Gold is a calmer market but still seeing high demand
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.
The chart below shows the spread between the spot price of gold and the futures contract pricing. As you can see, it blew out in 2025 (increasing contango). This created the massive arbitrage that resulted in gold traveling from London to New York. When the spread between futures and spot gets distorted, it suggests there is dis-location in the market. Spreads have never fully normalized after what happened last year.
Figure 1: Spot vs Futures
As shown below, while gold delivery volume is elevated on a historical basis, it remains below the three big minor months to start the year (Jan, Mar, May). It is just barely below the July value, but given the price increase, the notional amount delivered is much higher.
Figure 2: Recent like-month delivery volume
Below is a chart that isolates the month of January going back 30 years. January last year was still a bigger overall delivery month ($6B vs $5.1B), but given that about half as many contracts have been delivered, it shows just how much the price has surged in the last year.
Figure 3: Notional Deliveries
Net new contracts (contracts that open and settle for immediate delivery) was a modest driver. Not as large as other months, but enough to be above the median.
Figure 4: Cumulative Net New Contracts
Perhaps the most important data point is the actual metal leaving Comex vaults. When metal is “delivered” it does not mean it’s leaving the Comex. It means that Registered ownership is moving from one party to another. When the metal leaves the vault, that is where things get interesting. As shown, this year saw a major influx as the arbitrage trade took hold, but that metal was flowing back out. In the latest month, a lot of Eligible was converted to Registered to satisfy delivery demand. The Comex is not (yet?) bringing in any new metal.
Figure 5: Inventory Data
Looking ahead to the February delivery period, we see a contract that is hovering near the upper end of the range when compared to other major months.
Figure 6: Open Interest Countdown
With the massive surge in inventory, the open interest relative to physical stocks is actually lower. This shows how much metal has been added to Comex vaults last year.
Figure 7: Open Interest Countdown Percent
Bottom line, January saw elevated deliveries on a historical level, but well below the 2025 highs. The Comex vaults saw little metal arrive or leave this month, it was mainly a conversion between Eligible and Registered.
While the gold market is showing a futures price that is getting higher above the spot rate (which caused metal to move from London to New York), the silver market is experiencing the opposite problem, backwardation. The spot price is above the futures price. This is actually a bigger warning sign because it highlights the pressure being put on the physical spot market.
Market Signal: Backwardation often signals a strong immediate demand or a supply shortage in the current spot market. The market is willing to pay a premium for the asset now, as the shortage is typically expected to resolve over the long term.
While the gap has closed in recent weeks, it is still there by a few pennies.
Figure 8: Spot vs Futures
While gold delivery volume has cooled some, the silver delivery volume remains elevated, breaking a new record this month.
Figure 9: Recent like-month delivery volume
Switching to notional values, and focusing on the month of January, produces the chart below. Again, some of this is price appreciation, but it is also an increased appetite for deliveries. In 30 years of delivery data, the notional amount is almost 10x higher than any previous January on record. The price appreciation is not denting the demand for physical.
Figure 10: Notional Deliveries
Unlike gold, net new contracts were a major driver this month, reaching the highest ever for this point in the delivery contract.
Figure 11: Cumulative Net New Contracts
Silver eligible inventories are being removed from the vault at a pretty rapid clip.
Figure 12: Inventory Data
Registered metal (metal available for delivery) is seeing major outflows. Since September, there has been a massive draw down in Registered supplies. This is further evidence of strain in the physical market. Investors are taking delivery and moving it out of the vault. This will be the chart to watch in 2026.
Figure 13: Inventory Data
As we approach February delivery, the silver contract came back down and now sits middle of the pack. It is possible that some of these contracts rolled forward to take delivery in January.
Figure 14: Open Interest Countdown
On a relative basis, open interest is still middle of the pack.
Figure 15: Open Interest Countdown Percent
The gold market has certainly calmed down when compared to the activity earlier in 2025. That said, demand remains strong despite the all-time highs in price.
Silver is showing significant demand and metal is leaving the vault at a rapid clip. This is a market in backwardation, facing high demand, record prices, and metal leaving the vault. This is a perfect storm for silver. The technical action would still benefit from a price pullback, but this data suggests any correction should be shallow.