Any exchange if it wants to retain any credibility needs to stand behind its name. If I want delivery and the exchange doesn't honour the contract, I don't sue the counter party (who is known only to the exchange), I sue the exchange. If the exchange want their money back they then sue the counter party directly.
Any shortage of physical gold could be met upon delivery with cash, but it doesnt send a good signal.
Re eligible near month contracts being the only ones to stand for delivery, that's stating the obvious.
Re EFP, I am well versed, thankyou, having traded wholesale bullion for many years in London.
Re comex warehouse inventories, rather than take up time researching I will take your word for it, but like any warehouse, they are susceptible to sudden spikes in demand, which I assume would be one of the reasons they would be "forced " to deliver in cash.
I'm not here to involve myself with petty semantics btw, I merely pointed out that IF Comex were to settle via cash, it would send a poor message to the market. And incidently, it was you who raised the point that Comex could easily settle via cash, before berating a fellow poster for not knowing the mechanics of Comex.
Back in your box, chocolate....
