In 5 days, the COMEX has seen 4,190 contracts open and stand for immediate delivery. This is the strongest start to a month going back at least 2 years, which includes the start of the war in Ukraine and the February 2021 Reddit silver squeeze.
Silver has seen a relatively weak delivery to start the action in May. While this could be considered disappointing to some who were looking for fireworks, a look beneath the surface shows that all is not well.
Silver delivery from the COMEX was low in April, but there is more to the story.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
Gold has been seeing a large number of contracts roll in the final day of the contract. That did not happen this month. This has resulted in a large delivery volume.
Gold is wrapping up March, which is a minor delivery month. While it was a decent delivery month, it was the smallest minor month since November 2021.
Given the potential impacts of the ongoing banking crisis, I will start this article with the conclusion.
The current banking crisis could not have come at a worse time for the Comex system. Inventories have seen massive depletion over the last 2+ years as investors have slowly been pulling physical out of the vaults. I have previously called this a run on the vault but labeled it as a stealthy one. As though certain investors did not want to raise the alarm, but slowly take possession while inventory was still available.
This month, the conclusion is going at the top because it can be hard to read through and interpret all the data.
In a nutshell, the data is sending mixed signals. Delivery volume is slowly drifting lower, but some of the underlying data is starting to show large deviations from the mean. In particular, silver saw a lot of contracts wait until the last minute to roll, similar to what we saw with gold last month.
Why?
Gold deliveries in February came in quite low for a major month, totaling only 15,055. This is the lowest month going back to February 2020 (pre-Covid). The chart below shows the big spike in deliveries seen after Covid started. While the current month is still above any pre-Covid month, it is small when compared to some of the major delivery months seen recently.
Gold inventory in COMEX vaults declined by nearly 5% in a single month.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
Strange activity continues at the Comex!
Delivery volume for February was a little less than half the contracts open at first notice. 6,005 contracts were delivered with 7,370 remaining in open interest. This was a much larger relative delivery than December which saw less than a third of contracts delivered on the first day. Things seemed suspicious back in December, but this month had a potentially bigger red flag.
