It seems that the gold repatriation request from Germany gave ideas to many investors, countries and sovereign or investment funds. Case in point, if we analyse the delivery requests on the COMEX for the month of February, we see that they are reaching the astronomical amount of 43,26 tons of physical gold, or 1,391,000 ounces of gold to deliver.

Why is this information paramount ?

As explained by Harvey Organ :

Because, for comparison purposes, delivery requests for the month of December 2012, normally a record month for deliveries, amounted to only 10 tons of gold.

Secondly, because the COMEX is normally a « paper » gold market in which investors rarely request converting their contracts into physical gold. Large investors, bullion banks and investment funds looking to acquire physical gold generally do it on the LBMA in London. Thus it’s possible that the LBMA is also showing signs of scarcity, with this movement toward the COMEX to acquire physical gold.

And, thirdly, because since the ‘70s, it’s the first time that there is such a request for physical gold delivery from the COMEX.

The run on physical gold is accelerating.

Now as mentioned by, the COMEX can force cash settlement in the sense that investors will get cash instead of physical gold. The same thing is true for ETF. Investors won't lose everything but they won't be able to get physical gold when the price explode higher.

Let us also note :

• Gold just reached a historic peak in yen yesterday, at 153,000 yen per ounce of gold.

Physical silver production fell in 2012. Not  especially good news for the investment banks that are massively short silver, because they will have to deal with very important delivery requests (converting paper contracts into physical silver) from investors in the coming months, as this bank run on gold and silver continues.

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The information contained in this article is for information purposes only and does not constitute investment advice or a recommendation to buy or sell.