Comex gold stock drops 73% in a day?

Registered gold stocks on the Comex have fallen by 73% in one day, according to the daily CME Group's stock overview. At Brink's, 21,200 troy ounces of gold were converted from registered to eligible, while Scotia Mocatta saw a similar shift with a much larger volume of more than 95,000 troy ounces of gold. This development is fuelling speculation in the blogosphere that there are major problems at the Comex and that traders who are short on gold may soon no longer be able to meet their delivery obligation...

Comex gold stocks have fallen by 73% in one day (Source: CME Group)

No more gold in the Comex?

The registered gold reserves in the vaults of the Comex have dropped from more than 200,000 to less than 74,000 troy ounces in one day, but if you look closely, you will see that the total gold reserves have actually increased to 6,416,788 troy ounces. The gold is already in the safe and can be stored in the accounts of the Bullion Bank can be easily transferred. Hollandgold will have a lot to say about that in September written. An excerpt from that article...

"The fact that the gold supply in the Comex is depleting is a misrepresentation, because the total supply (Registered + Eligible) has been showing an upward trend since 2001. Apart from the year 2013 - when a lot of gold was withdrawn from the vaults of the bullion banks - there is again an upward trend in the total gold supply of the Comex. There is therefore no question of an exodus in the Comex. Zero Hedge only shows a part of the stock, which could lead to a different (erroneous) conclusion. For those interested: the stocks of silver in the Comex have also increased further in recent years.

If we compare the number of claims on gold with the total gold reserves of the Comex (Registered + Eligible) and place these figures in historical perspective, we suddenly see a completely different picture. We now see that the number of claims on a troy ounce reached a peak in 1998 and that in recent years there has actually been no increase in the number of claims on gold in relation to the gold reserves."

Don't panic 

Several blogs that write about gold suggest that there is an imminent shortage of gold on the Comex and that there will soon come a time when traders will no longer be able to meet their delivery obligations. This is of course possible in theory, but we must not forget that paper is almost exclusively traded on this futures market. Both the buyer and the seller speculate on the price of gold or try to hedge a position in physical bullion. Only a fraction of all contracts are actually delivered physically, most futures contracts are rolled over or settled in cash. From our analysis From September:

"For years there has been speculation about a run on the gold of the Comex, but the question is whether that will actually ever happen. Only 2 to 4 percent of contracts require physical delivery. Most contracts are rolled over or settled in cash. And if there comes a time when there really isn't enough gold in the Comex, we won't be surprised that all contracts are settled in cash."

Major shifts in the Comex's gold holdings are not new...