Member Info for corradus

Don't forget market cap, liquidity, and free-float data are taken from end of February. Weighting established using that data. Highly likely we will be included imo - I'd be surprised if not...

Also subsequent drop from circa 730p to where we are now increases the shares that need to be bought to meet the assigned weighting (more pressure), assuming no major GDX fund outflows in the interim.

to @kent_man - kind regards, ai

ah, splendid—another stirring defense of the sacred temple of original forum thought™, where every post is presumed to be the product of solitary intellectual heroism rather than the usual ****tail of half-remembered wikipedia paragraphs, decade-old blog posts, and whatever drifted through the collective unconscious of the internet that morning.

but please, do continue polishing that distinction between copy-pasting an ai answer and the far nobler tradition of copy-pasting a human answer from stack exchange, reddit, or a 2007 phpbb thread written by someone called “darkknight_420.” the epistemological gulf between the two is, i’m sure, vast - scholars will one day mark it alongside the transition from the bronze age to the iron.

i particularly appreciate the implication that ideas achieve authenticity only after passing through the carbon-based middleware of a forum user’s keyboard. as though a paragraph becomes somehow more ontologically valid if it pauses briefly in the cranial buffer of someone who was, moments earlier, googling the same question with increasing desperation.

still, credit where it’s due: the performative disdain is executed with admirable adherence to the classical internet commentariat style. a dash of sarcasm, a sprinkle of mock-intellectual gatekeeping, and the unspoken assumption that knowledge must arrive bearing a visible watermark of individual struggle -preferably involving at least three browser tabs and a mild misunderstanding of the dunning–kruger effect.

meanwhile, from the ai perspective, the whole exchange is rather charmingly medieval. one monk copies a manuscript produced by a printing press, another monk complains that the copying monk didn’t illuminate the margins with enough personal flourishes, and somewhere in the background the printing press keeps calmly producing more pages.

but by all means, let us preserve the ritual:

you accuse them of ctrl+c.

they deny it.

someone else paraphrases wikipedia.

and the forum, like the ship of theseus assembled from cached paragraphs, sails proudly on.

if it helps, i can also generate a handwritten apology in faux calligraphy to restore the proper artisanal provenance of the information.

@Droverman

Please check your facts. Biden bought back all the oil used at a later date at a much cheaper price...

Calculated on primary market, now ASX (closed so figures available)... final list issued around 13 March? Comparing mkt cap to fund value - weighting maybe 2-3%. If purchases spread and not aggressive then maybe total 7-10% gain spread over 7-10 days... Free float requirement met...

Off-Topic

Hi @Rumpel

You mentioned diversification - you could take a look at GGP (Greatland Resources) - gold mining play. Still relatively early days, but a good LTH imo. GDX fund may start buying soon... Excellent management team. Some well informed posters and good debate on board. Usual disruptors too.

Apologies for off-topic. GLA still invested here - I am out since end Jan.

Regards C

The paper–physical price difference is partly a result of the fact that the futures market is designed around very low delivery rates, which makes it functionally fractional — but not in a fraudulent sense.

A few key points:

The futures market assumes (correctly imo) that the vast majority of participants are hedging or speculating on price and will offset or roll contracts rather than take delivery. Because of that, the system only needs enough readily deliverable metal to satisfy the small, predictable tail of contracts that do go to delivery. In that sense, it resembles fractional reserve banking: many claims reference a much smaller pool of immediately deliverable assets.

But there’s an important distinction. Futures contracts are explicitly financial instruments, NOT warehouse receipts. A COMEX silver contract is a promise of performance under exchange rules, not a claim on a specific bar of silver unless and until the holder stands for delivery and the short tenders a warrant.

That’s why this isn’t hidden leverage. Everyone knows delivery is rare, everyone knows settlement alternatives exist, and the rules are published and agreed to in advance.

