Comex Results: Gold and Silver Fail to Deliver

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by Peter Schiff, Schiff Gold:

Gold: Recent Delivery Month

Gold started July delivery with 937 contract outstanding. This is the lowest level since November of last year and the second-lowest since the start of Covid (see figure 2).

As the chart below shows, about 82% of those contracts have been delivered in the first two days. At the current pace, this will be the weakest minor month delivery volume since at least 2019.

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Figure: 1 Recent like-month delivery volume

The chart below shows the current weakness in contracts outstanding on First Notice (green bar). Other weak months have seen strong delivery volume in the form of net new contracts mid-month (red bar). July would need a pretty big surge to see similar delivery volume of recent minor months. On the first day, 84 contracts were opened mid-month for delivery.

Figure: 2 24-month delivery and first notice

So far, the bank house accounts have delivered out about half the metal. Bank of America is absent after a small showing last month and was quiet in the last minor month.

Figure: 3 House Account Activity

From a dollar perspective, this July is closer to pre-Covid levels. Even after the 253 current outstanding contracts are delivered, total dollar volume will be well below July 2021 when the price of gold was much lower.

Figure: 4 Notional Deliveries

Despite the lack of delivery interest, metal continues to leave the Comex vaults at a pretty fast pace. The chart below shows how the vaults have been losing about 100k ounces a day fairly consistently.

Figure: 5 Recent Monthly Stock Change

Gold: Next Delivery Month

August is showing open interest that is slightly above recent history. It’s only below April and June 2022 but comfortably above most of 2021 except for February.

Figure: 6 Open Interest Countdown

The chart below shows deliveries for the last several major months. Delivery volume in June was fairly strong, even beating out last June. Last June was followed by a strong August before October and February saw large dips with a strong December in the middle. Perhaps a similar trend will emerge this year.

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