by Peter Schiff, Schiff Gold:
The Comex report for last month correctly identified a potential big move in silver while the same report two months ago preceded a massive up move for the price of gold. The data this month is not as obvious or compelling, but it is clear the stress on the Comex continues to build.
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.).
TRUTH LIVES on at https://sgtreport.tv/
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.
Gold
August is a major delivery month for gold. While total delivery volume did not exceed the June total, it is still the second highest in over a year.
Figure: 1 Recent like-month delivery volume
A trend has developed recently where there is less net-new contract creation mid-month for immediate delivery. That is a word salad, so let’s explain: for the past three years, once the delivery contract opened, you would typically see a lot of investors opening contracts for immediate delivery. That trend has fallen off, but delivery volume remains elevated because more people are going into the month knowing they will take delivery.
Figure: 2 Cumulative Net New Contracts
As delivery volume has increased, the Comex has also seen more metal actually leave their vault. “Delivery” means the physical ownership of a bar transfers from one owner to another; it does not leave the vault until that owner takes it out. That is what the chart below is showing. People are taking their metal out of the vault!
Figure: 3 Inventory Data
The biggest chart this month is the September contract. Take a look below and see if you can identify the line that looks different. As mentioned above, people are coming into the contract ready to take delivery rather than opening mid-month. You can bet that almost all of those 5,559 contracts are going to take delivery in September. Even though it is a minor month, we could see a very healthy September delivery compared to previous months.
Figure: 4 Open Interest Countdown
On a relative basis (relative to available supply), open interest is more than double the average!
Figure: 5 Open Interest Countdown Percent
Silver
Silver is taking a back seat to gold right now, but it’s likely the trend will spill over into silver and we could see prices really take off. As shown below, delivery volume is below trend.
