Comment: In all commodities with a

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In all commodities with a

In all commodities with a futures market the total amount of futures outstanding always greatly exceeds the physical inventory, whether they're for copper, oil, cotton, wheat, or gold. This is normal because most of the futures are held by speculators, both long and short, who always close out before the delivery date, and all those closing long and short positions cancel each other out. It's only in the gold and silver markets that the conspiracy theorists make a big deal about this.

Remember that the only way that shorts could sell futures equal to 100 times the inventory in the COMEX vaults is if there are longs willing to buy those futures, also at levels equal to 100 times the inventory in the COMEX vaults. Clearly the longs are speculators who chose to close their positions (at a loss) rather than take delivery of gold bars worth less than the strike price of the futures, because COMEX hasn't declared a no-delivery situation.