UnidoRecruitingNATIONAL

  • Subscribe to our RSS feed.
  • Twitter
  • StumbleUpon
  • Reddit
  • Facebook
  • Digg

Wednesday, 17 April 2013

COMEX Default Looming?

Posted on 15:03 by Unknown
The latest articles say that the LBMA, COMEX are going to default in the next few weeks. What is all this fuss about?

Apparently the open interest in silver is at record highs while the silver price is dropping. This is not normal because normally the open interest should decline. But let's first ask ourselves, what is open interest?

Open interest is the total number of options and futures contracts that are not closed on a particular day. If someone opens a call on silver on the futures market, then open interest increases by 1. If open interest is increasing at a rapid pace, that means there are a lot of traders on the futures market making calls (long) and puts (short).

The key metric to watch here is the following:
When open interest is increasing, it means that the price trend in silver will keep going up/down.
When open interest is decreasing, it means that the price trend in silver will reverse the trend.

So what do we have here? We have an increasing open interest in silver, with a declining silver price. That means the drop in silver price is likely to keep going lower as shorts are creating more and more short positions. Once the open interest trend changes, then we will see a reversal in the silver market to the upside.

Chart 1: Silver Open Intrest

So we have a huge battle in the market with a huge increase in short sellers. That increase in open interest is also found in the total stock at COMEX silver (Chart 2). You see the total stock in green is at record highs, while the real physical available silver in blue is not increasing. How can it be that we have so little physical silver in storage for delivery at the COMEX, while trading is so high? If somehow 10% of the longs start to ask for their silver delivery, the COMEX will default. And the chance of default will go up if the open interest keeps increasing. Keep watching the blue line (registered physical silver) as it goes down.

Chart 2: Silver COMEX

Email ThisBlogThis!Share to XShare to FacebookShare to Pinterest
Posted in COMEX, correlation, default, Interest, LBMA, open, silver | No comments
Newer Post Older Post Home

0 comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Popular Posts

  • GLD trust gold inflow?
    Looks like the media is telling us that the GLD trust physical gold holdings are rising and giving a boost to the precious metals prices. I ...
  • The Current Status on Precious Metals
    Let's do a quick analysis on precious metals here. First off, I said yesterday that China lost interest in gold during the past months i...
  • J.P. Morgan Converts Almost Half of Eligible Gold to Registered Gold
    I couldn't believe my eyes when I saw this. Suddenly we saw the J.P. Morgan vault get almost half of the eligible gold converted into re...
  • Correlation between Bonds and Gold
    Just to be sure that I have this picture (and correlation) logged onto this blog, here is the famous Zero Hedge bonds Vs. gold chart. Chart ...
  • Silver Inventories at CME and Lease Rates
    Just a few weeks after I turned bullish on silver , articles are sprouting out of nowhere about silver inventories being historically low . ...
  • Disconnect between selling price of physical silver and paper silver
    As the paper silver keeps falling (blue chart), some miners aren't willing to reduce their selling price (red chart) on their silver bul...
  • Diamonds: The Less Known Commodity: Olivut Resources
    Everyone is talking about gold and silver these days, but nobody talks about diamonds. Let's have a little peek inside this sector. Ther...
  • China May 2012 Gold Imports from Hong Kong Still in an Uptrend
    A little update on China's gold imports from Hong Kong. For May 2012, China imported 75.6 metric tons from Hong Kong . Pretty disappoint...
  • China Gold Imports Hit Record High
    An update on the China Gold Imports from Hong Kong has just been put out on Bloomberg . It is amazing, how much they are buying, imports mor...
  • China Construction Bank to Buy European Bank: RBS or Commerzbank?
    On 16 September 2012, China Construction Bank  (CCB) announced that it would use up to $15 billion dollars to buy a stake (30%-50% stake or ...

