Page 27 - Bullion World Volume 02 Issue 08 September 2022

Bullion World | Volume 2 | Issue 09 | September 2022

Gold
Zooming in on the month-over-month change shows
the acceleration in metal leaving the vault. 3.7M
ounces were added in March and April. Since then,
6.6M ounces have left the Comex system. Current
outflows have exceeded the outflows during the height
of the squeeze in 2021.

Pledged gold (a subset of Registered) has come
down some after setting a new record back in July.
Pledged is Registered but not available for delivery,
which means gold has lost an additional 900K ounces
of available delivery supply since March when you
include Registered.

The daily activity since the last stock report shows
a very steady outflow of metal from both Registered
and Eligible. This has not been one or two days of big
outflows; it has been a relentless removal day after
day. Last Friday was the only day of net inflows over
the last month.
Gold entered backwardation last month for three
consecutive weeks until the August contract was
replaced with the December contract. It has now
entered the strongest contango since September
2020. In 2021, the conversion from August to
December resulted in a spread increase less than $1.
In 2022, that same contract conversion flipped the
price almost $20!

Silver
Again, the action in silver is a bit more nuanced.
Investors are taking delivery and then moving
registered metal to Eligible. They are taking it out of
the available supply for delivery but are still keeping
it in the Comex system. If the current pace keeps up,
eventually that silver will start to leave the system.

While gold is back in contango, silver remains in heavy
backwardation. This is the longest such period of
continual weekly backwardation since 2013

The daily activity is a bit more erratic in silver than in
gold. July saw a very continuous outflow of Registered,
but since August started the outflows have been in
Eligible with Registered remaining fairly flat.

27