Comex Delivery Update

by Craig Hemke
Sprott Money

The demand for physical delivery off of the COMEX futures exchange continues at an unprecedented rate. What does this mean for 2021 and beyond?

As most precious metals investors know, physical “delivery” from the COMEX futures exchange has always been a sort of illusion designed to maintain some semblance of legitimacy for the pricing scheme utilized there. If no metal is ever delivered at the price discovered through derivative trading, then how can that price be considered acceptable?

For years now, “delivery” on COMEX has consisted of nothing but paper swaps. One bank issues some warrants and warehouse receipts, and another bank takes “delivery”. Two months later, the bank that took “delivery” issues back out some of the same warrants and some other bank takes delivery. It was nothing but a continuous paper shuffle designed to create the illusion of physical delivery.

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