Delivery Demand on the Comex Remains at Record Levels for Gold and Silver

The CME Comex is the Exchange where futures are traded for gold, silver, and other commodities. The CME also allows futures buyers to turn their contracts into physical metal through delivery. You can find more detail on the CME here (e.g., vault types, major/minor months, delivery explanation, historical data, etc.).

The data below looks at contract delivery where the ownership of physical metal changes hands within CME vaults. It also shows data that details the movement of metal in and out of CME vaults. It is very possible that if there is a run on the dollar, and a flight into gold, this is the data that will show early warning signs.

Gold

The Comex has seen unprecedented delivery volume in gold since the election as highlighted in previous articles. This has been driven by an arbitrage between the spot and futures market. That arbitrage has now collapsed back to normal levels as shown below.

Figure: 1 Spot vs Futures

Despite the drop in arbitrage, the chart below shows that gold delivery still hit a record for a minor month. May came in at 25,291 exceeding the previous record in February!

Figure: 2 Recent like-month delivery volume

Much of the delivery volume was driven by net new contracts. These are contracts that open mid-month and settle for immediate delivery. This month has seen 16,500 contracts open and settle immediately which is more than 60% of the total delivery volume.

Figure: 3 Cumulative Net New Contracts

Despite the large delivery volumes, inventory levels have actually dropped since the beginning of April. Metal had come surging into Comex vaults, but is now leaving.

Figure: 4 Inventory Data

Looking ahead to the June delivery, gold is poised to have another big month. It is slightly above trend compared to other major delivery months.

Figure: 5 Open Interest Countdown

With the massive surge in inventory, the open interest relative to physical stocks is not as massive as the raw number.

Figure: 6 Open Interest Countdown Percent

Silver

Silver is a major month in May. This May saw the second largest delivery volume going back to 2021.

Figure: 7 Recent like-month delivery volume

Net new contracts were also a factor in silver.

Figure: 8 Cumulative Net New Contracts

Silver eligible inventories have finally slowed.

Figure: 9 Inventory Data

Registered silver continues to increase.

Figure: 10 Inventory Data

As we approach June, the silver contract is very elevated compared to prior months.

Figure: 11 Open Interest Countdown

On a relative basis, open interest is actually quite low because of how much the Comex has restocked silver inventories.

Figure: 12 Open Interest Countdown Percent

Conclusion

The delivery demand at the Comex is unprecedented. As stated many times before, this is where the big moves in gold and silver will come first… and those moves have already happened. The price of gold has reflected this as it has stayed well north of $3,000. The data points to a continued move higher.