There has been a remarkable turnaround in gold in the last week, which happens to coincide with the monthly futures roll from the August to the October or December contracts. Eric De Groot says this week's strong moves may be related to physical delivery notices at the COMEX exchange.

De Groot writes on his blog:

"There were unusual movements of COMEX gold inventories on July 28 and July 30 that 1) coincidentally roughly equaled what was needed for the sellers of contracts to meet delivery requirements, and 2) may indicate that unusually large quantities of COMEX gold will be withdrawn by the end of August."

This is a big deal, as it could be the start of the massive COMEX short squeeze that people have been waiting for for a long time. It follows rumors of a run on COMEX silver inventories.

Tutorial for those who don't follow the gold & silver futures markets: There is the physical market, where metals are bought/sold at spot price, and there is the paper market, where commercial traders and speculators buy and sell futures contracts at global exchanges such as the COMEX, which is based in New York.

A loud chorus of conspiracy theorists have said for years that the COMEX  -- which is often humorously referred to as "Crimex" -- is ill-prepared for a run on gold because it keeps physical inventories that are low relative to the number of futures contracts. If the physical market is indeed getting tight -- and many credible sources say it is -- futures players could attempt a short squeeze by asking COMEX to deliver against futures contracts.

Right now is a natural time for that to happen, as we are in the delivery notice period for August futures contracts. Adding more intrigue to this fact is that gold has tended to bottom in August in years past and put on some of its strongest runs have in the Sept-Dec. timeframe.