COMEX gold futures are the world's primary gold price discovery mechanism, yet the vast majority of COMEX contracts are never settled by physical delivery — they are offset by opposing trades before expiration. Understanding how the small fraction of contracts that do result in delivery actually work, the distinction between registered and eligible gold, and the delivery mechanism provides insight into how the paper and physical gold markets connect — and occasionally disconnect.

COMEX Gold Contract Specifications

The standard COMEX gold futures contract (ticker: GC) calls for delivery of 100 troy ounces of gold in the form of one or three 100-troy-ounce bars (.995 fine minimum) or three 1-kilo bars (.9999 fine). Delivery can only be made from COMEX-approved depositories located in the New York area — primarily Delaware Depository, HSBC Bank USA, Brinks, ICBC Standard Bank, and JP Morgan Chase Bank vaults. Only gold bars from approved refiners (on the COMEX approved brand list) are deliverable against futures contracts.

Registered vs Eligible Gold

COMEX depositories hold two categories of gold:

Registered gold is gold that has been formally designated for potential delivery against futures contracts. It is held in the form of COMEX-approved bars with warehouse receipts in the COMEX clearing system. Holders of short futures positions who intend to make delivery must hold registered gold.

Eligible gold meets COMEX delivery specifications (correct bar sizes, approved assays, approved depositories) but has not been registered for delivery. It could be converted to registered status, but its owner has not designated it for futures delivery. Eligible gold is typically owned by financial institutions, investors, and ETF custodians that hold gold at COMEX depositories without intending to deliver against futures.

The ratio of open interest (futures contracts) to registered gold is closely watched as a measure of potential delivery stress. When COMEX registered gold inventories fall sharply while open interest remains high, the theoretical delivery obligation per registered ounce rises — occasionally into ranges that would be impossible to satisfy if a significant fraction of longs demanded delivery simultaneously. These periods generate commentary about COMEX "default risk," though no actual default has occurred in the market's history.

The Delivery Process

During the delivery month, holders of short futures positions who wish to deliver physical gold submit a delivery notice to their clearing firm. The clearing firm issues a delivery notice through the clearing system, which matches with a long position holder (randomly selected or by seniority). The long holder receives a warehouse receipt for 100 oz of gold held at a COMEX-approved depository, which they can hold, trade, or eventually withdraw as physical metal.

In practice, most "deliveries" result in the warehouse receipt changing hands rather than physical gold moving anywhere. The same bar may go through multiple nominal "deliveries" over years without leaving the depository vault.

The EFP Mechanism

The Exchange for Physical (EFP) is a privately negotiated transaction in which a futures position is exchanged for a position in the physical market (or vice versa) at an agreed spread. EFPs allow traders to move between the paper futures world and the physical London OTC market, and they handle a large portion of the effective delivery demand that would otherwise flow through the formal COMEX delivery process. The EFP spread (the premium of COMEX futures over London spot) became notorious during March 2020 when it widened to $70–$80/oz due to COVID-related logistics disruptions.

For Gold IRA investors buying physical metal from dealers, the COMEX delivery process is backstory context rather than a direct concern. Your IRA gold is purchased as fabricated coins or bars, stored in allocated form at an IRS-approved depository — entirely outside the futures delivery chain. Understanding COMEX delivery helps explain why spot prices sometimes dislocate briefly from dealer premiums during periods of market stress.