COMEX deliveries and registered gold (silver too)

[PMBug]

An anonymous author ("Fred") posted a comment in Harvey Organ's blog answering my question on the delivery process:

to pmbug--

Metal moved into a COMEX approved warehouse initially enters as "eligible" to be used for contract settlement. That's the term COMEX uses. Why Harvey uses "dealer" and "customer" is beyond me. If the holder of the metal sells it to a miner or industrial user or investor directly, there is no need for it to be assigned a COMEX warehouse receipt number and the metal can just sit in the account of the owner for as long as desired.

Once metal is "registered", that means it has been assigned a receipt number and that receipt can be delivered against a COMEX contract.

"Delivery" of a COMEX contract entails nothing more than the moving of a receipt from one account to another. It DOES NOT mean metal leaving the warehouse unless the holder of the receipt wants to withdraw metal. Withdrawl of metal is not part of the COMEX delivery process. It's a separate transaction between the owner of the metal and the depository.

So warehouse movements and delivery notices are much less connected than Harvey would have you believe.
...

http://harveyorgan.blogspot.com/2012...47899523823176

[rblong2us]

lightbulb smilie rqd

so why does Uncle Harv see fit to confuse us all ?

[ancona]

What a fucked up, convoluted process. Why the hell don't they just say it that way in the first damn place??

[DSAbug]

dangers of a little bit of truth.

[PMBug]

From the comments on last night's post

Fred,

Thank you for your comment to my question in yesterday's post.

If I understood you correctly, it would seem that the COMEX should be moving metal from ELIGIBLE to REGISTERED to satisfy new delivery receipts. Is this correct?

To pmbug--

Metal needs to move from "eligible" to "registered" only if there are not enough existing receipts to take care of those who want to take delivery of receipts or if the holder of the "eligible" metal wants to deliver it against a COMEX contract rather than selling it to a dealer.

Movement of metal in and out of vaults is not nearly as correlated to contract deliveries as Harvey would have you believe.

@Fred - Thanks for answering my follow up question. I'm too lazy to go back and look up the inventory of the registered vaults at the time, but I know there were several months back in 2011 (September-October at a minimum) where there were zero (ie. none) movements into or out of the registered category while several tons of metal supposedly stood for delivery. I have wondered about it ever since.

To pmbug--

That's certainly possible. There were enough receipts in existence and enough sellers of those receipts that more metal was not needed. Old buyers selling to new buyers.

[swissaustrian]

COMEX registered gold inventory is down to levels not seen since late 2011 at 2.29 moz. Another confirmation that there is ultra strong demand for physical!



It has broken below the long term trend line at 2.4 moz which can be seen here in this interactive chart:

http://www.24hgold.com/english/inter...tfcodecom=GOLD

The picture for silver is entirely different. Registered inventory is at 40.4 moz, nowhere near any lows. However, any COMEX data should be taken with a grain of salt:


Longterm interactive chart for silver inventories:
http://www.24hgold.com/english/inter...codecom=SILVER

Looks like the inventory downdrift stopped after May 2011...

[PMBug]

Haha.. May 2011 will live in infamy.

[PMBug]

There is still a bit of time for these numbers to change, but ...

... the CME reported another 99 gold delivery notices filed equal to 9900 oz , the number of gold ounces standing for delivery rose by 97 contract or 9700 oz and thus 13.22 tonnes of gold are standing for March delivery. No doubt this is a record for gold deliveries in the off delivery (non active) delivery month.
...
The total silver open interest rose by 1988 contracts from 150,924 up to 152,912. The OI for the entire complex remains highly elevated. The active front month of March saw it's OI rise by 22 contracts from 399 up to 421. We had 92 delivery notices filed on Friday so in essence we gained 114 contracts or 570,000 oz of additional silver oz will stand for the March delivery.

http://harveyorgan.blogspot.com/2013...eries-for.html

[swissaustrian]

Comex Gold Inventories Collapse By Largest Amount Ever On Record

April 9, 2013 | By Tekoa Da Silva

A stunning piece of information was brought to my attention yesterday. Amid all the mainstream talk of the end of the gold bull market (and the end of the gold mining industry), something has been discretely happening behind the scenes.

Over the last 90 days without any announcement, stocks of gold held at Comex warehouses plunged by the largest figure ever on record during a single quarter since eligible record keeping began in 2001 (roughly the beginning of the bull market). See chart below.



Total drainage of physical inventories reached nearly 2 million oz.’s of gold, which at today’s prices represent roughly $3,000,000,000 dollars.

According to chart sage Nick Laird, this data indicates that, “Eligible stocks which are owned in LBMA/Comex good delivery form are being drawn down—which means they are being removed from the warehouses. As to how and why they are [being] removed, that is a mystery. [Up until now], eligible stocks were on the continual increase throughout the bull market. Now that trend has changed.”

What is most interesting in reviewing this chart data, is seeing where the largest drops have occurred. The largest inventory drainage is being reported from JP Morgan Chase & Scotia Mocatta warehouses. See charts below.



