Comex Gold Delivery Was Discouraged From The Beginning

Key Concepts

• Gold Futures Market: A marketplace where contracts are traded, obligating the buyer to receive and the seller to deliver a specific quantity of gold at a predetermined date and price.
• Paper Trading: Trading contracts (futures) without intending to take or make physical delivery of the underlying asset (gold).
• Physical Delivery: The actual exchange of the underlying asset (gold) for cash, as opposed to settling a contract financially.
• Bullion Dealers: Businesses that buy, sell, and store precious metals like gold and silver.
• COMX: (Commodity Exchange Inc.) – The exchange where gold futures trading began in the US in 1975.
• Registered Dealers: Dealers authorized to take delivery of precious metals on an exchange.

Weekly Perspective – February 20, 2026: Analysis of 1974 US Embassy Cable & Market Commentary

Introduction & Website Updates

David Morgan begins by highlighting recent updates to the Morgan Report website (themorganreport.com), emphasizing simplification and ease of access. He directs viewers to sign up for the free newsletter, explore the documentaries "Silver Sunrise" and "The Four Horsemen" (focused on the power of financial elites and the rise/fall of empires), and consider the premium service and consultations offered.

The 1974 US Embassy London Cable: Core Findings

The central focus of this weekly perspective is a US Embassy cable from London, dated December 10th, 1974, classified as “Limited Official Use.” This cable, sent shortly before the legalization of private gold ownership in the US (January 1st, 1975), summarizes the expectations of major London bullion dealers regarding the impact of a formal gold futures market in the United States, which launched on the COMX in 1975.

The key findings, as reported by the dealers, were:

• Dominance of Paper Trading: Dealers anticipated that the gold futures market would be overwhelmingly dominated by speculative trading of contracts, rather than actual physical gold transactions. They predicted “physical delivery would represent only a small fraction of the total contract volume.”
• Large Volume, Minimal Physical Turnover: While futures trading volume was expected to be substantial, actual physical gold trading was projected to be comparatively minuscule.
• Price Volatility Dampening: Dealers believed a futures market would help stabilize gold prices by providing liquidity through buying and selling pressures, mitigating extreme price swings in the physical market.
• Reduced Physical Hoarding: The cable indicated a belief that the introduction of a futures market would lessen the initial surge in physical gold demand once US citizens were legally allowed to own gold. Dealers predicted that initial coin demand would be strong but moderate over time, and US Mint production could meet demand if necessary.

Morgan stresses that the cable reports dealer expectations, not a directive to suppress gold prices. He emphasizes its significance as a pre-market forecast acknowledging the expectation of paper trading dominance and the potential influence of futures markets on physical demand. He notes the document is difficult to find but provides a link on Twitter for viewers to access it.

Current Market Commentary: Silver & Delivery Concerns

Morgan briefly transitions to current market conditions, noting silver had a “very good week,” particularly on Friday, and that the market remains in “price discovery mode.” He acknowledges ongoing discussion surrounding the next delivery month and potential outcomes, choosing to remain neutral in his assessment. He points out a significant amount of metal has moved “off the exchange” (out of exchange storage), which he considers more important than internal exchange movements. He states there are approximately 86 million ounces of silver currently held by registered dealers.

Financial Reset & The Morgan Report – A Call to Action

The segment concludes with a promotional message for The Morgan Report. It highlights the current economic landscape: US government debt exceeding $37 trillion, the use of tariffs, shifting global supply chains, persistent inflation, and the devaluation of the US dollar. The message frames these factors as indicators of an “early stage financial reset.”

The Morgan Report is presented as a resource for investors seeking to navigate this environment, offering research, analysis, and strategies to protect and grow wealth. David Morgan’s 25+ years of experience are emphasized, focusing on tracking market drivers like precious metals, mining stocks, global debt, and monetary policy. The report is positioned as providing a “cleareyed view” and actionable strategies, rather than relying on mainstream narratives.

Logical Connections

The video logically progresses from historical analysis (the 1974 cable) to current market observations and then to a broader economic context and a promotional message for the Morgan Report. The historical context serves to illustrate a long-standing expectation of paper trading dominance in the gold market, which informs the current analysis. The economic context reinforces the need for informed investment strategies, positioning the Morgan Report as a valuable resource.

Notable Quote

“Physical delivery would represent only a small fraction of the total contract volume and the majority of participants would trade contracts rather than take possession.” – Quoting the core finding of the 1974 US Embassy London cable regarding dealer expectations for the gold futures market.

Conclusion

The core takeaway is the historical expectation, documented in the 1974 US Embassy cable, that gold futures markets would be dominated by paper trading, with limited physical delivery. This historical context is presented alongside current market observations and a broader warning about a potential financial reset, ultimately promoting The Morgan Report as a resource for informed investment decisions. The emphasis is on understanding the dynamics of the market beyond superficial headlines and preparing for potential economic shifts.