Comex Silver "Deliveries" Surge In September

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

www.tfmetalsreport.com/subscribe

50 Comments

canary's picture

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's picture

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's picture

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? 

Dr Jerome's picture

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.

Turd Ferguson's picture

Re DGMLF, Eric discussed this

MODERATOR

Re DGMLF, Eric discussed this last Friday. FF to the 9:45 mark: https://www.sprottmoney.com/Blog/september-30-2017-weekly-wrap-up-with-eric-sprott.html

chocolatechiphorses's picture

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's picture

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! yessmiley

Jihk2431's picture

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's picture

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's picture

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!

Turd Ferguson's picture

I don't know

MODERATOR

I can try.

Response to: Future podcast
YukonCornelius's picture

Excellon Resources - Eric Sprott...

added on September 22nd - 10% holder.

Canadian ticker - EXN

Pink sheets - EXLLF

Chart looks constructive...

Looks like primarily a silver play... not alot of good ones out there

https://www.canadianinsider.com/money-moving/2017-09-28/eric-sprott-buying-excellon-resources-exn

silver10sguy's picture

Very Interesting Post Turd

The increasing rate of deliveries may be very significant.   Thanks for sharing this data Turd.   Interesting to note that CNBC is pumping the dollar right now with two goons waiting for a rise in the dollar.   Yet no news at all on the yuan/oil/gold news that is VERY IMPORTANT!  Lastly,  I read the Goldman Sachs is considering a brand new operation which would be dedicated to bitcoin trading.  

onesong's picture

Four dead at La Encantada mine!

First Majestic Reports Accident at La Encantada

VANCOUVER, British Columbia, Oct. 03, 2017 (GLOBE NEWSWIRE) -- First Majestic Silver Corp. (NYSE:AG) (TSX:FR) ("First Majestic" or the "Company") reports an accident occurred at its La Encantada Silver Mine in the state of Coahuila, Mexico.

The accident occurred as part of the construction of the 790 ramp at the La Encantada mine. A total of four miners lost their lives due to gas intoxication which accumulated in the area. There was no explosion as other media sources have reported. It is believed the operator of a scoop tram lost consciousness while mucking the area. Three additional miners later arrived to the scene to provide assistance to the ill miner. The four men were carrying all required personal protection equipment, including safety belt breathing apparatuses, but sadly did not use the equipment. The emergency response crew was dispatched and successfully extracted the four miners before transporting them to the local hospital where they were later pronounced deceased.

"Our thoughts and prayers are with the families during this tragic time," said Keith Neumeyer, President and Chief Executive Officer. "Safety is a top priority at First Majestic and we will continue to work to prevent such accidents from occurring."

The accident is being investigated by the Company and Mexican authorities. The workers' families have been notified. Immediately following the accident, First Majestic chose to cease mining operations at the mine in order to focus attention on the response and to provide support to the families of the deceased. The Company expects to resume mining operations on October 4, 2017 but the 790 area will remain closed until the investigation is completed.

Angry Chef's picture

Maidan in Spain, and some new “dog whistles”

Interesting read. The links are important as well. If anybody wants to underswtand what the long term plan of the Pentagon and the Neo-Con crazies is. Be sure to check out this link as well.

http://thesaker.is/pentagon-makes-a-20-year-plan-while-washington-outsources-its-color-revolution/

https://thesaker.is/maidan-in-spain-and-some-new-dog-whistles/

The World's Reserve currency allows for this. Gold stands directly in the path of the Empire.

RickshawETF's picture

@ YukonCornelius

I guess you missed my post "Finding Gems in the Miners" under argentus maximus's September 27th article: If You're Planning Dinner While On The Way Home, Who Is Driving the Car?

Excellon is up 7.45% in the four days since I posted my back-of-the-napkin analysis . . .

chocolatechiphorses's picture

David Morgan

Good interview - Discuss the Gold Yuan Oil trade

30 minute video

ancientmoney's picture

Dr Jerome re: gold going to $500...

"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."

----------------------------------------------------------------

Not sure who the "guru" is, but he/she may be onto something.

I have said here on several occasions, that the "paper" price of gold and silver could very well approach zero.  Here's the story in steps:

1.  physical supplies get too low for the bankers to keep stifling the PM prices through paper shenanigans;

2. banksters don't want to have to pay the longs anything;

3. so they short-sell the living hell out of the PM futures market, making past smashes seem like child's play;

4. the low is hit ($500 gold?) on a Friday comex close;

5. on Sunday night, there is an announcement that comex futures trading in gold and silver has been "temporarily" halted, and all contracts outstanding will be settled, in cash, as of the last Friday's closing price.