JP Morgan Chase’s reported gold stockpile dropped by over 1.2 million oz.’s, or rather, a staggering $1.8 billion dollars worth of physical gold was removed from it’s vaults during the last 120 days.



Scotia Mocatta’s gold stockpile removals were nominal in size when compared to JPM’s, but registered in at over 650k oz’s of gold, or over $1 billion dollars worth of physical gold was removed from its vaults over the last 90 days.

In further conversation with Nick on the implications of this chart data, he commented that, “The owners have taken [their gold] offsite, and it’s no longer stored in Comex warehouses…Has the bull market ended? Are people taking their gold out of Comex storage [because] of lack of trust? It’s a mystery, [but] I think it’s more the majority of long term holders are taking their gold elsewhere…because they no longer want to store at Comex.”
—
Bottom line: While mainstream voices question whether or not gold is still in a bull market, smart money appears to be questioning something else. They appear to be asking themselves, “Do we want to continue storing our physical metal within the Comex system? How can we best whisk it away from fraud, theft, or bankruptcy (including our own)?”

The timing of this trend change is also quite shocking, as it’s happening during a time in which public sentiment towards the metals are at their worse levels in years.

The boy who cried wolf has certainly cried many times over the years with regard to the Comex, but if there was ever a time to be concerned of a major market event or default—now might be it.
—
Enjoy the article? Please support the site by sharing this URL page link with friends, family, and your favorite chat forum.

Thanks,
Tekoa Da Silva
Bull Market Thinking

http://bullmarketthinking.com/comex-...unt-on-record/

Meanwhile Tekoa da Silva's website has been under DDoS attack all day...
http://bullmarketthinking.com/the-si...interruptions/

[swissaustrian]

Jim Sinclair's take:

As a gold futures exchange transforms to a cash exchange, expect this phenomenon to appear first, followed by an increasing price of gold, followed by 100 percent margin, followed by delivery not in kind but cash settled.

http://www.jsmineset.com/2013/04/09/...ws-today-1504/

[swissaustrian]

NOTHING TO SEE HERE

The Site Has Been Repeatedly Crashing Today, Please Pardon The Interruptions

April 9, 2013 | By Tekoa Da Silva

Beginning this afternoon following release of the Comex Inventory piece, Bull Market Thinking began crashing repeatedly. I do not know why, but it is continuing to happen. I am working with the hosting provider to restore full functionality as soon as possible.

Thanks for your patience and support.

Best,
Tekoa Da Silva
Bull Market Thinking

http://bullmarketthinking.com/the-si...interruptions/

[rblong2us]

seeing that no one wants the barborous relic any more, they are pulverising it and dumping it in the sea, off Alaska, rebalancing supply/demand and creating lots of new jobs, in one perfect move .........

Just gotta be careful to ensure they only dump it at a rate that keeps it around $1600 an ounce.

[ancona]

The Brotherhood of Darkness doesn't like that this info is being disseminated. Soon, all sites [such as this] will experience denial of service attacks as the gold/silver situation becomes more and more unmanageable. The truth will eventually be on the street either way. The Dark Princes are backing up their trucks as I type......

[PMBug]

SD reporting that COMEX silver is also disappearing:

Epic drainage of physical silver inventories continued Monday, as Brinks’, CNT, and Scotia all reported massive withdrawals of silver from their COMEX depositories. The biggest withdrawal came in the CNT vault, where 1.138 million ounces (including 737k REGISTERED oz) were withdrawn- an astonishing 17.3% of CNT’s entire physical silver inventory vaporized overnight!
...

More: http://silverdoctors.com/nearly-20-o...vaults-monday/

[swissaustrian]

The silver reduction was rather small compared to gold.

[PMBug]

The silver reduction was rather small compared to gold.
...

Looks like it was just getting started...

COMEX registered silver inventories have fallen off the proverbial cliff this week, as registered supplies have dropped a massive 10% in the last 48 hours! ...

http://silverdoctors.com/comex-silve...0-in-48-hours/

[swissaustrian]

It maybe isn't a coincidence that gold inventories at the COMEX have been dropping so fast when at the same time GLD inventories were dropping like mad. If this is the reason, then the GLD inventory is COMEX futures contracts which would be a major scandal.

[PMBug]

I checked Harvey's latest report. Looks like (as much as you can trust the COMEX reports anyway) the 7-9 standard deviation crash has stopped the draining of COMEX vault inventories:

Gold:

Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz nil
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 94.45 (Brinks)

Silver:

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 914,919.66 oz (Brinks,CNT,)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 1,543,323.695 (Brinks,CNT, HSBC)

[swissaustrian]

No inventory moves on such a change in prices? Sure.

[rblong2us]

dumb question -

why would a large drop in pm prices slow or stop the draining of COMEX vault inventory ?

I got the idea that paper traders were dumping but everyone else was discretely trying to buy metal ..........

I probably need to read up all over again how the paper markets work )-: