What is driving the surge in inventory?
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.
December saw massive delivery volume in gold with 25,642 contracts delivered, which was the second highest delivery volume since August 2022.
Figure 1: Recent like-month delivery volume
Net new contracts surged during the month making up almost 1/3 of the entire delivery. This was the highest net new delivery volume since at least 2022.
Figure 2: Cumulative Net New Contracts
One surprising twist for December was a surge in inventory levels in both Eligible and Registered. On the surface, it appears that this was created to meet the surge in demand. If this is the case, it means that physical supplies at the Comex have become very constrained. Coming into the month, inventory levels showed almost 18M ounces, but if this was all available why would there have been a surge to bring in more inventory to meet the increased supply?
Figure 3: Inventory Data
January is seeing elevated interest as well. It shows the second highest open interest into the close since 2022. January is typically a quiet month so this is a development to keep an eye on.
Figure 4: Open Interest Countdown
Despite the surge in inventory, on a relative basis, the open interest is still very elevated for a minor month.
Figure 5: Open Interest Countdown Percent
Silver delivery volume in December was the highest since March 2022, almost three years ago. As the chart below shows, it was significantly higher than any recent month.
Figure 6: Recent like-month delivery volume
We did not see a surge in net new contracts like we saw in gold, but it was a little higher.
Figure 7: Cumulative Net New Contracts
Registered and Eligible have been plotted separately to make the charts more readable. Eligible has seen an increase since December started.
Figure 8: Inventory Data
Registered has seen a little bit of movement but not meaningfully so.
Figure 9: Inventory Data
As we approach the delivery period for January, silver is showing as well above trend.
Figure 10: Open Interest Countdown
On a relative basis, open interest is high but not as high because of the recent surges in inventory levels.
Figure 11: Open Interest Countdown Percent
December saw a lot of delivery volume. This has likely helped keep a floor under prices as volatility has picked up in the wake of the Trump election. The most interesting data point from this last month was the surge in gold inventory to meet elevated demand. If this inventory increase was done to satisfy the delivery demand, it could be a sign that we are seeing initial cracks in the Comex. If demand stays elevated in 2025, will Comex be able to continue meeting it?