Voila!  We get some paper price approaching zero that gets the banks out of having to settle in phyzz, or even pay much (in fiat) to the longs who still might be playing the game!

Many more announcements will then follow, of course, but the PM prices will be set free of comex paper controls.

Ned Braden's picture

@ Dr Jerome,

In that regard, today's COT report may be quite telling.....

YukonCornelius's picture

I'm sure I miss many good posts on the boards...

I'll go back and have a look. Thanks for letting me now. 

Please keep posting great ideas!

brolgaboy's picture

it's all over but the crying......

Novo peaks out at a billion, just a concept at this point. Who knows I could be wrong, never owned any shares.

I'll take Detour insted - multi million ounces in the ground producing something like 575,000 ounces AU

for the next 20 years....and in Canada too! Incredible. as NOVO has gone up every day for the last month,

Detour has gone down. Have a look, I mean seriously until today it was down like 20 freakin days in a row.

boomer sooner's picture

Sorry, OT

Go to the 4:58 mark and tell me that's muzzle flashes on the 32nd floor?

Angry Chef's picture

Ancientmoney....

Your post makes a lot of sense. Though I suspect that foreign buyers would be soaking up the bargain basement prices all the way down thus accelerating the process. But quite possible for sure.

Markedtofuture's picture

O/T Trey Gowdy

Trey Gowdy for Congress

Friend,

I’ll get straight to it — I’ve ticked off Nancy Pelosi & her buddy in Congress — Adam Schiff, and the Democrats are targeting me for defeat.

Because I have been speaking the truth in Congress this past week (and always), Nancy Pelosi and Adam Schiff are lining up the Democrat machine to take me down next election.

Friend, I will NEVER be bullied into silence.

If I can count on you for a donation, please let me know by either following this secure link or clicking the button below.

An online contribution is the fastest way to show your support and it would mean a great deal to me. It would also send a clear message to Nancy Pelosi and Adam Schiff that picking a fight with me is picking a fight with you.

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HELP TREY GOWDY>>

I was elected to Congress because the great citizens of South Carolina put their faith in me to represent them well and hold Washington accountable.

Friend, I remember every single day why I am in Washington and I am working around the clock to make our nation proud and our future safer and brighter. I’m focused on putting Washington back to work, holding lawmakers accountable, and upholding my promise to put the safety and security of South Carolinians – and all Americans – first.

I would not be back in Washington DC fighting for our shared beliefs and values – if it were not for your help and support.

Friend, as you know, I try to hold everyone in power in Washington accountable for their actions – which hasn’t always made people happy.Though we are months away from Election Day, many are already targeting me for defeat, and no one would love to see me leave Congress more than Nancy Pelosi and Adam Schiff.

You can always count on me to stand up and tell the truth – no matter how angry that makes people. So, Friend, if you want me to be able to stay fighting and speaking up for our values then please let me know if I can count on you right now.

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Please consider making a financial contribution of whatever amount you are able to afford.

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Sincerely,

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South Carolina 4th District

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fluxplus's picture

@ancientmoney: Scenario when gold going to $500 or even ZERO

Walking Dead scenario. Nobody cares about gold there. Only food, guns and ammo.

Jihk2431's picture

I have not heard a serious analyst state that Novo

does not appear to be legitimate.  Sprott had Kirkland write that check for a reason-this thesis has legs and the question is really how big this might be.  FANG stocks trade at levels that are more obscene than this, yet people are calling for it to crash.  Good luck with that.

Turd Ferguson's picture

From last week

MODERATOR

I missed this one. For others who might also have missed it: http://investmentresearchdynamics.com/peak-housing-bubble-the-big-short-is-back/

infometron's picture

@boomer sooner Re: Sorry, OT

I tried to relocate the position of the taxi using google maps (street view) as best I could, then estimated a region as best I could (red circle) where the muzzle flashes were coming from on the taxi video. Compare that with the shooter locations indicated in NBC's "official narrative." Is there a discrepancy here?

I tried, but could not find a daytime photo of the Mandalay Bay Hotel from today. Presumably, there should be at least one other window knocked out on a much lower floor (unless by some 'miracle', it was repaired overnight, eh?).

brolgaboy's picture

Detour Gold

really getting some legs here, leaving KL in it's wake. Cannacord just upped target to $22.50 CAD

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