This evaluation focuses on gold and silver bodily supply on the Comex. See the article What’s the Comex for extra element.
Each gold and silver are seeing quieter exercise in Comex contracts. This isn’t atypical for October and November that are gradual months within the lead as much as December.
Silver: Latest Supply Month
Silver is wrapping up a minor month and in addition heading right into a minor month. October has seen the least supply quantity since earlier than the Reddit squeeze in February with this month simply above 2,000 however beneath the October supply of two,185.
Determine: 1 Latest like-month supply quantity
This decrease exercise persists regardless of the robust drainage seen within the Comex vaults during the last month. Maybe this explains the mid-month exercise displaying a whole lot of power.
When the supply month begins after first discover, usually the variety of contracts open is a superb indicator of the variety of contracts to be delivered. Some buyers select to buy and stand for instant supply within the present month. That is normally an indication of robust instant bodily demand.
This month noticed 454 contracts open mid-month for October to face for instant supply (pink bars). Whereas this pales compared to the main months, it’s a giant quantity for mid-month exercise. The second chart beneath zooms on the pink bars and exhibits how October compares to latest months. As proven, that is the strongest since June.
It’s laborious to know what’s driving the robust mid-month exercise, however as talked about above, it might be tied to the Comex vaults dropping virtually 1% of their stock in a single month.
One other promising signal is the historic view. Trying on the month of October over 10 years exhibits that this month is the second largest on report from a greenback (notional) perspective. Final 12 months set data in virtually each month, however $232M in whole deliveries this month is fairly robust, particularly contemplating the value of silver is decrease than the place it was final 12 months.
Determine: 4 Notional Deliveries
Silver: Subsequent Supply Month
The November contract is a couple of week away from First Discover. Whereas the preliminary have a look at the chart beneath could appear detrimental (pink line beneath latest months), the contracts excellent is sort of double the quantity seen on the similar time final November (inexperienced line).
November is traditionally a really small month as a result of December is a significant contract in each gold and silver. The mid-month power seen in October mixed with the comparatively excessive contracts excellent in November is a promising signal heading into the top of the 12 months.
On the floor, issues could appear calm, however the hints of robust bodily demand may result in an thrilling December! Is gold displaying related exercise?
Determine: 5 Open Curiosity Countdown
Gold: Latest Supply Month
The charts beneath comply with the identical order because the silver charts above.
October gold is a difficult month to research as a result of it’s neither minor nor main. It’s distinctive as a result of contracts excellent usually get greater than 50k. That is nicely above the 1k-4k for minor months however nicely beneath the 400k seen in main months.
Final October gold noticed almost 35k contracts stand for ship, which was 48% of the height open curiosity seen for the month (orange dot beneath). For the opposite main months, the quantity is round 10%. This previous October has seen 17,662 contracts stand for supply which is 37% of peak open curiosity. Regardless that the quantity appears to be like weak in comparison with the opposite main months, it might be argued it is a robust displaying because of the uniqueness of October.
Determine: 6 Latest like-month supply quantity
The mid-month exercise has proven power, albeit lower than the final two months. August (7.1k) was exceptionally robust adopted by an honest September (2.6k). This compares to Might-June which didn’t see greater than 1350 contracts in any month. October has seen a wholesome 1,822 contracts open mid-month. That is truly on par with Aug and Sept final 12 months, however beneath October 2020 which noticed 4,370.
It’s laborious to make a definitive conclusion, however the mid-month bodily demand has been there the final three months for positive.
Determine: 7 24 month supply and first discover
Placing October into historic context exhibits the same development to silver. Under final 12 months, however nicely above previous years. Earlier than final 12 months, the final time greater than $3.1B was delivered in October was again in 2009.
Determine: 8 Notional Deliveries
Gold: Subsequent Supply Month
November gold is a little more conclusive, displaying weaker demand. As talked about within the silver evaluation, November is an odd month, however this November is even sitting nicely beneath final November (orange line). Studying into this an excessive amount of could be a mistake. The distinction is about 1,000 contracts from this 12 months to final 12 months on the similar time. As proven in Determine 7 above, 1,000 contracts will not be materially vital for many main months.
Determine: 9 Open Curiosity Countdown
October and November are difficult months on the Comex, each being minor months with December looming. One other quirk is that silver received’t see a significant month till March. Gold could have a significant month in February, however that shouldn’t take away the significance of December. The bodily demand for each metals has picked up for the reason that lull over the summer time. December may present whether or not the robust demand for bodily is sustaining or waning.
The inflation in 2021 has been excessive however will seemingly get a lot greater in 2022. Main corporations have been saying value hikes for months. The CPI continues to be sitting above 5% and doesn’t even precisely measure the true value of residing.
Bodily demand in 2021 was excessive from a historic perspective however beneath the data seen in 2020 (with out but counting December). Regardless that value and bodily demand misplaced momentum by Q3 2021, it’s laborious to imagine the demand received’t come again in a rush if inflation doesn’t cool and the Fed is gradual to behave.
Determine: 10 Annual Deliveries
Knowledge Supply: https://www.cmegroup.com/
Knowledge Up to date: Nightly round 11 PM Jap
Final Up to date: Oct 21, 2021
Gold and Silver interactive charts and graphs may be discovered on the Exploring Finance dashboard: https://exploringfinance.shinyapps.io/goldsilver/
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