The COMEX currently has 223 tonnes of gold stored in its custodian's vaults. 203 tonnes of this gold is reported as eligible, which means that it is owned by others who have warrants to claim it. The COMEX vaults are storing this gold which is 'eligible' to be reclassified as registered gold in the event that the owner decides to sell it. 20 tonnes of the COMEX inventory are currently registered and available to deliver to futures contract holders who stand for delivery.
The COMEX has 20 tonnes of gold to cover a potential demand of 572 tonnes in December alone. The situation seems extreme. But, somehow the COMEX has avoided a delivery default and cash settling future contracts in all previous months. December contracts are very popular so a comparison to last year at this time is more instructive than comparisons to previous months of 2013.
Going in to year-end the COMEX currently has proportionally fewer ounces to cover December contracts. Open interest for December contracts is down 7.8M ounces or 30% from this time last year. And, inventory of registered gold is down 1.9M ounces or 75%. The charts of COMEX registered gold inventory over time that Jesse publishes show that about 1.0M ounces were added to inventory in mid-December last year. Then the inventory dropped back down by 1.0M ounces in January 2013. This gold was presumable delivered to Dec 2012 contract holders who stood for delivery, but one cannot be sure. It must be possible for the COMEX to negotiate delivery from other sources of gold to satisfy delivery demands, as well.
All I want for Christmas is for just 10% of the December contract holders to stand for delivery and publicize when the COMEX forces them to settle for cash instead of bullion. This charade has gone on long enough!