February 1, 2016

A ridiculous fuss continues to be made in some quarters about the ratio of “registered” COMEX gold to total futures open interest. For example, a 26th January ZeroHedge article includes the following chart and implies that the high (542:1) ratio of open interest to “registered” gold could soon result in a COMEX default. To put it politely, this is unadulterated hogwash.

As explained HERE, the ratio cited in the above-linked article is meaningless, and, in any case, there are now about 15 ounces of physical gold in COMEX warehouses for every ounce that will potentially have to be delivered during the current delivery month. And as explained HERE, converting “eligible” gold to “registered” gold is a quick and easy process.

Don’t be taken in by what are either deliberately misleading presentations of COMEX data or blatant displays of ignorance regarding how the commodity exchange works.

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