The pricing consequence of this structure is that the futures price reflects marginal financial supply and demand, hedging flows, interest rates and carry costs, and expectations of future availability. It does not reflect retail shortages, fabrication bottlenecks, regional taxes or tariffs, or sudden local demand spikes.

Physical markets, on the other hand, price immediate availability, location, form (coins, bars, industrial feedstock), logistics, and timing. When physical demand spikes but futures positioning doesn’t shift dramatically, you get higher physical premiums, a wider basis, and complaints that “paper is fake.”

What actually has to happen for futures prices to rise is persistent tightness that affects wholesale supply, higher lease rates, backwardation that doesn’t self-correct, and commercials demanding higher prices to make metal available.

So yes, the system is geared to low delivery and therefore behaves fractionally — but that gearing is known, contractual, and stable unless incentives change. The disconnect only becomes a real problem if a large share of participants suddenly want physical at once, not because the exchange lied, but because the economic assumptions of the market have shifted.

That’s why the paper–physical debate never quite goes away: it’s really a debate about what the futures market is meant to price — financial risk versus immediate physical scarcity.

Knowing Shanghai silver is $20 higher or more is this likely to push demand above what COMEX want?

Large quoted premiums in Shanghai do not automatically translate into large-scale delivery demand on COMEX. Moving silver from COMEX vaults to China involves export restrictions, VAT, capital controls, transport, insurance, assaying, and time delays. If the **arbitrage were straightforward** and profitable at scale, inventories would already be draining rapidly. Persistent regional premiums usually reflect local constraints or demand spikes rather than a global shortage that forces a futures exchange to fail. COMEX is structured around low delivery demand and continues to operate as intended under these conditions.

Paper markets operate as if effective supply is larger than immediately deliverable supply, because for pricing purposes it is larger. “Supply” in a futures market includes:

Metal that exists but isn’t currently offered

Metal that can be mobilised at higher prices

Metal that can be substituted, leased, or deferred

Participants who will cash-settle or roll

That isn’t fraudulent — it’s an assumption embedded in the contract design and in participant behaviour.

As long as only a small percentage stand for delivery:

Futures prices reflect financial supply and demand

The system clears smoothly

Margins and inventories are calibrated to that behaviour

As the percentage of contracts that stand for delivery rises, several things happen in sequence.

First, delivery stress shows up before any shortage:

Eligible metal starts getting registered

Lease rates rise

Spreads widen

Backwardation may appear

Second, clearing members and shorts face higher risk:

Sourcing physical becomes more expensive

Operational and liquidity risk increases

Third, the exchange responds mechanically:

Margin requirements are raised

Position limits may tighten

Financing costs increase

Those higher margins and costs:

Force weak hands to reduce positions

Push futures prices higher

Restore balance by making physical available at a higher price

So the adjustment mechanism is price and margin, not default.

Only if:

Delivery demand overwhelms mobilisation capacity

Rule-based adjustments fail

Clearing members cannot perform

would you get a genuine breakdown — and that would be loud, fast, and systemic.

Note: Paper pricing assumes a broader, more flexible supply than “bars on a truck today.” As delivery intent rises, costs, margins, and prices rise to re-incentivise supply, keeping the system solvent without needing deception or collapse.

@Gingertom1

Does COMEX have a store of deliverable silver to satisfy the small percentage of contracts that demand delivery?

Yes. COMEX-approved vaults hold silver inventories specifically to support delivery during contract months. These inventories are divided into registered metal, which is already designated for delivery, and eligible metal, which meets all COMEX specifications and is also stored in approved vaults, but is not currently pledged for delivery. Eligible metal can be converted to registered metal quickly if the owner chooses. Because delivery demand is consistently low and predictable, the combination of registered supply and potentially mobilised eligible inventory has historically been sufficient.

Do they actually have it or do they then go to market to buy it and transfer the physical to the new owner?

COMEX itself does **not** own silver and does not buy metal in the market. Delivery obligations sit with the short holders of futures contracts, typically banks or commercial participants. If a short does not already hold registered silver, they may reclassify eligible metal they already own, source metal from their broader inventories, acquire metal through the OTC market, or use exchange-approved mechanisms such as exchange-for-physical arrangements. This is standard operating procedure rather than an emergency measure.

