Comex, the New York-based primary market for trading precious metals, has registered a sharp drop in gold. Its gold inventories shrank a whopping 73% in just one day. At present, there are only 74,000 troy ounces of gold available for immediate shipment. Comex has never experienced such a stunning decline in its depository vaults. So, Comex gold inventories have logged the lowest level for over 20 years.
Recently, the precious metal has been losing in value, thus it aroused soaring demand among large speculators. Interestingly, gold inventories showed an eightfold contraction from August 2015. Moreover, gold stocks plummeted 14 times as compared to autumn 2015. If the tendency persists, gold is likely to be depleted in the near future. At present, 40 million troy ounces of gold are to be shipped under valid futures contracts. So, Comex could really face depleted inventories. Indeed, in late January 99.81% of New-York traded gold futures were not physically secured by the precious metal. In particular, only 1 of 542 futures contracts could have been settled by an immediate delivery. From 2000 until 2003, about 25 paper ounces were backed by 1 physical troy ounce of gold. However, in early 2013 all indicators suggest there has been a rapid outflow in registered gold.
At a time of economic and political turbulence, gold always wins favor as a safe haven asset.
