0 3 min 11 mths


by Peter Schiff, Schiff Gold:

This analysis focuses on gold and silver physical delivery on the Comex. See the article What is the Comex for more detail.

Silver: Recent Delivery Month

Silver is wrapping up December which saw the highest delivery volume since the Reddit Silver Squeeze in March. At 8,847, this month will probably come in slightly below last December, even with 330 contracts outstanding. Regardless, December reversed a downward trend that has been in place since last July except for March (see declining bars below).

TRUTH LIVES on at https://sgtreport.tv/

It will take a few months into 2022 to determine if this is truly a change in trend or simply an anomaly.

Figure: 1 Recent like-month delivery volume

The chart below shows another interesting data point. As the contract nears First Notice, open interest starts to dive. The final day typically shows the biggest drop in open interest. This can be seen below as the difference between the blue and green bars.

As shown, in the latest month, the dive on the final day was relatively small compared to what was seen in July and September. Even last December saw quite a substantial fall from 16k to 9.4k. This year the drop was from 13.5k to 9.4k.

Figure: 2 24-month delivery and first notice

The green bars above represent the open interest on First Position which is typically a good predictor of the delivery volume for the month. This is when contracts need to post 100% cash. After First Position, contracts can still cash-settle, or contracts can open and stand for immediate delivery (red bars above). This December actually had slightly higher contracts on First Position than last December, but rather than seeing contracts opened for delivery, this month has seen more contracts cash settle.

In the minor months, there has been significant volume of contracts opening after First Notice. The major months follow a different trend. The chart below shows the major silver months cumulative new contracts after First Position. July suspiciously saw a massive number of contracts cash settle, and this December is now showing the second-biggest cash-settled contracts. The trend has turned in recent days though and it’s starting to move up. With about 5 days to go, it could still turn positive, but only July 2020 saw such an extreme reversal. Currently, 307 contracts have cash-settled.

Figure: 3 Net New Contracts

From a historical perspective, this December was the second-largest December on record. Below shows the notional (dollar) value of contracts delivered. With 363 contracts still open, this month will most likely exceed $1B of silver delivered!

Read More @ SchiffGold.com


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *