Is the COMEX about to default?
If you’ve been following silver headlines recently, you’ve in all probability seen the numbers:
400 million ounces of open curiosity Solely 100 million ounces of registered silver “This isn’t hypothesis — it’s a math drawback.”
On the floor, it seems like a breaking level. Demand seems to exceed provide by an element of 4. If everybody stands for supply, wouldn’t the trade run out of silver?
Not so quick. Let’s separate reality from fiction.
The 400 Million vs. 100 Million Ounce Declare
The uncooked numbers being cited are actual.
As of early February, the March silver contract confirmed roughly 400+ million ounces of open curiosity. In the meantime, registered silver inventories hovered close to 100 million ounces.
That’s the setup behind the “COMEX default” narrative.
The belief goes like this: if even a modest proportion of contract holders stand for supply — say 25% to 50% — the trade received’t have sufficient registered steel to satisfy these obligations.
It sounds logical.
The issue? That logic misunderstands how open curiosity and supply really work.
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The “98% Supply Fee” Drawback
One of many loudest claims fueling default fears is that February noticed a 98% supply charge.
If practically everybody stood for supply in February, and March is far bigger, then March should be a catastrophe ready to occur… proper?
Right here’s the difficulty. That 98% determine is predicated on a denominator error.
Open curiosity will not be a static stockpile. It’s a circulate — contracts are always being opened, closed, rolled ahead, or settled. Merely dividing whole deliveries by one snapshot of open curiosity creates a distorted image.
It’s like taking a look at water flowing by a tub and attempting to calculate drainage by measuring solely the water stage at one second in time.
To correctly measure the share standing for supply, you’d must account for all delivery-eligible open curiosity throughout the complete contract cycle — not only a single-day snapshot.
Once you try this, the supply proportion is nowhere close to 98%.
Why February and March Aren’t Comparable
One other main flaw within the “March default” narrative is assuming February and March behave the identical approach. However the reality is, they sometimes don’t.
February is a minor supply month. Contributors who stay within the contract after first discover day are sometimes there as a result of they really need supply.
March is completely different. March is a main month — essentially the most energetic silver contract of the 12 months. It contains hedge funds, banks, and merchants who use futures for hedging and hypothesis, not essentially for bodily supply.
Traditionally, main months see decrease supply percentages relative to open curiosity, despite the fact that participation is increased total.
In different phrases, you can’t venture February’s conduct onto March.
What a COMEX “Supply” Really Means
When supply happens on the COMEX, bodily silver doesn’t sometimes transfer. A “supply” is a switch of a warehouse receipt — primarily a warrant of possession. The silver stays within the vault until the brand new proprietor decides to withdraw it.
That very same warrant can change arms a number of instances with out a single ounce leaving the warehouse.
So while you hear that “deliveries are surging,” it doesn’t imply silver is vanishing from COMEX vaults.
It means possession is altering, not location.
What If the COMEX Did Default?
Alan’s trustworthy evaluation of a March default?
Roughly 0.001% — possibly 1 in 10,000.
And right here’s the half most individuals don’t need to hear: You don’t really need the COMEX to interrupt.
If the COMEX trade collapsed:
Worth discovery would freeze Liquidity would evaporate Rules would probably tighten Windfall taxes or emergency measures may comply with
Markets operate greatest once they reprice step by step and pretty — not once they implode. The bullish silver case doesn’t require chaos. It requires repricing.
The Actual Silver Thesis
The case for increased silver costs isn’t constructed on trade collapse. It’s constructed on structural developments — provide constraints, industrial demand, financial coverage, and macroeconomic shifts.
If you’ve overpassed that, it’s value revisiting the larger image.
Earlier than you base an funding resolution on viral headlines or alarming charts, be sure to perceive how the mechanics really work.
As a result of in markets, misunderstanding construction is typically extra harmful than volatility.
Watch the Full Breakdown
This abstract solely scratches the floor.
Within the full video, Alan walks by the numbers step-by-step, explains the supply mechanics intimately, and offers his candid view on the actual likelihood of a COMEX default.
If you happen to personal silver — or are contemplating it — you need to watch this earlier than drawing conclusions.
👉 Watch the complete video right here.
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Individuals Additionally Ask
Is the COMEX going to default in March?
There’s presently no sturdy proof that the COMEX is vulnerable to defaulting in March. Whereas open curiosity in silver contracts exceeds registered stock, most futures contracts are settled or rolled over earlier than supply. Alan Hibbard explains the mechanics intimately within the full breakdown video on GoldSilver.
Does 400 million ounces of open curiosity imply there’s a silver scarcity?
No. Open curiosity represents the whole variety of excellent futures contracts, not the quantity of silver demanding bodily supply. Traditionally, solely a small proportion of contracts stand for supply. Alan Hibbard explains the distinction between open curiosity and precise supply demand is defined within the full COMEX evaluation on GoldSilver.
What does a “supply” on the COMEX really imply?
A COMEX supply sometimes means the switch of a warehouse receipt — not bodily silver leaving the vault. The steel typically stays in storage until the brand new proprietor chooses to withdraw it. This distinction is vital when deciphering headlines about “surging deliveries.”
Why was the 98% silver supply charge declare deceptive?
The 98% determine was primarily based on a denominator error — dividing whole deliveries by a single snapshot of open curiosity. Open curiosity is dynamic and always altering, in order that calculation overstates the true supply proportion.
Would a COMEX default be good for silver costs?
Not essentially. A COMEX breakdown may disrupt value discovery, cut back liquidity, and set off regulatory intervention. Lengthy-term silver traders sometimes profit extra from orderly repricing than from market chaos. For a deeper take a look at the broader silver thesis, watch the complete video evaluation on GoldSilver.
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