by Peter Schiff, Schiff Gold:
December gold is having the weakest major delivery month since February. This is surprising given the recent strength in gold and considering that last December saw quite a large number of contracts deliver (36k). I commented on this a few weeks ago, suggesting that the lower volume was a result of thinner supplies. I think the silver shortage is well underway and it is just starting in gold. This is why gold is showing signs that silver showed 6-12 months ago.
TRUTH LIVES on at https://sgtreport.tv/
Figure: 1 Recent like-month delivery volume
That said, net new contracts did show some strength late in the month. After seeing a ton of contracts cash settle on the first day of delivery (1,373 – a recent record), the contract turned and saw a decent number of contracts open mid-month for immediate delivery.
Figure: 2 Cumulative Net New Contracts
The bank house accounts have seen activity pick up. BofA replenished its outflow from November and then some (1,762 out in Nov vs 3,689 in for Dec). This came at the expense of the other house accounts though, which collectively saw the biggest net reduction (7,544) since February of this year and the second biggest net reduction ever.
Figure: 3 House Account Activity
As shown in the recent stock report, the continued plummeting of supplies had finally seen some slowdown. However, Registered has already started to see that metal flow back out.
I will reiterate that this activity makes Registered look like it is getting closer to finding the bottom of its supply.
Figure: 4 Recent Monthly Stock Change
Gold: Next Delivery Month
Jumping ahead to January actually shows gold again looking a bit quiet. Only slightly more than 1k contracts are open headed into the delivery period. This is well below recent months.
Figure: 5 Open Interest Countdown
Even when looking as a percentage of Registered, January is still on the lower end of the spectrum. This comes shortly after November showed record strength headed into close (the line below that surges at the end).
Figure: 6 Countdown Percent
Minor months have been showing a strengthening trend of delivery volume with some volatility along the way. January looks set to buck that trend for now.
