Total Gold Open Interest 5-Year Low

This is so astonishing that I had to start a new thread.

I'll just give you the facts and I'll let you decide what it all means.

  • We are approaching contract expiration and First Notice Day of the June13 contract. This is coming up tomorrow. At the close tomorrow, all holders of the June13 must show their intent for delivery by having 100% margin in their accounts.
  • For the three days since Friday of last week, total Comex gold open interest has fallen by 10,000, 24,000 and 27,000 respectively for a total drop of 61,726, from 445,517 to last night's 383,791. That's a drop of 13.7%. In three days.
  • For perspective, total OI bottomed out 1 day after the April13 FND at 407,112
  • Total OI bottomed out 1 week after Feb13 FND at 420,766
  • Total OI bottomed out 1 week after Dec12 FND at 427,200
  • Again, with two days to go before June13 FND, total OI is just 383,791.
  • Additionally, I've been trying to guesstimate how many might initially stand for delivery in June. Recall that 13,100 stood on FND for Feb but just 6,601 initially stood for April. The April number eventually doubled to 13,000 as folks "jumped the queue" during April.
  • Back in March, 2 days before Apr13 FND, the Apr13 OI was still 33,774 of a total OI at 419,722 or 8.04%
  • Back in January, 2 days before Feb13 FND, the Feb13 OI was 82,128 of a total OI at 438,918 or 18.71%
  • As of yesterday, 2 days before Jun13 FND, the Jun13 was 27,450 of a total OI at 383,791 or 7.15% so it looks like, at least initially, that June will be more like April than February.
  • Tomorrow, we'll get the final OI numbers for today. Since Wednesday saw gold rally $12 on a 27,000 OI drop (short-covering), what happened today during the $20 rise? Was it longs re-entering as projected on the previous thread or was it even more short-covering? If it was more short-covering, just how low is the total Comex OI right now, right this instant? 360,000? 350,000??

Finally, why does this even matter to you? I'll tell you: Because at 383,791, the total Comex open interest is at historically low levels, the lowest I've ever seen. The records I have don't go back far enough to show anything lower.This is, at a minimum, a multi-year low. Perhaps multi-decade. Maybe someone can email Gene Arensberg? He might know when the total OI was last this low.

But the only time I've ever seen a similar total OI was on 8/17/12 at 385,434. Why is that important? That night gold closed at $1615 and then set off the next day on a four-week trek that took it to nearly $1800. Are we on the edge of a similar rally? Hard to say. Back in August last year, the CoT structure was almost completely different as long interest had been completely wrung out during the awful beatdown of March-August. Now we sit instead with historic levels of Spec shorts...or at least we did when the last CoT survey was taken nine days ago. 

So, anyway, I'm no sure what it all means which is why I wanted to simply present the data to you. Is the Comex finally dying the death I've been anticipating since the MFG collapse of 18 months ago? Maybe. Did the desperate criminal beatdown of 4/12-15 begin driving the final nail into the coffin? Perhaps.

Anyway, have at it. I look forward to reading your feedback.

TF

226 Comments

silverstool's picture

first

I wasn't expecting a fresh post. I should really be on  my way to work. If my wife finds out that I'm not, then this is what I might expect.

Apologies to observant Turdites who saw this in the last thread. It tickled me. Respect to Turd for being able to think up a new thread (or two) every day. 

CLE807's picture

QE ending rally

QE infinity, metals get smashed. Maybe TPTB will allow a rally with the talk of ending QE, since inflation and the money supply have nothing to do with the metal.

gatortrader's picture

3rd

Yes I am Turd, nice

Mr. Fix's picture

4th...What does it all mean?

I come down firmly on the side of  “The death of the COMEX".

And, because the numbers look so bullish,  the spot price will continue to drop. 

All we need to know, is that in a  “force majeure”, they can settle for cash at the last “spot” price.

Does anybody actually think that's going to be anything other than a really, really low number? (800?)wink

The inventories are still dropping, it is being cleaned out now.

The real question is will they actually be able to deliver this month? 

The Watchman's picture

SGE 14.5 Tonnes May Delivery=Physical Shortage

  • 30 May 2013 Close:

    • Au(T+D) Volume: 39.9 tons of gold, a change of -5.2% from previous close.

    • Au(T+D) Open Interest: change of 2.3% from previous close.

    • Au(T+D) Delivery Volume: 7.3 tons of gold.

    • Au(T+D) Close: $1424, a change of 1% from previous close.

  • Peak One Day Au(T+D) Volume: 115.1 tons of gold, 16 April 2013.

  • Peak One Day Au(T+D) Delivery Volume: 35.7 tons of gold, 22 March 2013.

  • Current Month Au(T+D) Delivery Volume (sum of daily figures): 14.5 tons of gold as of 30 May 2013.

  • Peak One Month Au(T+D) Delivery Volume (sum of daily figures): 328 tons of gold, March 2013.

