Comex Inventory Aug

SchiffGold Gold Silver Comex Stock

Gold slowly drains but Silver surges

Exploring Finance

This article first appeared on SchiffGold.

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 data at the Comex. This is different than the delivery countdown that looks to see how many contracts will stand for delivery each month. Instead it shows 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

After a massive surge last year, Gold has seen a slow and steady fall in inventory over the last 6 months, with June being the lone exception.

Figure 1: Recent Monthly Stock Change

Silver inventory drained for five months starting with the February silver squeeze, but Comex vaults have partially restocked the last 6 weeks by almost 10m ounces, mostly in Eligible.

Figure 2: Recent Monthly Stock Change

Looking at the summary table below shows the activity over three different periods. Over the past year, Gold has lost Eligible where Silver has lost inventory in Registered.



The next table shows the activity by bank/Holder. It shows where the large supply came from in 2020 (see charts below) and also where the drainage has been coming from over the last 1 and 12 months.



Historical Perspective

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 3: 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 before a recent uptick. It will be interesting to see if this increase in inventory continues in the weeks ahead.

Figure 4: Historical Eligible and Registered

Another data point often referenced is the amount of volume that occurs relative to available inventory. On high volume days, people may notice that more paper ounces exchanged hands than are physically produced in an entire year by mining companies. While this may be true, that is also the nature of the Comex paper futures market, which are designed to offer liquidity to individuals. These final charts compares both total stock and Registered with the amount of Open Interest over time. A high ratio indicates there is less metal in the Comex system relative to the amount of Open Interest.

As can be seen, this ratio has fallen in both Gold and Silver over the last year as Open Interest collapsed in March 2020.

After reaching a high above 800k contracts, Gold has fallen back below 550k contracts, despite record delivery volume. In parallel, the massive increase in Registered as noted above has driven down the ratio of open interest to available Gold. Currently there are about 2.5 paper ounces outstanding per Registered ounce, and 1.35 per total ounces. This is down from well over 12 and around 8.7 pre inventory increase.

Figure 5: Open Interest/Stock Ratio

After reaching a high above 240k contracts, Silver has not held above 180k contracts since, despite record delivery volume. In parallel, the increase in stock noted above also worked to drive down the ratio of open interest to available Silver. That being said, there are still 7.4 paper ounces for each ounce of registered metal. At the total level the ratio is 2.2. Pre Covid, these levels stood at 15 and 3.5.

Figure 6: 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. In a true crisis, it’s very possible the vaults at the Comex could be drained rather quickly.

Data Source:

Data Updated: Nightly around 11PM Eastern

Last Updated: Aug 18, 2021

Gold and Silver interactive charts and graphs can always be found on the Exploring Finance dashboard: