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This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
Registered = Ready for Delivery, Eligible = Warrant assigned but can be made available for delivery
Table des matières
Since the start of October, 800k ounces of gold have left Comex vaults. The Comex has increased gold holdings in only 1 of the last 9 months.
Figure: 1 Recent Monthly Stock Change
The chart below shows the daily activity since the last report. As shown, the last three days made up for a decent drawdown in Registered.
Figure: 2 Recent Monthly Stock Change
Silver saw stocks replenish by about 10m ounces in July and August after the early 2021 silver squeeze drained 45m ounces from vaults in a span of 5 months. Since silver was restocked, almost 8.5m ounces have been removed from Comex vaults. So far, November has seen some slight increases in stock, but this is before the December contract prepares for delivery. The December Comex contract countdown analysis will be released next week on Wednesday. Stay tuned as the data is looking promising! See the gold and silver dashboard for a preview.
Figure: 3 Recent Monthly Stock Change
Silver Eligible recovered by 1m ounces in the last day alone. Without the recovery, Stocks would have been down by 5m ounces since the last report.
Figure: 4 Recent Monthly Stock Change
The table below summarizes the movement activity over several time periods.
- In the last month, Comex lost 544k ounces which is 1.6% of the total stock. This follows 334k drained in the previous period.
- This is after 100k ounces have come back into vaults over the last week (shown in Figure 2 above)
- Silver saw a similar depletion in stock of 1.1% or 4m ounces. This follows 3.9m leaving in the period prior. Both Eligible and Registered saw stocks fall.
- Similar to gold, this includes the restocking of 570k ounces in the last week.
Both metal aggregate holdings are down around 10% in the last year. In silver, the drainage has come mainly from Registered (available for a warrant) which has lost 35% of total inventory. In gold, the opposite story exists with investors who already had the gold with a warrant assigned taking delivery. 22% of Eligible stocks have been depleted in the last year.
Figure: 5 Stock Change Summary
The next table shows the activity by bank/Holder. It details the numbers above to see the movement specific to vaults.
- Over the last month, only Manfra added supply with 4 other vaults seeing stock leave. Malca specifically had 150k ounces leave which represented 8% of total holdings.
- In the last year, every vault but one (Manfra) has seen a significant fall in holdings.
- Over the last month, 6 vaults saw a fall in total with only 1 vault increasing supply. The decline was more widespread compared to previous months, with Brinks, CNT, HSBC, and JP Morgan all-seeing fairly large drops.
- CNT and HSBC lost 6% and 2.8% of total inventory
- In the last week, only Brinks saw stocks deplete, with 4 other banks adding to inventory.
Figure: 6 Stock Change Detail
Zooming out and looking at the inventory for gold and silver since 2016 shows the impact that Covid had on the Comex vaults. Gold had almost nothing in the Registered category before JP Morgan and Brinks added their London inventory with nearly 20m ounces. Prior to Covid, this meant that almost no gold was available to move from Registered into Eligible. That changed quickly but since the start of 2021 available inventory has been declining. It remains well above pre-Covid levels though.
Figure: 7 Historical Eligible and Registered
Silver also saw an increase in Registered around March 2020, but this has been draining much more steadily back to Pre-Covid levels. Interestingly the ratio of Registered to Eligible is the lowest it has been since Covid started and even sits below 2019 levels. Registered currently makes up only 27% of total stock.
Figure: 8 Historical Eligible and Registered
Available supply for potential demand
Many critics point to the massive open interest compared to available inventory at the Comex. As can be seen in the chart below, the ratio of open interest to available stock has fallen from over 8 to 3.5. This ratio has recently spiked as open interest in gold has increased dramatically from 507k to 612k since gold broke through $1800. This increase in open interest occurred in tandem with falling inventory which further amplified the ratio spike.
Open Interest is the highest it has been since July 2020 when the ratio was at 4.4 (meaning 4.4 contracts per ounce of gold at Comex).
Figure: 9 Open Interest/Stock Ratio
Coverage in silver is weaker than in gold with 7.95 open interest contracts to each available physical supply of Registered. This was as low as 6.75 in July, so has been creeping up in recent weeks and spiked up recently as open interest jumped against falling inventory.
Figure: 10 Open Interest/Stock Ratio
What it Means for Gold and Silver
While the monthly delivery of contracts certainly represents physical demand. Tracking the activity in the Comex vaults shows the actual movement of metal. Open interest can increase much faster than physical metal can show up in Comex vaults. If a true “precious metal run” occurred, the Comex would be hard-pressed to meet all physical demand.
Data Source: https://www.cmegroup.com/
Data Updated: Daily around 3 PM Eastern
Last Updated: Nov 17, 2021
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