The February gold contract blows away the comex record with 184 tonne standing for delivery

Customer accounts snap up a net 52 tonne of gold as bullion banks, led by JP Morgan, account for 87% of selling

January 31, 2025 11:00 AM

A record 59,296 contracts stood for delivery on the February gold contract. That far exceeded the prior record of 47,132 set on the June, 2020 contract. Recall that prior record was during the carnage of QE infinity implying that whatever is driving this surge ranks up with worldwide financial disaster.

Those 59,296 contracts amount to 68% of registered gold … and that is despite the 4.5 million oz surge of registered gold over the prior weeks.

I need to pen a piece on the ways trading has changed over the last weeks. For now, I’ll say that it was a surprise that there were few contracts settled off exchange during the run up to first notice. In fact, yesterday’s numbers had a slight increase in OI (11 contracts) between the prelim and final reports whereas the last day usually sees about 4% of contracts vanish due to midnight shenanigans. The inference is about 2,400 contracts didn’t take the bait and settle off exchange overnight. Something is different. This may be because more activity is now with non-banks, or it could be that an easy off exchange transaction, the EFP trade, is less functional due to the widened spreads. Or it could be … the longs want metal, price be damned.

Looking at the first day issues and stops report we can get a glimpse of who has been driving the market. The amount of gold sold or bought by each player is summarized graphically below:

The largest seller, by far, was JP Morgan’s house account which sold 1.49 million oz of gold accounting for 50% of the first day delivery notices.

That sale, in just the first day of the delivery period, exceeds any contract in JP Morgan’s history as you can see below. In fact, before yesterday, the sum of all gold sold by JP Morgan since 2009 was 11.2 million oz. Yesterday’s sale was a 13.3% increase in all the gold sold at comex by the House of Morgan.

You have to wonder what gold price would have done without Jay Pee’s massive sell.

I suggest to not look at JP Morgan as a bellwether for the future direction of price. In late June 2020 they sold 28 million oz of silver on the July 2020 contract … an equally jarring sell. Six weeks later silver was up about 65%.

Continuing on with the sellers … the second largest was Deutsche bank’s house account at 3,524 contracts followed by Morgan Stanley’s house account at 3,420 contracts. HSBC customer accounts were next at 2,535. If you’ve been following my thread, you know that I think HSBC “customer” accounts may be containing gold and silver price at comex by selling at comex but buying elsewhere … my “Differential Lag Theory” (link below).

Is HSBC depressing comex price while accumulating gold and silver at non-price setting venues? It could work ... The Differential Lag theory explained.

The next largest seller was Goldman’s house account at 2,421 contracts.

The theme here is that bullion banks were the dominant sellers accounting for 87% of gold sales. If you add the HSBC “customer” account, which could be a bank stealth account … the total rises to 96%.

On the buying side, JP Morgan customers were the largest at 7,414 contracts followed by BofA’s house account at 2,994. I suspect that BofA still has long positions waiting on delivery notices. Why? BofA stopped twice that amount of gold on the inactive January contract. There’s probably more to come on the February contract.

Next on the buying list … Morgan Stanley customers bought 2,786 contracts and RBC customers at 2,757. The theme here is … it is mostly non-bank accounts doing the buying as banks only accounted for 31% of gold buying.

On net, banks sold 16,612 contracts or 51 .7 tonne of gold. Of course that 51.7 tonne was transferred to non-banks.

++++++++++++++++ Silver

Brief summary as I have to run … silver saw 2,021 contracts stand for delivery on the inactive February contract. That is the highest since January 2022. More later on this.