COMEX IS BEING FORCED TO DELIVER GOLD: A CRISIS UNFOLDING

 

The comex has traditionally been a futures/credit market where contracts are settled before the delivery date, and large players like JP Morgan, financed by the Fed, could manipulate the gold and silver price simply by dropping huge quantities of contracts (especially shorts) that forced smaller players to cover their positions.  Then all the contracts would settle before delivery.

But since 2021 large players (unspecified) but many seeming to be from well financed Asian positions, have been taking delivery of the comex contracts.

Since 2021 these "Stand for Delivery" positions have steadily increased, and so far a total of over 2,100 TONNES of gold have been delivered.

But, since the beginning of this year there has been a considerable acceleration in the rate of stand for delivery contracts of gold, that has put a strain on the comex, and they have had to arrange for transatlantic flights from the London Bullion market to fulfill their delivery obligations.

This is true in both Silver and Gold.

These deliveries are supposed to be fulfilled in days.  Some contracts are not being delivered.  And there is a tremendous backlog of delivery contracts.

If the accerleration continues at this rate over 2,200 tonnes of gold will have to be delivered this year.  This is the total of the last three years.  The strain on the comex is at a point where a systemic crisis is in the making.  

If they cannot get the gold for delivery and contracts back up for months and months - which is happening now - the price of gold will skyrocket as sellers of physical will simply hold out for higher prices.

This delivery crisis is unfolding right now.

This doesn't mean the crisis won't be delayed as gold exchanges coordinate to resolve immediate delivery issues.

But the problem is being exacerbated by the fact that major Central Banks (China, Russia etc) and large oil backed sovereign wealth funds are buying most of the fresh supply of gold so that the western exchanges are having a difficult time of finding fresh supply.

And over  time, as more as more Stand for Delivery contracts are exercised, the potential for a delivery crisis accelerates.