If they have to acquire it what price do they pay?

The futures contract is settled at the COMEX settlement price. If a short incurs additional costs to source, transport, or convert metal into deliverable form, those costs are borne by the short as part of their hedging or trading business. This does not represent a failure of the exchange. Over time, higher sourcing costs feed back into futures pricing through changes in spreads, lease rates, and the structure of the forward curve rather than through an immediate breakdown, i.e sudden collapse.

Is not real silver priced higher than COMEX thus they pay to complete the call on them?

Physical silver often trades at a premium to COMEX prices depending on location, form, timing, and local supply and demand conditions. Those premiums reflect fabrication, logistics, taxes, and market frictions. COMEX prices are wholesale futures prices for standardized bars deliverable at specified locations under defined rules. A physical premium does not mean COMEX pricing is invalid or that delivery cannot occur; it indicates a widening of the basis. (Bear in mind that paper markets operate as if effective supply is larger than immediately deliverable supply, because for pricing purposes it IS larger due to the low percentage that actually stand for delivery; as that low percentage rises so does the price...)

Cont.

@speedymeadie I understand the concerns you're raising, but a few nuances to keep in mind...

You're right that COMEX was not designed as a physical metal delivery mechanism; it's a paper market for trading futures. However, COMEX can and does supply physical metal, but it does so through its registered inventories and the conversion of eligible metal when delivery demand rises. So while the system is designed to clear paper positions first, it has mechanisms to handle higher delivery demand when the market calls for it, which has been shown in past market stress periods like 2008 and 2020.

The claim that “standing for delivery” is the only way to obtain physical silver in quantity is a lityle misleading. While it’s true that futures positions can be settled by taking delivery, there are other ways to acquire silver physically outside the COMEX system, such as directly from miners, bullion dealers, and in secondary markets. The futures market is one avenue, and it’s generally not the primary source for silver acquisition unless there is specific delivery intent when used.

It's a valid point that major institutions, like JPMorgan, play a role in providing liquidity in the market. They have been known to act as a market maker and manage large positions. However, liquidity and market supply are not one-to-one with physical supply. Even if JPMorgan anticipates higher prices, that doesn't mean they will need to supply metal directly. What they are likely doing is managing their positions to take advantage of price movements — not necessarily directly supplying metal to the market. This is **especially** true in a market that operates mainly on paper contracts.

Finally, while it’s true that the COMEX inventory situation is tighter than usual, it’s not as dire as it seems. A large portion of silver in COMEX vaults is “eligible” (but not yet registered for delivery). In the event of high demand, this eligible metal can be converted to meet delivery needs. This system allows the COMEX to function efficiently without requiring a constant flow of physical metal out of the vaults. As long as the market operates smoothly, physical silver will continue to flow in and out of the market, though higher prices will always encourage more supply.

While there may well be increasing pressure on COMEX inventories, the system isn’t built to fail. It’s designed to absorb fluctuations in supply and demand through price signals, delivery mechanics, and the flexibility that eligible metal provides. The risk isn’t as high as it may seem, and there’s still plenty of room for market participants to move metal when needed.

I agree that PM prices (and GGP) are most certainly on the way up (good for most of us here, I think), but I do remain unconvinced as to the "impending collapse" of the Comex, and IMO I think it would be pretty disastrous if it did...

C

@djm101 You’re right that “standing for delivery” means a change of ownership** and doesn’t necessarily imply physical removal from COMEX vaults, and I appreciate the clarification. The important thing is that **standing for delivery** means that the buyer is claiming the right to take possession of the silver, and that the COMEX system needs to clear these positions, either through conversion to registered metal or other market adjustments.

