The Comex report for last month correctly identified a large potential move in silver while the same report two months ago preceded a massive rise in the price of gold. This month's data is not as clear or convincing, but it is clear that pressure on the Comex continues to build.
The CME Comex is the exchange where futures contracts are traded against gold, silver and other commodities. The CME also allows buyers of futures contracts to turn their contracts into physical metal via delivery. You can find more details on the CME here (e.g. safe types, major/minor months, delivery explanation, historical data, etc.).
The data below examines the execution of contracts in which ownership of physical metal changes hands in CME vaults. It also shows data that details the movement of metal into and out of CME vaults. It is very possible that if there is a run on the dollar and a flight to gold, this is the data that will show the first warning signs.
Gold
May is a minor gold delivery month. The amount of deliveries this month was actually quite low. The 2,371 contracts constitute the smallest volume of deliveries since July 2021.
Figure: 1 Recent delivery volume for a similar month
Net new contracts are the primary reason for low shipment volume. Contracts delivered after the start of the delivery window are one of the lowest in recent history.
Figure: 2 Cumulative net new contracts
Inventory levels have been very stable over the past few months, with just a slow decline in recorded inventory.
Figure: 3 Inventory data
As the prime delivery month of June approaches, open interest is running well above average.
Figure: 4 Open interest countdown
This is seen most clearly on a relative basis where the current level of contracts to registered metal is the highest in recent months.
Figure: 5 Open Interest Countdown Percentage
Money
May delivery is a big delivery month for the money. The volume of deliveries reached its highest level since September 2022 with 6,107 contracts delivered.
Figure: 6 Recent delivery volume for a similar month
Unlike previous months, this development is not due to net new contracts, which represent only 500 of the total contracts delivered.
Figure: 7 Cumulative net new contracts
Registered and eligible were plotted separately to make the graphs more readable. Eligible people saw a significant drop in May after a sharp increase in April.
Figure: 8 Inventory data
Registered securities experienced the opposite action with a significant upward peak and only a few deviations during the month. This increase likely represents a measure by the CME aimed at consolidating available stocks and reducing market tensions. This obviously did not have the effect of keeping prices under control.
Figure: 9 Inventory data
As we approach the June delivery period, you can see that the silver contract has been surging higher in recent days.
Figure: 10 Open interest countdown
Even with the recent increase in registered contracts, the increase in contracts reached an all-time high on a percentage basis.
Figure: 11 Open Interest Countdown Percentage
Conclusion
Comex data continues to show a physical market under tension. This clearly translated into higher prices. Although prices may consolidate, data shows that the bull market still has plenty of room to run.
The data source: https://www.cmegroup.com/
Data Updated: Every evening around 11:00 p.m. Eastern Time
Last updated: May 24, 2024
Interactive charts and graphs on gold and silver are available on the Explore finance dashboard: https://exploringfinance.shinyapps.io/goldsilver/
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