  • Shanghai Gold Exchange Au(T+D) Delivery Volume, past years:

    • 2012: 2,379.6 tons.

    • 2011: 1,897.8 tons.

  • Since the week of 26 April, the Au(T+D) Delivery Volume has dropped off to virtually zero while the long term daily average is more than 8 tons per day. The last time the SGE had a similar period of virtually zero Au(T+D) Delivery Volume was back in January 2011, a month that saw 21 days with less than 1 ton of Au(T+D) Delivery Volume per day. The physical significance/interpretation of the April/May 2013 and January 2011 drop off of Au(T+D) Delivery Volume is unknown but IMO is worth further investigations. With further data and future market developments, the working meaning of "Au(T+D) Delivery Volume" should become clearer.

question's picture

It Seems Likely That Eventually

something will give; how's that for certainty? We've been waiting long time for the shorts to go long and with low, low sale prices and miners being beaten silly the timing feels right.

Silly bast*rd me, still got hope.  Ha, I fart in EE's general direction.

Mudsharkbytes's picture

7

Lucky #7

argentus maximus's picture

Thanks Turd. I'm looking

Thanks Turd.

I'm looking forward for the weekly COT breakdowns. This week should be fun.

Spartacus Rex's picture

NURDNTH?

Had to Hat Tip Turd first

kingboo's picture

Nothing dies....

Until Jamie says it dies...

¤'s picture

???? Comex Schmomex {:-o ~ milking the cow & keeping "the beef"

From the last thread....almost "last" comment.

Regarding this post/ link and conspiracy theory/conspiracy fact..

http://www.tfmetalsreport.com/comment/317471#comment-317471

My reply filling in the ????? blank....

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Filling in the blanks up above.....long version.

Conspiracy Fact: In a classic zig-zag tactic the Fed and other CB's are publicly painting gold negative via price suppression (afterall....who would want to own volatile gold when they could re-enter the wealth effect machine...oop's...I mean stock market) while the CB's take advantage of the lower prices in an attempt to hoard physical gold while unwinding the massively leveraged gold/silver vehicles they've already milked billions from.

In this instance, they'll have milked the various etf's and other PM bullion holding vaults/accounts for all their fiat worth (and their metal) and then close those vehicles and not deliver the metal but settle in cash (the same cash they've previously milked...or printed).

The general public (not us here) who stayed away from gold will one day be told by CB's (more precisely....the BIS) that CB gold needs to be the basis of all trade settlements which gives the CB's the green light to revalue gold much higher and go to another monetary unit....an implied GFRN or Pound or Mark etc.

Revalued so high in price....that the same general public who mostly avoided gold when it was cheaper and available.....will no longer be able to afford or find gold when they'll need to do so the most.

They zig.....most people zag.

In our case on here and other PM savvy sites...we saw it coming and BTFD years ahead of time.

Moral......keep BTFD responsibly when you can while it's affordable and available.

Just imagine one day what the price, premiums or (non) availability might be at the LCS and online stores when price rockets surprise

Zoltan's picture

Hat Contest?

I seem to recall making a guess a while ago in an end of the month hat contest for gold/silver price.  Now I know I didn't win cause I was bullish but it seems to me that this contest is coming to a close (was it EOM or price of the contract at expiration?).

Perhaps we could have an update to help keep us focused on the metals and not all the other things that divide us.

Z
 

ancientmoney's picture

Losing control . . .

Have you noticed something? 

Ever since the Cyprus Steal, the ensuing PM smackdown and the run on phyzz, there has been increasing pressure on BHO.

Suddenly, Benghazi has become a focal point for congressional hearings, the IRS leaks out info that it has secretly put a squeeze on conservative/libertarian movements, and another leak spouts that the AP reporters have been hacked by government spies.

Scapegoat?  The BHO admin has now outlived its usefulness, it appears.  Eric "fast and furious" Holder has admitted he is powerless to rein in the TBTF banks.  The people are restless, but the recent rally in stocks keeps them appeased.

But, the PTB know that they cannot keep that ball in the air forever.  Someone needs to be held accountable.

Will BHO resign ala Nixon?  We he be Arkansided ala JFK?  Or will he hang around to be either impeached or blamed for escalating Syria into WW3?

The TBTF bankers have admitted they are losing control via their ongoing sacrifice of BHO, IMHO.

Still, I believe paper trading in PMs will, no, MUST be terminated, as there are too many claims on the existing phyzz, and way, way too many guns in the hands of good citiizens.

The bankers know when the jig is up.  They are projecting that knowledge through these sudden "revelations" of things that have gone on for years.

Nana's picture

Physical Over Paper

The cracks are showing.....

Maybe people are finely choosing to buy physical over paper because they think the comex hasn't the physical to deliver.

Could it be the scandals are opening eyes that were closed too?

IMF scandal

DOJ scandal

IRSS scandal

Benghazi scandal

and many more scandals.....