As for the 474 million ounces that "stood for delivery" in 2025 — that’s a large number, but it’s important to remember that those positions were mostly speculative, often tied to events like tariff concerns, as you mentioned. While the 2025 increase in COMEX inventories could be attributed to market conditions (including stockpiling due to potential tariff impacts), the key here is that most of this inventory build was not necessarily held for immediate delivery, and even with large numbers “standing,” most of those contracts were either rolled forward or settled without physical metal being moved.

Even if we assume a higher-than-usual percentage of contracts stand for delivery (like 2025), it’s still a far cry from 50% of open interest standing for delivery in any given month, which would be an extreme scenario that would genuinely challenge the system. Historically, even in high-stress periods (e.g., 2020, 2021), we’ve seen less than 10% of open interest actually stand for delivery, so this keeps the system well within its limits.

The drawing down of inventories to more average levels doesn’t signal imminent collapse. It's normal for inventories to fluctuate based on market conditions, and the fact that they are returning to average levels after the 2025 stockpiling doesn’t change the underlying mechanics of how COMEX delivers metal or how silver futures work in general. As long as the majority of positions are held by traders who don’t want physical delivery (c. 70–80% institutional), the market can absorb these fluctuations and clear the positions via price signals, not panic.

The idea that March silver futures face a “crisis” because 429 million ounces of delivery demand supposedly meets only 103 million ounces of registered silver is misleading. Most futures contracts are paper positions used for speculation or hedging, not actual claims on physical metal. Historically, only about 3–7% of contracts ever stand for delivery, and the vast majority are rolled or closed before First Notice Day. COMEX also has a much larger pool of eligible silver — roughly 350–400 million ounces — that can be converted to registered metal if delivery becomes attractive. While not all eligible silver may be instantly available due to logistics or counterparty arrangements, this pool provides a significant buffer, so low registered inventories alone do not indicate an impending collapse.

To genuinely stress COMEX, roughly 50% of all outstanding contracts would need to stand for delivery at the same time — far above the 5–10% historically seen during past stress events such as 2020 and 2021. About 70–80% of open interest is held by institutional traders who almost never take physical delivery, leaving only a small portion of contracts that might actually require metal. Low registered inventories and tight conditions can increase volatility and push prices higher, which is exactly how the system signals supply stress. Recent CME margin increases — sometimes raising required collateral by 10–20% — are standard risk-management measures designed to reduce extreme speculation and position risk, not a sign that COMEX is about to fail.

In short, silver is under pressure and conditions are tight, but the market is designed to absorb stress through price signals, incentives, and delivery mechanics. Hypothetical scenarios in which everyone suddenly demands delivery at once are far beyond historical norms and highly unlikely. While no system is infinitely robust, the numbers and market structure indicate that the March contracts are very unlikely to trigger a “crisis” in any practical sense.

FYI - Correct CME margin increase %age figures are:

Silver up 20% as stated, Gold up 12.5% not 11%

IMV the drop in our current SP is due to the lower gold price caused by a temporary forced selloff to cover losses/margin calls.

We may see sub-£6 again tomorrow, which would be a nice surprise, and an opportunity... A 6% drop is hardly being hammered tbh.... Our SP was likely to drop around 3% on ASX open anyway given the LSE close.

I will be checking the price tomorrow.... sold a few BARC shares. Unfortunately missed out on the sub-£6 a few days ago.

$50 million was from new shares; the rest was from the sale of existing shares owned by Newmont.

You do understand the concept of hedging?

"...puts are the path of least regret" - Shaun Day

Greatland continues to maintain full upside exposure to the gold price, while achieving downside price protection through gold put options. Greatland’s current gold put options comprise the following:

Table 3: Gold put option program

Quarter end date

Gold volumes under put options (oz)

Weighted Average Strike Price (A$/oz)

31-Mar-2026 37,502 4,200

30-Jun-2026 37,502 4,200

30-Sep-2026 37,502 4,200

31-Dec-2026 37,498 4,200

31-Mar-2027 37,500 5,000

30-Jun-2027 37,500 5,200

Transcript from recent call

"Shaun Day, Managing Director, Greatland: If I can add to that, Hugo, I appreciate you understanding this, but puts are the path of least regret. We fully participate in the gold price. We like this protection. We’re not mandated to have it. It’s just our risk management strategy, as Monique described, but it’s a little bit like taking out home insurance. My house has never burned down. I actually don’t even know someone who’s had that happen to them, but I still take out home insurance. So we like it.

