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.
Gold demand grew by 18% to 4,741 tons in 2022, the highest demand in 11 years, according to data compiled by the World Gold Council.
Massive central bank purchases coupled with strong retail investor buying and slowing outflows from ETFs drove overall demand higher.
The Fed has a targeted balance sheet reduction of $95B a month. The Fed has failed to meet its target in 7 of the last 8 months with only an $81B reduction in January.
The Fed fell woefully short of meeting their $35B MBS target, seeing only $16.7B (less than 50% of the target). The Treasury target was met.
With a debt ceiling debate now underway, a dumb idea has once again raised its ugly head – the trillion-dollar coin. This week on the Friday Gold Wrap podcast, host Mike Maharrey uses this so-called “solution” to the debt ceiling problem as an opportunity to teach some economics. In this episode, he also touches on the GDP data that came out yesterday.
The price analysis last month titled Gold and Silver are Setting up for a Strong Advance in 2023 highlighted that both metals had shaken off the weakness and looked to be headed higher. It concluded by saying…
As we’ve reported central banks globally have been piling in gold. The question is why?
For the first time ever, the money supply contracted on an annual basis in 2022.
The seasonally adjusted Money Supply in December was negative for a fifth consecutive month, coming in at -$147B. This was the largest monthly contraction in M2 going back to 1959. This type of contraction typically does not happen!
Gold deliveries in January have reached 6,327 contracts with only 178 remaining in open interest. While this fell shy of the last five minor months, there are a few signs that are noteworthy.
First, the delivery volume was greater than last January. This is important because January is typically a slow month after the major December contract.
A bill filed in the Tennessee Senate would establish a state bullion depository. This would not only create a safe place to store precious metals; it also has the potential to facilitate the everyday use of gold and silver in financial transactions in the Volunteer State and undermine the Federal Reserve monopoly on money.
The flow of gold and silver out of Comex vaults has slowed in recent weeks, but there is no question that metal continues to move out.
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.
