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Ed Zimmer
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Ed is a graduate of The School of the Ozarks (now known as College of the Ozarks) in Southwest Missouri. He spent 14 years in broadcast news in the Midwest covering, among other things, commodities. He is currently manager of a healthcare support facility doing over two million dollars a year in... More
  • COMEX silver breaks 50% registered/eligible levels 1 comment
    Sep 23, 2009 10:47 AM

         The past few days of reports from the COMEX are pretty good reading and raise some questions about where silver is headed.    I will admit to not having followed the COMEX stocks for very long, but the overall view is that combined silver in storage numbers are falling.     Last Friday some 3.4 Moz of silver was deposited in Eligible accounts in Scotia Mocatta and HSBC bank of New York, offset by a withdrawl of 15,000 ounces from HSBC registered accounts and 650,000 ounces from Eligible accounts (NYSE:HSBC).   That boosted total silver stocks to 119.5 Moz of silver.   

    That all changed on monday (9/21) when Brinks reported a withdrawl from registered stocks of 3.1 Moz and another 310,000 ounces from eligible stocks.   Additional deposits for Scottia Mocatta eligible stocks of 400,000 ounces was offset by 300,000 ounces withdrawn from registered HSBC stocks and 150,000 ounces from eligible stocks.    The net change was a removal of 3.5 Moz of silver,  mainly from registered stocks of silver.

       For the first time since I've been tracking the COMEX SIlver, the total registered silver (available for delivery against Comex paper contracts) has fallen below the amount of eligible silver (silver owned by others that meets Comex specs).    Total silver stocks are just a hair over 116 Moz at the moment, down from 134.1 Moz in 2008.

      With current COMEX Contracts outstanding at 123,000 contracts, the COMEX market has more than 619 Moz of silver under contract for which they have a total of just under 57 Moz to cover with.    It's not the highest number of contracts, but it may well be one of the larger margins in recent times.

      What makes this change interesting is that demand should be down this year because of the economy, yet the COMEX is not adding to it's registered amounts, rather people are apparently claiming physical silver to fulfill paper contracts.

      Registered stocks of silver were 62.6 Moz at the end of July 09, now are just under 57 Moz, a drop of 5.5 million ounces of silver.   Eligible silver meanwhile has risen from 55.4 Moz to 59.1 Moz.      It would seem that people want physical ownership over a paper ticket.

    (UPDATE 9-24-09) : Information released from COMEX today showed an additional 1.5Moz withdrawl, this time from the eligible side of the mark.    What is especially interesting is an "adjustment" of 651,000 ounces from Eligible reserves to Registered reserves at HSBC Bank in New York.    That boosted Registered amounts back above the 50% mark.     Another interesting note is that daily delivery notices spiked on the 23rd by 117, more than half the 222 that had been recieved up to that date.   Since 9/1/09, 339 delivery notices have been recieved for COMEX silver.

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  • Boot
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    Nice digging Mr. Zimmer. Thanks
    23 Sep 2009, 10:52 AM Reply Like
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