What is the COMEX?

gold bars

The COMEX (Commodity Exchange Inc.) is the world’s primary futures and options market for trading metals like gold, silver, and copper.

COMEX provides a regulated and transparent platform where participants can manage risk, speculate on market movements, and gain exposure to the underlying assets. It is a vital component of the global financial system and a key hub for price discovery, as the prices and daily activities on the exchange impact the precious metals markets around the world.

Gold Trading – The Comex

How Does a Gold Futures Contract Work?

When you buy a gold futures contract on COMEX for delivery in December, you’re not physically buying gold right away. You are entering into a legally binding agreement to purchase a specific quantity and quality of gold at a predetermined price on a specified date in December

• Futures Contract Basics: A gold futures contract is a standardized agreement. The standard size is 100 troy ounces of gold, though there are also mini and micro contracts available. The contract specifies the quality of the gold (e.g., a minimum fineness of 99.5%) and the delivery location (COMEX-approved depositories in New York).
• The Role of Buyers and Sellers: The futures market involves two types of participants:
  • Hedgers: These are people or companies who use futures to manage price risk. For example, a gold mining company might sell a futures contract to lock in a price for the gold it will produce in the future, protecting itself from a potential price drop. A jeweler might buy a contract to lock in a price for the gold they will need for their products, protecting themselves from a price increase.
  • Speculators: These are traders who are not interested in the physical gold. They are trying to profit from the price fluctuations of the contract. They buy if they believe the price will rise and sell if they believe the price will fall. Speculators provide liquidity to the market.
• The “Paper” Market vs. Physical Delivery: The vast majority of futures contracts are not settled with physical delivery. Instead, they are “closed out” or “offset” before the delivery date. The buyer of a contract (a “long” position) will sell an equivalent contract, and the seller (a “short” position) will buy back an equivalent contract. The difference between the buy and sell prices determines the profit or loss.
• Leverage and Margin: Futures trading is highly leveraged. You don’t pay the full price of the gold when you buy a contract. Instead, you put down a small amount of money called “margin,” which acts as a performance bond. For example, a contract for 100 ounces of gold at $2,000 per ounce has a notional value of $200,000. However, the initial margin requirement might only be around $10,000. This leverage can magnify both profits and losses. If the price moves against you, you may be required to deposit more money (a “margin call”) to maintain your position.
• What Happens in December (for the minority who take delivery):
  • First Notice Day: This is the first day that a seller can notify the COMEX clearinghouse of their intent to deliver the physical gold.
  • Delivery Process: If you, as the buyer, intend to take physical delivery, you must inform your clearing firm. The clearing firm then notifies the exchange. The seller delivers a “warrant” or “receipt,” which is a legal document of title to a specified quantity of gold held in a COMEX-approved vault. The gold must meet strict standards for purity and be from a COMEX-approved refiner.
  • Final Payment: The final price for the gold is set at the time the seller gives their notice of intent to deliver. The buyer must then pay the full remaining value of the contract to their clearing firm to take possession of the warrant. The metal can then be moved from the vault, but it will need to be re-assayed if it leaves the approved chain of custody.

In summary, buying a December gold contract on COMEX is typically a financial transaction for speculation or hedging, not a direct purchase of physical gold. The mechanism for physical delivery exists to ensure that the futures price and the physical gold price converge, but it is rarely used by most market participants.

Gold Trading – The Comex

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High Grade Silver Ore Slab

silver slab – example only

Nice sawn vein specimen of fresh, unaltered high grade silver ore from the world-class Cobalt Ontario deposits. Sawn on one side only.  The deposit was described in Mineralogical Record, Volume 43, Number 6.  In general, veins are predominantly composed of carbonates (calcite and/or dolomite) with arsenides and sulpharsenides of Co, Ni and Fe with native Ag and Bismuth.  Most of this material has been squirreled away in collections by now, although specimens do occasionally come to market.

There are a few of these silver slabs available. The very bright silver really makes this piece stand out, but, unfortunately makes it all so hard to photograph. As an example the one pictured above is 66 grams for $45.

Silver, Bornite

There are a few of these beautiful native silver w bornite specimens available. Here is a 2 inch x 1 inch, Apx. 17.5 grams – Native Silver on Bornite thumbnail specimen from San Martin, Mexico. As an example the one pictured above is 17.5 grams for $60. 

Avon Gold Rush Collectible stein

1987 8 1/2” tall  San Francisco Gold Rush Handcrafted in Brazil for Avon. Each one of is individually numbered (#32017) this is the last one. $35.

For further information on these: seo711@gmail.com

All the items shown here are very limited and subject to prior sale without notice.

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Also see the most expensive type of gold nuggets, the Crystalline Gold Nuggets

Crystalline gold

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  • Keep in mind land use and land boundaries are constantly changing,  before going to a unknown location you must do extensive research not only into the current weather conditions, access and current land status.  Keep In mind private property owners and mining claim owners do not take kindly to trespassers and or claim jumpers. Always follow local laws and regulations related to prospecting and land use. Regulations and restrictions are constantly changing on BLM lands, State lands, National Monuments  and tribal lands. It is your responsibility to totally investigate any potential prospecting area  prior to heading out.  Failure to do so, could not only result in massive fines but also imprisonment and confiscation of all your equipment.