Gold and Silver Both Drain from Comex Inventory

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by Peter Schiff, Schiff Gold:

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 data at the Comex to show the physical movement of metal into and out of Comex vaults.

Registered = Ready for Delivery,

Eligible = Warrant assigned but can be made available for delivery

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Current Trends

Over 1 million ounces of gold left the Comex vaults since August 1. This continues the current trend that has been in place since Mar 2021 of metal draining from the Comex.

Figure: 1 Recent Monthly Stock Change

The same has occurred in silver as well. While July and August saw some inventory added, the drainage has begun again in September. Specifically, Registered (silver available for delivery) declined by 5.5M ounces. Registered may have increased by 3.7M since Sept 1, but that is really people taking ownership of the bars and leaving them at the Comex.

Figure: 2 Recent Monthly Stock Change

The table below summarizes the movement activity over several time periods.

Gold

  • In the last month, the Comex lost 1m ounces of gold which is 33% of the total over the last 12 months. This means the trend is accelerating.
    • The latest week saw a slowdown of only 31k ounces, so it will be interesting to see if this picks back up.

Silver

  • In the last week, silver saw a whopping 1.2M ounces leave Comex vaults and nearly 3.8M leave Registered.
    • Both these figures represent about 10% of the total over the last 52 weeks.
    • As Figure 2 above shows, the drainage of silver was strong from Feb to June. The recent activity may demonstrate the drainage trend has continued in the face of falling prices.

Figure: 3 Stock Change Summary

The next table shows the activity by bank/Holder. It shows where the large supply came from in 2020 (see charts below) and also where the drainage has been coming from recently.

Gold

  • Over the last month, every vault except one (Deleware) has seen gold supply drain or stay flat.
    • Even Manfra saw 112k ounces drained and they are the only vault in positive territory over the last 12 months

Silver

  • The activity in silver has been more complex with some vaults adding and others losing.
    • JP Morgan and Manfra lost 1.6M ounces in the last week alone where Delaware added 400k
    • JP Morgan has lost almost 3M ounces in the last month which represents 1.5% of their massive war chest of silver

Figure: 4 Stock Change Detail

Historical Perspective

Zooming out and looking at the inventory for gold and silver since 2016 shows the impact that Covid had on the Comex vaults. Gold had almost nothing in the Registered category before JP Morgan and Brinks added their London inventory with nearly 20m ounces. Prior to Covid, this meant that almost no gold was available to move from Registered into Eligible. That changed quickly but since the start of 2021 available inventory has been declining. It remains well above pre-Covid levels though.

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