things" has it's downsides.

Video...https://www.zerohedge.com/news/2016-10-24/chinese-firm-whose-cameras-too...

Oct 24, 2016 - 10:13am

Seems like we've only seen

Seems like we've only seen this about a million times recently:

Oct 24, 2016 - 9:49am
Safety Dan
Oct 24, 2016 - 9:47am

Older Article But Important Today Gold,1Bil Where Did It Go?

In Iraq, Army blocks mysterious gold rush

June 05, 2003|By Paul Salopek, Tribune foreign correspondent.

KIRKUK, Iraq — Another battered truck hauling what appears to be a dazzling fortune in gold bars was stopped at a routine U.S. Army checkpoint in Iraq on Wednesday, the third such cache of bullion seized in two weeks--and the latest evidence of a huge, coordinated gold-smuggling operation.

An officer with the 173rd Airborne Brigade, the unit that detained the truck near the northern Iraqi city of Kirkuk, said that 1,183 ingots were recovered in the latest bust.

If they are proven to be real gold, the seizure fits a pattern established by two similar gold-laden vehicles stopped by U.S. troops in late May. All the trucks appeared to have originated in Baghdad and seemed to be heading for either the Syrian or Iranian border.

"Same modus operandi," the American officer said, on condition of anonymity. "Mercedes truck. Bad registration. Trying to pass [the gold] off as brass."

More than 4,100 gold bars have been confiscated so far from the rusty beds of old trucks trundling down the bomb-cratered roads of Iraq. The combined value of the gold has been calculated at between $718 million and $1 billion--the worst act of plunder in Iraq since Saddam Hussein's younger son, Qusai, swiped $1 billion in cash from the Central Bank.

The source of such vast quantities of gold in war-bruised Iraq remains a tantalizing mystery.

U.S. officials have kept mum about the case. And ordinary Iraqis fascinated by the tale of the "gold trucks" have spawned a host of conflicting rumors. Some say the loot is Kuwaiti gold seized during the 1990 Iraqi invasion, while others insist it is treasure pried from thousands of looted Baath Party safe-deposit boxes in Baghdad.

Loads are similar..............

Central Command has yet to link anybody, much less Hussein's old Baath Party officials, to the crime. In fact, the unsolved case of the gold trucks appears to be fading from the coalition agenda--a bleak symbol of the monumental scale of the pillaging in Iraq and the indifference of the world to a heist that, anywhere else, would be dubbed the crime of the century.

Wednesday's trove will be tested for authenticity. But some of the recovered gold has been flown to Kuwait for safekeeping, the U.S. Army said. It took six soldiers four hours to load one shipment onto a cargo plane. The gold will be returned to the people of Iraq when a new government is established.

"It was overwhelming to see so much gold in one place," Petit said. "But it was sad too. They found the indentations of wedding rings in some of the bars."

Shaking his head in amazement, he said he wondered how many trucks may have slipped through his checkpoints.

https://articles.chicagotribune.com/2003-06-05/news/0306050213_1_gold-bars-iraqis-saddam-hussein

I'm certain we gave the gold back. I seem to have a problem confirming this... Hmmm.

Joseph Warren
Oct 24, 2016 - 9:01am

USA to Face Worst Crisis in History - - Putin Lessons for Trump

Thoughtful article. I hope Trump takes some of these lessons to heart if he wins. He will have to clean house quickly. -

https://thesaker.is/the-usa-are-about-to-face-the-worst-crisis-of-their-...

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

J Siefert
Oct 24, 2016 - 8:02am

Julian ASSANGE - She's Toast !!

Video unavailable

Idea for the US Judiciary: Go abroad for 6 months vacation where there's no newspapers or Internet.

Blythesshrink
Oct 24, 2016 - 7:53am

I see the MSM propaganda

I see the MSM propaganda how's now started regarding President Duterte in the Philippines

https://www.dailymail.co.uk/news/article-3865842/The-husband-wife-assassin-duo-800-executions-Punisher-Rodrigo-Duterte-s-drug-war-Philippines-paid-100-kill.html

The same story is now running in multiple western media publications. I suspect it's the first of many - but all it will achieve is to speed up Duterte's shift to China; Culturally, men from the Philippines do not let anyone push them around - so thinking you can bully him is a big mistake as Duterte will use the western attacks to shift public opinion further in favour of China.

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