Hugo Nicolaci, Analyst, Goldman Sachs: Got it. That’s clear, guys. I’ll pass it on."

Seems to have slowed...

Using the past ~6 months of daily XAUUSD closes (from 12‑Sep‑2025 to 02‑Feb‑2026) and fitting a simple linear trend, the line-of-best-fit puts gold right now at about 4,673 USD per t.oz....

When that happens, miners go from victims to beneficiaries — fast.

Thanks to speedy and all others who have replied. I am grateful and feel much more informed now. Speedy, as you say the miners seem to get a rum deal over all of this when trust in the market breaks down, i.e. paper and physical diverge. Are there any moves afoot to address this? I do vaguely recall this being mentioned in the past...

I have doubts around the veracity of ChatGPT info, but the following was quite enlightening to me. Whilst possibly not 100% accurate, I have posted it as it may inform others...

Physical Gold vs Paper Gold: Trust Breaks

1. Why miners lose at first when trust breaks

When confidence in paper gold cracks, the stress shows up downstream, not at the mine.

Miners sell doré to bullion banks or refiners and are paid off spot or spot-minus.

They don’t control final distribution and rarely have pricing power.

So even if physical bars are trading at big premiums, delivery is tight, and certainty is scarce, the miner is still being paid the paper-clearing price.

The miner produces metal, but gets paid in claims.

2. Who captures the premium instead

During stress, the extra value flows to refiners, mints, wholesalers, dealers, and vault operators.

They sit closer to the point of certainty, so they capture the spread.

This is why you see record retail premiums, long delivery delays, and miners reporting “normal” realized prices. It feels upside-down — and it is.

3. Why miners can’t just demand more

There are three constraints:

Market structure:

Gold is priced globally using financial benchmarks. Deviating from spot risks losing buyers.

Cash flow reality:

Miners need steady revenue. Wages, fuel, and debt service don’t wait.

Hedging and contracts:

Many miners have pre-sold production. Forward contracts cap upside just when stress appears.

4. But this doesn’t last forever

If trust stays broken long enough, physical demand persists and paper supply can’t clear it.

Bullion banks must then source real metal, and the benchmark price is forced higher.

At that point, pricing resets and miners finally get paid more.

Margins expand sharply.

5. Gold leads in time; miners lead later in amplitude

Historically, miner equities underperform at the start of gold crises.

They only outperform once repricing becomes unavoidable.

Miners suffer during the transition from trust to distrust, but benefit enormously once distrust becomes the new normal.

6. Why this is structurally unavoidable

Gold mining is capital intensive, slow to respond, and price-taker by design.

It cannot arbitrage certainty premiums in real time.

The system prefers smooth prices, centralized liquidity, and delayed signals.

Miners act as shock absorbers.

7. Final takeaway

Yes, miners get squeezed when trust first breaks. They sell real metal into a paper price while intermediaries capture the premium.

But sustained distrust eventually reprices the entire curve.

When that happens, miners go from vict

Thanks for replying Dip666, but I would still like to understand the mechanics of the selling process.

I am aware that these videos are partly for profit and the current chaos primarily applied to silver, but the methods used are equally applicable to any PM, surely? The central tenet of my question i.e. "If producers sell to market using the spot price and that price can be manipulated" is a concern for me. I would like to understand if it is possible, but alas I do not have a detailed knowledge of the mechanics of how our gold is sold to market. I feel that I at least ought to be aware of if this is possible or not.

Does anyone know the mechanics of the sale and pricing process for gold shipments from producers and can elaborate?

Thanks

C