Stunning Development In Comex June Gold Deliveries

If the Comex were allowed to issue paper contracts representing no more that 10 or 20% of the actual amount of gold held by Comex vaults, what would the price of gold be?

1.176 million ounces of gold have been delivered – or should I say “delivered” – for the June contract six days into the June contract delivery period.  I don’t follow the delivery patterns as closely as I used to, but this is a massive amount of stated deliveries.  Even more interesting is the fact that there’s still 6,683 Juno contracts open representing 668,300 ozs of potential deliveries.   This is a relatively high number of contracts still open this far into the delivery period.

One other interesting point of note is that over the last few months, a couple new “players,”  beyond the standard Comex bullion banks (JP Morgan, HSBC, Scotia) have been participating in the deliveries:  B of A (Merrill), International FCStone Financial, Morgan Stanley and SocGen.   All four of these have been taking an increasing amount of deliveries the past couple of months, primarily on behalf of customers (vs. for their own house account).

I have no idea what would be triggering this sudden increase in delivery activity on the Comex – other than the obvious.   And who knows to what extent the physical gold is actually being moved from the accounts of the delivering parties to segregated accounts of the parties taking delivery.   It would be even more interesting if a lot of this gold was being removed from the Comex, which would reinforce the likelihood that it really exists in unencumbered physical form.

On another note, the stock portfolio portion of the fund I co-manage was up 4.7% today vs. the HUI up .23% and the GDXJ “junior” ETF up 1.7%.  We own highly concentrated positions in true junior exploration stocks.  My point here is that a lot of money is flowing into the highest risk/return segment of the mining stock sector.  In my opinion this is a signal that the “smart” money is expecting a big move in the entire sector.

I publish the Mining Stock Journal, which is a bi-monthly subscription report which features a junior mining stock in every issue.  I try to find lessor known ideas because I want to put my money in good ideas before the wider universe of newsletters begin to discover them.   The next issue out this Thursday will be featuring a very small silver exploration company that appears to have found what could be very large silver (polymetallic) deposit.   You can access the Mining Stock Journal here:   MSJ Subscription Link.   I am sending all-back issues to new subscribers.

Considering the research and content, both the Mining Stock Journal and Short Seller’s  Journal are remarkable bargains.  – from subscriber “Jay”


7 thoughts on “Stunning Development In Comex June Gold Deliveries

  1. Gold is not going anywhere until Mark Dice starts telling people
    that gold and silver are redeemable for Hershey candy bars.
    That’s when you better get out of the way or be trampled by a
    Wal-Mart herd of shoppers at 4am looking for cheap Chinese crap
    at holiday time.

  2. I’m invested in only a few stocks but they are one’s Dave clued me into… my portfolio up a similar percentage as well both yesterday and today (a bit less but still showing relative strength)

  3. Dave, Mike Maloney put out a “The Truth About Silver & Gold Mining Stocks” video and he’s being a complete pussy about this current bull rally, saying it’s likely exhausted itself, without any possibility there could be more legs up, despite displaying charts that clearly demonstrate otherwise…

    1. It’s why I limit my information/commentary consumption to a few providers – he’s not one of them. At end of the day,
      you have to form your own convictions looking at the available data. Anything that’s not actual datapoints is a
      derivative of the data.

  4. does anyone actually knows how much gold does USA has not in trading options. Iin their vaults. ( physical gold stored for a rainy day that is coming.
    could you guys please advise. I have heard that it is either zero, or some amount or a large amount. It is a bit scary that if the market falls down, what r they going to use for money> SDR`s. But what about the public? What r they going to use for money ?

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