People are waking up
This article first appeared on SchiffGold.
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.
September is a minor delivery month for gold. The total metal delivered was the highest since March of 2024 and shows a positive trend moving up.
Figure 1: Recent like-month delivery volume
The high delivery volume occurred despite almost zero net-new contracts. This is when contracts open mid-month for immediate delivery. As shown below, the latest month is the lowest going back to 2022.
Figure 2: Cumulative Net New Contracts
Gold inventory levels remain very low. The Comex has been unable to rebuild their inventory which could be creating the upward pressure on gold recently. With little physical stock available combined with more investors wanting physical metal, there is clearly a supply/demand mismatch.
Figure 3: Inventory Data
October is a strange month for gold. It is neither a major month (where open interest reaches +400k contracts) nor a minor month (where open interest is typically around 5k-10k at peak). This October has been more than double the Open Interest amount from last October (see red and purple line). This means that as we approach the delivery window, Open Interest is at 36.9k with three days to go. To compare to last year, with 3 days to go, Open Interest was at 18k. This could be a sign of a very large delivery month (for October) which would continue to support and even push up the gold price. Despite the big run in gold, if physical supply cannot keep up with demand, then prices will continue moving higher.
Figure 4: Open Interest Countdown
On a relative basis (relative to available supply), open interest is even larger: 49.2% for this October vs 17.3% for the same time last year. Again, physical supply is simply not there to keep up with demand.
Figure 5: Open Interest Countdown Percent
Silver is showing some signs of life but is still taking a back seat to gold right now. The last four major months have all been pretty solid from a delivery volume perspective.
Figure 6: Recent like-month delivery volume
Simialr to gold, this is happening despite net new contracts sitting below trend.
Figure 7: Cumulative Net New Contracts
Registered and Eligible have been plotted separately to make the charts more readable. Eligible took another dive in August and has not yet been replenished.
Figure 8: Inventory Data
The dive in Eligible was a move into Registered where the metal has started to trickle out. Keep in mind it is not moving back into Eligible, it is simple moving out of the vault. This indicates more people taking phsyical posession of the metal they own.
Figure 9: Inventory Data
As we approach the delivery period for October, you can see that the open interest remains elevated with only a few days left to go.
Figure 10: Open Interest Countdown
On a relative basis, open interest is lower than the past months, but this is primarily because the amount of Registered has increased recently.
Figure 11: Open Interest Countdown Percent
The story is still gold. Going into October, demand continues to remain high against low inventory levels. This is why gold has breached $2500 and then $2600 for the first time ever. Golds consolidation has ended as forecasted last month. There is little technical resistance in the way and a supportive Fed will drive prices higher. It’s now silvers time to shine as it catches up with the yellow metal.