What is the COMEX?

The COMEX is the main exchange for gold futures and is a division of the Chicago Mercantile Ex-change, or the “CME” for short. COMEX simply stands for “Commodity Exchange”, and it’s not just gold that is traded here. Several other metals are also traded here, including silver, aluminum and copper.

The COMEX is based in the United States but traders from all over the world buy and sell on this exchange, and its prices and daily activity plays a big role in the global precious metal markets.

Gold futures have been traded here since 1982, although the exchange itself was first founded back in 1933. In 1994, the COMEX and the NYMEX (the New York Mercantile Exchange) came together in a merger, with the former now operating as a division of the latter, and with the com-bined exchange trading out of the World Financial Center in Manhattan. Both of these exchanges operate as divisions of the CME Group, and there are close to half a million futures traded on this market every single day, which makes it one of the most active markets in the world.

Physical Deliveries

Although COMEX trades are backed by a physical product, they very rarely involve the exchange of actual precious metals, with trades being made simply on the promise of that metal and on the knowledge that it does indeed exist. At least, that’s the theory, but the truth is that if every trader suddenly decided to settle their contracts by taking delivery of gold or silver, the warehouses would not be able to meet demand, at least not straight away. However, metals can also be sourced from outside of these warehouses as and when needed, so these deliveries can be met in time.

For those looking to take delivery of gold or silver, they can only do so between the first notice day of the contract and the last trading day of the contract. They must also ensure that all the necessary personnel have been notified and that they have the required receipts.

What is a COMEX Deliverable Bar ?

Also known as COMEX Acceptable bars, these are precious metal bars that are produced by COMEX approved refiners and are created to strict standards set by COMEX. These standards dictate the minimum purity of the bar, as well as its weight and size. A COMEX Deliverable or COMEX Acceptable bar is used to satisfy demand for precious metals on the Commodity Futures Trading Exchange, which means that when someone requests delivery of one of their futures, they will be given one of these bars.

For gold or silver to be considered as COMEX Deliverable or “Good Delivery”, it must meet the following standards, all of which differ slightly depending on the metal being traded:

  •     Assay: The product must have an assay certificate, and this must come from an assayer who has been approved by COMEX. An assayer is an independent authenticator who runs checks on the products being produced by a refinery, verifying that they meet a certain level of purity and then verifying this by supplying a signed assay certificate. In the case of gold bars, this purity must be a minimum of .995.
  •     Size: There are also specifications regarding the size of the bar, and these change depending on the metal being traded. Not only are there strict rules on how long, wide and thick a bar is, but there are also rules that determine the degree of the “undercut”, which is the slope found on the sides of the bar.
  •     Marks: Along with an assay stamp, which must be on the bar itself, there are also rules that re-quire other marks to be included. These include a stamp that lists the purity of the metal (to a predefined number of figures) and the year it was produced.
  •     Other Specifications: The weight of the bar is also governed by a number of rules, and bars are also required to include a serial number, which is unique to each individual bar.

These strict standards provide some peace of mind to the buyer, as there is no need to worry about the legitimacy of the gold or the silver you are trading, and all of the checks and the guarantees are done for you before the trade begins and long before any actual bars are delivered.