COMEX reports on its gold inventories on a daily basis. There are 2 major reports: Еligible and Registered.
The eligible part of the COMEX gold doesn’t belong to the exchange (the gold that belongs to banks, hedge funds and major investors is simply stored in the exchange’s vaults). This is a convenient and relatively cheap way of storing gold. This gold can be used to settle accounts between futures traders.
On top of that, any gold outside COMEX is not eligible for spot trading. In order to approve the sale/purchase of such gold it is necessary to conduct complicated verification procedures.
The registered gold is used for futures delivery. The chart below, courtesy of Masterforex-V Academy, shows us the dynamics of weekly changes in COMEX gold inventories:
We can see that gold is gradually flowing from Registered to Eligible, with the rest of the registered gold being around 665243 ounces, which is the new all-time record low:
The registered gold stocks cover presents special interest:
The cover ratio has increased by 40 points since spring 2013. The bullish tendency does impress! At this point the figures indicate 57. This means that there are 57 claims for any ounce of gold. The market situation indicates record lows in terms of inventories. Lower gold prices stimulate buyers.
Since the price of gold doesn’t react to these changes, we can agree with those experts that say that the US government and banks control key financial markets as this is needed to maintain the easy-dollar policy. Experts say that the gold market has been regulated since 2011.
While the physical metal inventories may eventually get exhausted and the debt ceiling voting in the US Congress (scheduled for October 17th) is near, the likely prediction is slow growth. On top of that, at this point, the cost of gold production is 1300 per ounce. Therefore, any further decline is very unlikely.
Courtesy of the Commodity Trading Department of Masterforex-V Academy.
