Comex Silver "Deliveries" Surge In September

50
Tue, Oct 3, 2017 - 11:22am

Though Comex metal "delivery" remains a sham and circle jerk where The Banks simply shuffle paper warehouse receipts and warrants, we thought the latest totals for September were noteworthy enough to bring them to your attention.

Again, we've written about this on countless occasions and this post is not meant to imply that "the Comex is about to break" or that "there is a run on The Banks". Instead, September saw the continuation of two trends of which you need to be aware. Comex "deliveries" are up dramatically in 2017 and JPM continues to stand down.

First, take a look at the historical pattern of "deliveries" during the so-called "delivery months" of March, May, July, September and December. Below is a summary of the "delivery" activity for 2015:

The one way we've always quantified "deliveries" here at TFMR is to consider the total amount of stated "deliveries" at the end of each month versus the total number of contracts that had been left open and allegedly "standing for delivery" at the beginning of the process. For 2015, it looked like this:

Contract Total Standing Total "Deliveries" Percentage

Dec14 3,950 2,975 75.3%

Mar15 3,142 2,583 82.2%

May15 3,371 2,840 84.2%

Jul15 2,699 3,637 134.8%

Sep15 2,198 1,555 70.7%

Dec15 4,078 3,939 96.6%

As you can see, the only outlier in 2015 was the month of July where nearly 1,000 additional contracts materialized requesting immediate "delivery". Other than that, it was a rather orderly process.

Now, let's look at the summaries for 2016.

Contract Total Standing Total "Deliveries" Percentage

Mar16 3,804 1,356 35.6%

May16 5,603 2,716 48.5%

Jul16 2,957 2,474 83.7%

Sep16 3,412 3,215 94.2%

Dec16 3,056 3,980 130.2%

Again, a rather mundane year of silver "deliveries" with one exception. This time, the month of December saw an "oversubscription". Where Jul15 had seen "deliveries" exceed standing by 938 contracts, Dec16 saw the same exception to the tune of 924 contracts. Other than that, it was another somewhat orderly year.

So let's move on to consider the "delivery" action in 2017 to see if anything unusual is taking place:

Contract Total Standing Total "Deliveries" Percentage

Mar17 7,299 3,872 53.1%

May17 3,360 4,657 138.6%

Jul17 2,423 3,287 135.7%

Sep17 4,103 6,575 160.2%

Well now. This is beginning to look a bit different, isn't it? Go back up and review the data for 2015 and 2016. Note that only one month in five ever shows a "delivery" total in excess of the amount of contracts still open before First Notice Day. And now, if we include last December, we've seen this occur in four of the past five months with the most recent "delivery month" of September seeing the largest percentage "oversubscription" yet at 160.2%

And when we look at it in absolute terms, the "deliveries" for last month get even more interesting. Note that there were 4,103 contracts still open when the contract went off the board on August 30. At 5,000 ounces per contract, that's a total potential "delivery" obligation of 20,515,000 ounces of silver or about 638 metric tonnes. By the end of the month, the Comex had actually "delivered" 6,575 contracts for 32,875,000 ounces of silver or about 1023 metric tonnes.

So, what's the deal here? Why the sudden rush in 2017 to jump the queue and take immediate "delivery" instead of simply waiting until the next "delivery month"? Could it indicate wholesale physical tightness? Could it indicate a lack of trust amongst The Banks? Could it indicate absolutely nothing?

Well, one thing we know for certain is that this anomaly is not being caused by the House or proprietary account of JPMorgan. Recall that in March we caught JPM blatantly exceeding that stated front-month position limits for Comex silver. We wrote about it at the time and even went so far as to file a formal complaint with the CFTC: https://www.tfmetalsreport.com/blog/8243/march-comex-silver-deliveries

Back in July, we next noticed that the House Account of JPMorgan had completely discontinued all "delivery" activity in Comex silver: https://www.tfmetalsreport.com/blog/8451/specific-peculiarity

Well guess what...that trend has continued through September. See below:

So, at the end of the day, what do we make of all this? I guess that's up to you, the reader, to decide. No doubt "deliveries" in Comex silver have increased dramatically in 2017 but what is a "delivery" anyway? Is it actual metal or just an exchange of warehouse receipts between Banks, made to create the illusion of physical delivery for their paper derivative market? And does this increase in "deliveries" translate to physical demand and Comex stress or is it just emblematic of the general increase in total Comex silver open interest?

These are all interesting questions and, unfortunately, these deliberately-opaque "markets" make it impossible to state the answers with certainty. One thing is certain, however, and that is the notion that no institution built upon fraud, lies and deceit will stand indefinitely. Eventually, this current paper derivative pricing scheme will fail as true physical demand overwhelms The Banks' ability to manage their unallocated and fractional reserve system. For that day, we continue to prepare accordingly.

