Wednesday, July 21, 2010

Comex Silver Intrigue Builds

Surprisingly, the open interest on the Comex for both gold and silver declined again yesterday.  This is unusual for a day in which the price of gold and silver rise like they did yesterday.   Once again it calls into question the Comex's reporting credibilty.  There remains 719 open silver contracts - representing nearly 3.6 million ounces of silver.  This is also an unusually high amount of open contracts this late into a delivery period.  In fact, if you are a large holder of SLV who aspires to one day redeem your shares for silver, and given that JPM is the custodian and the absurd short in Comex silver, I would be very afraid to look in that cupboard for fear it might be bare.

In order to dispel any confusion over key expiration dates for the balance of July, as they apply to gold and silver trading, here is the Comex schedule:  Options expiry for August contracts is July 27;  Last trade day for July contracts is July 28;  Last notice day for delivery is July 29;  Last delivery day is July 30; First notice for August contracts is July 30 (anyone not funded for delivery must be out).  All of this information can be found LINK.

Just for the record, I fully expect that this bulge of open silver contracts waiting for delivery will come and go with very little drama - at least for public inspection.  Having said that, we have been on the waiting end of Comex silver several times, two of which HSBC was the delivering counterparty AND we did not receive our silver until well after the contractually specified last delivery day.  In fact, last year we received our April silver on June 20th. I have also received reader emails detailing similar delays in receiving Comex silver.  What this points to is extreme stress in Comex silver inventories and one of these months - although as noted I don't believe this month - the problems behind the scenes will become apparent to all.

                                 single state of man that function
                                          Is smother'd in surmise, and nothing is
                                          But what is not. 
(Macbeth, Act 1, Scene 3)


  1. Hey Dave as per usual great read.

  2. this has been talked about for a long time. and it will go on as long as JPMorgan controls the paper market.

  3. It will go until someone decides to go make a serious run on Comex silver like the Hunts did...OR, perhaps another big event will soon hit the tape...

  4. I find it funny that if you take the Dodd-Frank bill, change it to Frank-Dodd Bill, shorted it to Fr-Odd it sounds more like what it is.

    Just an afternoon observation from the Sofa.

  5. As I understand it the Hunts broker is still in prison and the indications are that he is going to die in prison. Nobody on the COMEX is going to take that kind of risk on the long side again. The COMEX will go down with a whimper on a milk bill not a fanfare on bull run.