Commentaries, Silver

Intrigue Builds In The Comex Silver Pits

The July silver open interest increased by 31 contracts on Friday. Those people wouldn’t be buying unless they intended to take delivery AND they couldn’t buy unless their account was funded for the amount needed to take delivery. I don’t scrutinize the o/i like this every month, but I have never noticed open interest increasing in a delivery month this close to to the end of the delivery cycle.  Here’s the open interest report for Friday: Comex Metals O/I

Why is this significant?  Because right now there is over 3.5 million ounces of silver standing for delivery and silver has been leaving the “eligible” vaults (i.e. customer storage vaults) nearly every day this month.  I really do not believe that the Comex has the ability to deliver that much silver without tapping into an outside source, like SLV.  JPM, per Ted Butler’s analysis of the COT and Bank Participation Report, is short close to 30% of the entire Comex silver open interest.  Not coincidentally, JP Morgan also happens to be the custodian of SLV.  If you don’t believe that there is foul play going on, something is wrong with your brain.