Comex Delivery Volumes Remain at Very High Levels

The CME Comex is the Exchange where futures are traded for gold, silver, and other commodities. The CME also allows futures buyers to turn their contracts into physical metal through delivery. You can find more detail on the CME here (e.g., vault types, major/minor months, delivery explanation, historical data, etc.).

The data below looks at contract delivery where the ownership of physical metal changes hands within CME vaults. It also shows data that details the movement of metal in and out of CME vaults. It is very possible that if there is a run on the dollar, and a flight into gold, this is the data that will show early warning signs.

Gold

The Comex has seen unprecedented delivery volume in gold since the election as highlighted last month and the month before. This has been driven by an arbitrage between the spot and futures market. This can be seen in the chart below. It has normalized some, but is still showing erratic behavior.

Figure: 1 Spot vs Futures

The chart below shows the total delivery volume for minor months in gold. As can be seen, March had deliveries of 18k contracts which is currently just a little bit below January. It is also well above all other months in recent history.

Figure: 2 Recent like-month delivery volume

In January, the massive volume was driven by net new contracts (contracts that open mid-month for immediate delivery). That was less the case in March. This means that the large volume were contract holders coming into the delivery window already prepared to take delivery.

Figure: 3 Cumulative Net New Contracts

Inventory levels have continued to move higher to handle the demand. The chart below shows the increase of metal that exists in the Comex vaults. This gold is coming directly from London.

Figure: 4 Inventory Data

As we head into April (a major month for gold), you can see that current Open Interest is above trend with 5 days to go.

Figure: 5 Open Interest Countdown

With the massive surge in inventory the open interest relative to physical stocks is below trend.

Figure: 6 Open Interest Countdown Percent

Silver

Silver is a major month in March. So far, March has seen over 15k contracts delivered. This is well above any other major months in recent history.

Figure: 7 Recent like-month delivery volume

Net new contracts were below trend in silver but turned around and is now above trend for the month.

Figure: 8 Cumulative Net New Contracts

Similar to gold, the Comex has been working to restock inventories to ensure all the deliveries can happen.

Figure: 9 Inventory Data

Registered silver is also seeing a massive increase.

Figure: 10 Inventory Data

As we approach April, the silver contract is well above trend which demonstrates that the physical demand is not slowing down.

Figure: 11 Open Interest Countdown

On a relative basis, open interest is actually quite low because of how much the Comex has restocked silver inventories.

Figure: 12 Open Interest Countdown Percent

Conclusion

The surges in delivery volume that showed up after the election of Trump do not appear to be slowing. March gold was slightly below the January delivery volume but not by a significant margin. Furthermore, March silver reached new highs. April will be a telling month in gold. The spread between spot and futures has normalized some but the market is still lacking clarity on tariffs. Central Banks around the world also continue to be huge buyers.

Bottom line – physical gold and silver are in huge demand. Unlike the paper futures market, there is a limited supply of physical gold and silver. London gold inventory levels are the lowest in at least 5 years with silver at the lowest in 10 years. If investors grow more concerned it could exacerbate the problem which will likely send the gold price even higher.