YTD total of 215'114 deliveries means that COMEX has been forced to deliver more gold in the first 11 months of 2020 than in the entire 5-year period 2015-2019.
We have lately written on Gold Futures contracts on the COMEX in New York and how the big boys, with the help of the PPT (?), depressed the gold price. Attachment 2 displays the daily gold futures chart by Jim Wyckoff from Kitco.
First of all, the COMEX futures market was never intended to be utilized as a physical delivery platform. Over the years, only around 1% of the outstanding contracts at the end demanded physical delivery.
For 2015 to 2019 total deliveries were 208'616 COMEX gold contracts. That's an average of 41'723 per year and a grand total of 648.86 metric tonnes of gold.
However, that changed this year, especially since April 2020. As attachment 1 indicates:
April - 31,666 contracts
June - 55'102
August - 49'026
October - 34'894
A year-to-date total of 215'114 deliveries means that the COMEX have been forced to deliver more gold in the first 11 months of 2020 than they had in the entire 5-year period 2015-2019.
As of November 18, there are still 247'965 Dec20 contracts still open. Of course the vast majority of these will be closed and/or rolled forward. However, it can be assumed that another 50'000 contracts will ask for delivery. That would bring the year-end total near 265'000 contracts or a whopping 825 metric tonnes. That's more than the entire official gold holdings of Japan (765 t), the Netherlands (612 t) or India (557 t).
The question is: How long can they keep this up. Are we getting soon new rules? From Canada, we got already an answer. The product of Exchange Traded Receipt (ETR's) issued by the Canadian Mint, a government entity, where holders of ETR's could demand physical delivery from 10'000 ETR's on, got amended. Effective, November 2, 2020, the Mint will be permitted to provide ETR holders redeeming for physical gold bullion with substituted products in certain circumstances. They must see what is happening on the COMEX and they don't want to be in a situation where they are faced with an issue they cannot deal with it.
The First Notice Day on the COMEX December gold futures contracts is Monday, November 30. The Phantom of the Opera hit hard already on Monday, November 9, driving the gold price down around US$ 100 per ounce. They took the excuse the announcement that an experimental COVID-19 vaccine was successful. Are we getting a second wave on the downside?
Source: Craig Hemke, TF Metals Report
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