COMEX Explained

Everything you need to know about the world's largest precious metals exchange — vault mechanics, inventory tracking, delivery risk, and what the data means for gold and silver prices.

Quick Answer

COMEX is the primary exchange for gold and silver futures, operated by CME Group. Its approved vaults hold physical metal categorized as "registered" (available for delivery) and "eligible" (stored but not deliverable). Tracking inventory levels and the coverage ratio — registered ounces vs open interest — reveals how much physical metal backs the paper contracts traded every day.

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Deep Dives

Frequently Asked Questions

What is COMEX?

COMEX (Commodity Exchange) is the world's largest precious metals futures exchange, operated by CME Group. It facilitates trading of gold, silver, copper, and platinum futures contracts. COMEX-approved depositories store the physical metal that can be delivered against futures contracts.

What is the difference between registered and eligible inventory?

Registered inventory has warrants and can be delivered against futures contracts — it's the 'available' supply. Eligible inventory meets exchange standards but has no warrants — it's stored in COMEX vaults but isn't available for delivery. Think of registered as 'for sale' and eligible as 'parked.'

What is the COMEX coverage ratio?

The coverage ratio is registered inventory divided by open interest (outstanding futures contracts). When this ratio falls below historical norms, it means there are many more paper claims than available physical metal — a potential delivery squeeze scenario.

Can COMEX run out of silver?

While unlikely, COMEX registered silver inventory has declined significantly. If a large number of futures holders demanded delivery simultaneously, it could create a squeeze. The coverage ratio helps track this risk — currently, each ounce of registered silver has multiple paper claims against it.

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