5,920 Feb-2014 contracts filed for delivery on first notice day January 31st. As of last Friday, 2,549 have been settled and 1,611 have been 'lost' to delivery. The trend looks very similar to the last major delivery contract month of Dec-13.
As expected COMEX participants have recently added to registered gold inventory in order to satisfy settlement demand during the February contract month. Registered inventory has grown from 439,900 ounces on January 31, 2014 to 657,395 ounces last Friday.
JPM Continues to Dominate Settlement Activity
So far this month JPM House Account and Bank of Nova Scotia House Account have issued or delivered 59% and 32%, respectively of all warrants for settlements of the Feb-14 contracts. HSBC House Account has stopped or taken ownership of 64% and Barclays has stopped 25%. Once again JPM House Account is the majority of the volume. This month JPM is on the issue side after stopping 6,254 contracts or 96% of the notices during December 2013.
Same As it Ever Was
History is repeating itself. In December 2012 JPM House stopped 50% of the delivery notices. And then in February 2013 JPM House issued 7,005 contracts which was 53% of the total. During 2013 JPM with both their house and customer accounts went on to issue the vast majority of notices during March, April, May and June. You might remember what happened to gold prices during that time.
But, The Ammo is Running Low
Registered gold inventory at the COMEX is so much lower this year that it would be difficult for any participant to push prices lower. For example, where could JPM get over 900,000 ounces of registered gold to issue now as they did last April between their house and customer accounts? At the beginning of February 2013 COMEX had 2,295,000 ounces of registered gold in inventory. To start this February COMEX had 439,900 ounces in inventory. Of course JPM or any other participant can always get registered gold from the eligible inventory category by paying a higher price! Last year at this time gold was $1,660/ounce.