Comex Open Interest Update...

As I mentioned in my late day addendum to yesterday's Comex post, I misread the product calendar in my haste to get a post written and jumped the gun on when first notice day is.  Today is first notice day so anyone not capable of receiving delivery of their position has to be out. 

Yesterday saw a bigger liquidation of December gold/silver than I would have expected given that gold/silver were pretty strong, relatively speaking.  With that said, the open gold o/i for December now stands at 15,195 contracts or 1.51mm ounces.  Given that the total available-to-deliver amount of gold stands at 2.6mm ozs, if even half of the open contracts take delivery, it will stress the Comex and likely push the price of gold higher.

In silver the open interest is 5,428 contracts.  This is 27.1mm ounces vs. the 48mm ounces available to deliver.  This is 56% of deliverable silver.  Again, if even half of the contracts demand delivery, the Comex will feel stress and the price of silver should squeeze higher.

Just for the record, many of us believe that the Comex is fraudulently reporting its actual amount of physical inventory in gold/silver.  Ted Butler has pointed out that SLV had a 6 million ounce withdrawal of silver last week and is speculating that this silver may be possibly intended to help cover silver deliveries on the Comex.  JP Morgan, not coincidentally, is the custodian (safekeeper) of the silver in SLV and just happens to be the largest short interest in paper silver on the planet, both via Comex futures and OTC derivatives.  You can make your own assumptions there.  It also just so happens that only 56 delivery notices were posted in silver yesterday - about 1% of the open interest - compared to gold notices which totalled 5,016 - about 33% of the open gold interest.

Again, the banks who are on the hook for deliveries have until the end of December to deliver.  Typically most of the deliveries occur early in the delivery period.  There's really not any good reason to not deliver the goods as soon as possible - that is, unless you don't have it in hand.  I will point out that our fund, twice in the past 18 months, did not receive our silver delivery until well after the contractual delivery period.  HSBC was the counterparty both times.  I have received emails from readers over the past year describing the same experience.  I think we can all see what is going on here and I believe it's part of the reason the metals are flying today.