The Vet's picture

Cash settlement only? declining open interest....

Eventually, this equals NO INTEREST from the longs and NO INTEREST in COMEX.

It must be obvious by now to any serious trader that any profit in a long gold position is either going to be manipulated away by short sellers who are allowed to operate without position limits, or simply paid out with depreciating fiat cash.  There is no purpose in trading gold to get fiat when the primary object of the trade was to protect yourself from depreciation of that same fiat paper. 

So the longs stop opening new positions and the only volume on COMEX is between the covering shorts and the new short sellers.  No prospect of physical delivery = no new longs  = declining open interest as the shorts balance their books between each other.  No market can survive on short sales alone.

thesandbox's picture

Re: Fed's magic wand

I have wondered about that too before as why can they not just declare some sort of bankruptcy?

Since they are a private facility what could stop them from doing something of the sort and wipe out all the toxic junk on thier books?

robov's picture

Gotta Like the Action

In the metals as Gold head towards 1420.

ancientmoney's picture

Religion . . .

SouthernCross posted some passages that rankled some here. 

There are all sorts of "religions."  They aren't all necessarily Jesus or God related.

They are beliefs.  People need to have beliefs, and they have a need to share them.  While this is a PM site, is not belief in the value of PMs a type of religion?

I have (had) a good friend who I helped get a job when he was in need.  Now, I am not saying I was a good samaritan, because I recruited him because he fit the bill, and was in need of a job.  He got a fresh start in life, made peace with his estranged daughters, and married a woman who appreciated him for who he was, warts and all.

He and I used to take long walks at lunchtime, talking about politics, family, history, the U.S. civil war, and ensuing wars, religion and God.  He felt that established religions were essentially for people to feel they are a part of something, and that they become involved as a need to keep an outside control on themselves.

He believed that God was really an interconnectedness between people, alive and no longer alive.  That interconnectedness was not a man-like visage necessarily, unless that helped one to feel the connectivity, he felt.  Boiled down the interconnectedness, he felt, was love.  Love for family, for friends for humankind.  Kindness was an expression of that interconnectedness.

He dies three years ago, after a long fight with first lung cancer, then after he won that fight, brain cancer.  He was 60 years old.  He was an intelligent, unassuming man, who had developed an interconnectedness with those around him.

We need more of that today, rather than the self-centered greed that our society has turned to.  How do we do this?

The Watchman's picture

FUNNY

dilbert-cia-resume.jpg

Dyna mo hum's picture

Nana

Yes eyes are being opened and if you are real quiet you can hear the snakes hissing.

Mr. Fix's picture

So it's been a long day at work, finally read the last thread.

Maybe  if you add another digit to your price projections, it will be a better thread.

Here's to $8000 gold.devil

There was one interesting discussion that proposed that the Fed could just cancel out all of that treasury bond debt.

Never going to happen, the bankers do not cancel debt, they  will use it, and claim ownership of not only the United States, but everything in it. (Of course they might have to fight China for  it.)

The one thing the bankers are very good at, is  debt collection. You don't really think they're going to suddenly “find God”wink and become  “good guys” do you?

They are working a plan, and when this all blows up, they intend to own everything. 

vegasrick's picture

The USD is weakening and may

The USD is weakening and may have topped for a while and the miners (GDX, NEM, ABX, etc.) are starting to break out on volume.  Looks like we've got some repositioning that bode well for the metals.  

Dagney Taggart's picture

My Guess?

Rats scrambling for the lifeboats on the Titanic.

Does anybody really think this Russia/Syria/Israel pissing contest will stay nice for another month?

By the way, I just had to sell 128,000 ozs of silver and 700 ozs of palladium yesterday to buy some Berkshire Hathaway.  Warren is such visionary! Looking to retire soon!cheeky

tmosley's picture

@Zoltan I bet that it would

@Zoltan

I bet that it would be 21.99.  Too bad Turd already gave away his partially eaten hat, because I explicitly said I wanted that one.

:(

The Watchman's picture

True

ObamaPoker.jpg

Mr. Fix's picture

Dag,

LOL

s1lverbullet's picture

I might just

shit my pants if we can actually get a breakout here and sustain it.

Mr. Fix's picture

@ tmosley

$21.99 would be a lovely number to pick for the hat contest.

Oh wait a minute! That's the number I pickeddevil,wink.

Personally, I would prefer a hat that wasn't eaten, with hot sauce stains all over it. 

Dagney Taggart's picture

@Fix

Hope it will be good for another dime and dollar, respectively. Didn't have time earlier to put it in the last thread.

PS. Oops! I just bought 100,000 Gold Dec13 100 Puts

PPS. Oh yea. And since it was sunny, I bought 10,000 Facebook Dec13 100 Calls

Dyna mo hum's picture

Dagney

Go for the preferred Berkshire Hathaway stock. Its the greatest and such a bargain too. I'm all in and the train is leaving the station.   

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