TF

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  50 Comments

canary
Oct 3, 2017 - 11:33am

Cartel allows gold to rise...

To cover their tracks before the COT expires later today....Also, saving some ammo on USD/JPY, since DOW is up anyway.

YukonCornelius
Oct 3, 2017 - 11:34am

Looking for related plays on Novo Resources.

So far we have KL - best of breed.

ARTTF - Novo partner.

DGMLF - Kirkland Lake just invested 5 million yesterday.

Note - ARTTF and DGMLF have already run up some. I am just putting them out there for discussion and following... I have initiated small investments in both to keep a closer eye...

If you have other plays please post! Thanks all :-)

Blythesshrink
Oct 3, 2017 - 11:42am

So with JPM not stopping

So with JPM not stopping contracts at the moment, who's taking all the deliveries? Is any single institution taking the lion's share?

Oct 3, 2017 - 12:01pm

Quick, somebody text Marchas

I'd hate to see his 4th position go to somebody else.

I see that ad in the sidebar that says "Gold's going down in 2017" with the zig-zag red line chart moving down. I bet the bullion banks place those ads to assist their efforts. My sister in law says that a "guru" she knows is predicting that the price of gold will fall to $500 and everyone better sell out now. She wanted to know what we thought. We have been trying to persuader her to keep strong hands. We told her the price of gold will likely remain stable or be pushed to lower the rest of the year and then be pushed back up in 2018, just like the last 4 years. (Another one of those patterns). If she wants to pay off some debt, sure, sell some gold, but be sure to keep some stacked away also--you gotta do what makes you feel comfortable.

Edit: now the sidebar ads says "7 reasons to buy gold now"

I am so confused.

YukonCornelius
Oct 3, 2017 - 12:11pm
CC Horses
Oct 3, 2017 - 12:17pm

How do you determine which bag contains the fake gold?

There are five identical bags of gold, and each contains ten gold coins. However, one of the five bags contains fake gold. The real gold, fake gold, and five bags appear identical, except the coins of fake gold each weigh 1.1 ounces, and the real gold coins each weigh 1 ounce. You have an accurate digital scale and CAN USE IT ONLY ONCE.

There is a straight-forward answer to this question, but let’s speculate on what happens when we involve politics and prejudice.

The Swiss Gold Refiner: We’ll perform a simple and non-invasive test, return the fake gold to London, melt and refine the genuine gold into 99.99% purity and cast it into a one kilo bar. The remaining gold bullion will be used in another bar and both will be sold to China where gold is understood and valued.

Ben S. Bernanke: Nobody really understands gold prices and I don’t pretend to understand them either.” These coins will be shipped to my friend, the CEO of Goldman Sachs, for evaluation.

Mainstream News Reporter: We believe these coins are fake news. An anonymous source has confirmed that all 50 coins are fake gold and were manufactured in Russia, possibly at the request of our Republican President. This is another example of Russian gold hacking that must be stopped.

(There are several others but I did not want to copy the entire article.)

Another solution to the gold coin dilemma is:

Take one gold coin from the first bag, two from the second bag, three from the third bag, four from the fourth bag, and five from the fifth bag. If the weight on the scale ends in .1, then you know the first bag contains the fake gold. If the weight on the scale ends in .2, then the second bag contains the fake gold, and so on.

https://deviantinvestor.com/

onesong
Oct 3, 2017 - 12:17pm

Great post this morning Turd...

always insightful in helping us determine what to do next! Because of your guidance I had already made up my mind to pull the trigger late this Friday before I listened to last night's podcast. Going to be maxing out my KL and Novo holdings and keeping my fingers crossed for the three steps forward ending the year.

Good luck to all in the final quarter!

Jihk2431
Oct 3, 2017 - 12:32pm

BTW, Novo breached the $1 billion mkt cap mark today.

watch passive buying go crazy on this one. I see it going much higher, particularly given where metals prices are trending.

NUGTCALL
Oct 3, 2017 - 12:37pm

Future podcast

Can we get the CEO’s from Artemis and De Grey on future podcasts? These company’s look potentially very exciting.

Thanks

YukonCornelius
Oct 3, 2017 - 12:43pm

fwiw - 07/31/2017 Sprott took 5% stake in SVBL - Silver Bull Res

Silver Bull Resources. Stock trading at .10 cents a share... on my watch list

Putting together my list... if we get a "gold rush" everyone will want to know what the Eric Sprotts of the world are in. Is Novo the beginning? We shall see!

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Key Economic Events Week of 11/11

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11/14 10:00 ET CGP on Capitol Hill
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9/10 10:00 ET Job openings
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