Andrew Maguire predicts a raid on deliverable physical gold in the COMEX.
‘Talking Gold’ – a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets – a regular feature from the Kinesis Youtube show ‘Live from the Vault’.
In this week’s breakdown of the gold and silver markets, Andrew Maguire explains how paper market footprints leading into options expiry, signal an imminent raid on deliverable physical COMEX gold and silver.
Familiar paper market conditions
According to Andrew Maguire, the paper markets are evidencing footprints very similar to those observed leading up to the COMEX’s unravelling on March 23rd.
Andrew Maguire reports similar tonnage size spot index buying across both the Gold and Silver Futures markets. The precious metals expert reports buying coming in from a $400 and $10 higher step in GC and SI, respectively. Buying that echoes the trends witnessed in March, before huge, undeliverable physical demand broke the EFP conduit.
Considering the expiring October contract is backwardated by up to $6, the Gold Futures price is cheaper than the 10 times larger delivery market in London. Andrew Maguire shares word of wholesalers locking in the spot index demand for physical delivery.
Watch Andrew Maguire explore the impact of non-farm payroll’s release on the paper markets in last week’s Talking Gold from fortnightly Kinesis show ‘Live from the Vault’.
Footprints of physical delivery demand
Andrew Maguire has received reliable information that two very large first-tier trading banks are targeting COMEX bars for delivery.
As further evidence, Andrew Maguire points to the unusual levels of open interest and spot index buying in October. The upcoming October options expiry has double the typical open interest with 60,000 contracts, up from the average 30,000.
Additionally, Andrew Maguire cites an additional 100 tonnes of positions held by COMEX paper longs in the October contract. With specs who would normally close their positions into a gamed price rinse, choosing instead to stand for delivery.
COMEX delivery tested
With no tonnage size for physical gold available in the global wholesale market, Andrew Maguire believes wholesalers are calling the COMEX on their claim that they have bullion to deliver.
Andrew Maguire’s parting thought
Despite what you see in the short term charts, this is a very, very bullish setup.
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Next Episode: Andrew Maguire carries out another detailed round-up of the gold and silver markets.
The opinions expressed in this publication are those of Andrew Maguire and do not purport to reflect the official policy or position of Kinesis.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.