Last week we wrote (dutch) that there is no shortage of gold in the Comex. We refuted the persistent rumor pushed forward by many gold blogs that the Comex would default soon, because they barely have any gold left for physical delivery. We got further confirmation on this by the CPM Group, a well known consultancy firm with expertise in the commodities and precious metals markets.
In a short two-page report they show how total gold stocks in the Comex (Registered + Eligible) are still relatively high, in comparison to the last three decades of gold trading at the Comex. When measuring the total gold stocks against the open interest, one would also find that there is no reason to be worried about physical gold deliveries at the moment. Only a small percentage of all gold contracts is settled in metal, which is of no surprise given the fact that both sides of the gold trading at the Comex are often leveraged. Most buyers only want price exposure to the metal and have the slightest interest in getting gold bars out of the bullion bank vaults.
In their market commentary of this week, the CPM Group reminds us that the story about the Comex gold inventory isn’t exactly new. In August 2013, there was also a lot of speculation about a possible default at the Comex in the gold blogosphere. Back then, the CPM Group also issued a report to refute these rumors.
The fact that the CPM Group again debunks the rumors about the Comex doesn’t mean they have a negative stance towards holding gold. In fact, they are very positive about buying gold as a long term investment at current prices. But in the short run, the CPM Group doesn’t expect any substantial rise in the price of gold.
In their latest market commentary, the CPM Group is very critical about all the false rumors being spread to promote gold. This is what they said (emphasis is ours):
“With gold and other precious metals prices having fallen in recent months and remaining weak, a few gold marketing groups have become more desperate about convincing investors to keep buying gold, resorting to misleading market commentary suggesting that gold prices are about to ‘explode’ sharply higher due to fundamental tightness. This is only one of the false stories being used to try to bull the market higher.”
According to the CPM Group, the Comex is still not running out of gold (Source: CPM Group)