100 tons of gold requested for delivery from COMEX

According to the March delivery report from the COMEX gold futures market (part of CME Group), an unusually large amount of gold - 34,865 contracts, or nearly 100 tons - has been requested for physical delivery.

It’s important to note that the vast majority of COMEX trades are settled in cash, not metal. Traders do have the option to request physical delivery of gold or silver from exchange warehouses, but in practice, that only happens in about 2-5% of cases. This time, things are very different: the uncertainty surrounding the U.S. dollar has driven many buyers to opt out of cash settlement and demand the actual metal.

Can you imagine the logistics behind delivering that much physical gold? I’m guessing the sellers who offered those futures didn’t - and neither did the exchange, which is supposed to guarantee delivery.

This reminds me a bit of what happened to oil futures holders on April 20, 2020, when storage ran out and traders were forced to offload contracts at negative prices. The difference is, back then, it was the long holders who got caught in the squeeze - not the shorts.

In times like these, with so much uncertainty around the dollar, crypto feels like a much more convenient hedge than traditional market instruments. At least with crypto, delivery is never a problem - sending or receiving it is seamless, regardless of the amount.

At rabbit.io, you can exchange any amount of cryptocurrency without any limits. The only potential difficulty when swapping a large sum is that you might need to break the trade into a few parts.