Frantic COMEX Operations Continue

COMEX Futures VS Spot Gold and Silver Prices

Whether it's the threat of looming tariffs, a shortage of metal due to over-leverage, a repatriation before revaluation, or something else, what's undeniable is the surge of activity in and around the COMEX, its vaults, and its monthly delivery schedule ever since Trump won the U.S. presidential election late last year.
We've been writing, speculating, and opining upon the reasons for the unusual price and physical activity in gold (and silver) for several weeks now. For today, though, let's dispense with the "why" and instead focus upon the "what", the "where", and the "how".
The first thing you should be watching is the spread between the spot price (London) and the front month futures price (New York). Normally, this spread is less than $10 in gold and 20¢ in silver. However, beginning in December, the spread in each has blown out to extreme levels. These spreads ebb and flow over time, but the key is that they are persistent—all the way up to present—and suggest a lack of confidence in executing the level of arbitrage necessary to close the price difference. As of Monday, March 31, this spread was $34.

Delivery Demand Surges in COMEX Gold Contracts

Next, let's check the level of "delivery demand" on COMEX. The calendar for COMEX gold includes the front/delivery months of February, April, June, August, October, and December. The other six months of the year are considered off or non-delivery months. However, regardless of what month the calendar shows, delivery demand on COMEX is breaking records.
The "delivery month" of December 2024 saw a slightly higher-than-normal/average amount of activity with a total of 25,856 Dec24 contracts being "delivered". At 100 ounces/contract, that's 2,585,600 ounces or about 80 metric tonnes of gold.
Any other year, the pace would slow in the non-delivery month of January, and that's what appeared would happen this year as just 3,258 COMEX gold contracts remained open when the Jan25 went off the board on December 30. But that was the end of "normal". Over the course of the month, 19,280 additional Jan25 contracts appeared in the queue and total "deliveries" surged to 22,538 by month end. That's another 70 metric tonnes and nearly as much as December. This was unprecedented, and the anomalies had just begun!
Next came the delivery month of February, and a record 59,296 Feb25 gold contracts remained open and "standing for delivery" when that front month contract went off the board on January 30. Even if no other contracts were added in the weeks that followed, the COMEX was set for a very busy month. However, just like January, a rush of delivery demand arrived during the month, and total deliveries for February reached a new all-time high of 76,567 contracts. Doing the math, that's 7,656,700 ounces or about 238 metric tonnes! WOW!
The month of March in COMEX gold is another non-delivery month, yet, like January, 10,210 Mar25 contracts remained open when the contract went off the board on February 27. And, like January, another 9,188 queued up during the month and total deliveries finished at 19,398. That's 60 metric tonnes more!
So, if you're following along, December through March—just those four months—saw 144,359 COMEX gold contracts "physically delivered". That's nearly 450 metric tonnes and a total that, if it were held by just one country, would make it the 12th-largest sovereign total in the world!

2024 COMEX Gold Deliveries Outpace Entire 2023

Oh, and for additional context, the entire calendar year of 2023 only saw 132,427 deliveries. Again, that’s total—for the full year of 2023—and we've now seen a larger total in just the past four months! Do you understand now why it's safe to say that the current delivery demand is unusual and unprecedented?
It's continuing, too! Last Friday, March 28, saw the delivery month Apr25 go off the board and into its "delivery" phase, and just like late January and the Feb25, a whopping total of 55,878 Apr25s remained open and standing. As such, the COMEX may be on track to deliver another 70,000+ contracts over the course of the next four weeks!

Massive Silver Movement Through COMEX Vaults

But here's the thing: All of this extreme activity is not limited to just gold. It's impacting COMEX silver too. Like gold, the silver "delivery months" of December and March saw an unusually high number of "deliveries", but the off months of January and February were active too. As you can see below, the four-month total was 32,473 contracts. At 5,000 ounces/contract, that's 162,365,000 ounces or about 5,050 metric tonnes of silver!

Like gold, this pace of silver deliveries is unprecedented. The entire calendar year of 2023 only saw a total of 23,414 COMEX silver deliveries. Again, compare this to just the past four months of 32,473 deliveries and you get a feel for just how frenetic the pace has been lately.
And the mass movement of metal has been breathtaking. Over just the fourteen business day period of March 10-27, the CME Group reported 48,786,380 ounces of silver received and posted to the COMEX silver vaults. Over those same 14 days, the CME posted that only 6,644,453 ounces of silver had been withdrawn from the COMEX vaults for a NET change of +42,141,927 ounces. Again, in just the past 14 days! This sure sounds to me like the bullion banks that manage the vaults aren't expecting the pace of "deliveries" to ease anytime soon!
Tie all of this back in to where we began this post and you can make a connection as to why the spread of futures spot persists and widens.

Gold and Silver Prices Climb with Physical Delivery Trends

And it would seem that the impact on price has been significant. When the widening spreads first appeared back in early December, the spot gold price was around $2630. As of March 28, that same ounce of spot gold had risen to $3085. A cool 17.3%. Similarly, spot silver has risen from about $31 in early December to more than $34 last Friday. Not too shabby.

Gold Price - Candlestick Chart

Silver Price - Candlestick Chart

Going forward, we'll be sure to keep an eye on all of this, of course, and we'll keep you updated as things change. But for now, understand that the set of circumstances that began impacting the COMEX late last year has continued unabated and the impact that all of this is having on price seems poised to continue as well.

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