Categories

  • 10 (1)
  • 10 year treasuries (1)
  • 1987 (1)
  • 2012 (7)
  • 30 (1)
  • account (1)
  • acquisitions (1)
  • adjustable (1)
  • ADP (1)
  • Advantage (1)
  • aggregates (2)
  • AGQ (1)
  • agriculture (1)
  • Akamai Technologies (1)
  • alert (1)
  • Alex Jones (1)
  • Allan Meltzer (1)
  • Allana (1)
  • Allana Potash (1)
  • amber gold (1)
  • America (1)
  • and (2)
  • Angela (1)
  • APMEX (5)
  • applications (1)
  • April 2012 (1)
  • arbitrage (2)
  • Arthur (1)
  • asia (2)
  • Asian (1)
  • At. Augustine Gold (1)
  • Atlantic Economy Summit (1)
  • AUD (1)
  • Australian dollar (1)
  • automotive (2)
  • average (3)
  • Avino (1)
  • bac (2)
  • backing (1)
  • backwardation (6)
  • balance (8)
  • balance sheet (3)
  • Baltic (1)
  • Baltic Dry Index (1)
  • Bank (10)
  • Bank of America (1)
  • Bankrupt (1)
  • bankruptcy (2)
  • banks (3)
  • bar (1)
  • Barclays (1)
  • Bargain (1)
  • Barrick Gold (1)
  • base (1)
  • base money (1)
  • Bass (1)
  • BCS (1)
  • beleggerscompetitie (4)
  • Belgium (10)
  • Ben (3)
  • Ben Bernanke (4)
  • Bernanke (4)
  • Bernstein (1)
  • BHP (1)
  • bitcoin (8)
  • blog (1)
  • BNP (1)
  • bond (14)
  • bond yields (1)
  • bonds (33)
  • boom (1)
  • Brad Cooke (1)
  • Brazil (1)
  • brent (2)
  • Brink's (2)
  • brother (1)
  • BrotherJohnF (1)
  • bubble (2)
  • budget (2)
  • Budget Deficit (1)
  • Buffett (2)
  • building (2)
  • bullion (1)
  • bullish (1)
  • buyback (1)
  • buying (1)
  • c (1)
  • calculation (2)
  • Cambridge (1)
  • Canada (1)
  • Capacity (8)
  • Capacity Utilization (7)
  • Capesize (1)
  • capita (1)
  • Capstone Mining (1)
  • car crash (1)
  • Case-Shiller (1)
  • Casey (1)
  • Cash is Trash (1)
  • cattle (1)
  • ceiling (4)
  • celente (2)
  • cement (1)
  • central (2)
  • CFTC (3)
  • Chaudhary (1)
  • Chicago (2)
  • China (48)
  • China Construction Bank (1)
  • CHK (1)
  • chocolate (1)
  • Citigroup (2)
  • city (1)
  • claims (3)
  • CLF (1)
  • cliff (3)
  • CME (11)
  • cnbc (2)
  • CNT depository (1)
  • coal (2)
  • cocoa (1)
  • COFER (2)
  • coffee (1)
  • comedy (1)
  • COMEX (33)
  • commercial (1)
  • Commerzbank (1)
  • commodities (4)
  • commodity (1)
  • competition (1)
  • composition (1)
  • Conan (1)
  • Conference (2)
  • congress (1)
  • consumer (4)
  • consumption (2)
  • Contango (26)
  • contraction (1)
  • convention (1)
  • copper (34)
  • copper contango (1)
  • corn (2)
  • Corp (1)
  • correlation (54)
  • correlations (7)
  • cost (5)
  • costs (1)
  • COT (4)
  • cotton (1)
  • council (1)
  • country (2)
  • county (1)
  • cover (1)
  • CPI (5)
  • crash (2)
  • CRB (3)
  • credit (2)
  • Credit Agricole (1)
  • Croatia (1)
  • crude (3)
  • currency (3)
  • current (1)
  • curve (1)
  • Cut (1)
  • Cyprus (7)
  • Da (1)
  • daily (1)
  • Dan Norcini (1)
  • David (1)
  • David Morgan (2)
  • DB (1)
  • de-peg (1)
  • Debt (30)
  • debt ceiling (2)
  • debt limit (1)
  • December (1)
  • decoupling (7)
  • default (4)
  • deficit (7)
  • deflation (2)
  • delivery (1)
  • Demand (6)
  • Denmark (2)
  • Denninger (1)
  • deposit (8)
  • deposit facility (1)
  • deposits (3)
  • diamond (1)
  • Discouraged (1)
  • disposable (1)
  • dividend (1)
  • DJP (1)
  • DNC (1)
  • dollar (2)
  • domestic (1)
  • Doug (1)
  • Dow (7)
  • drop (1)
  • Dry (1)
  • durable (1)
  • dwcf (1)
  • earnings (4)
  • earnings per share (1)
  • ECB (6)
  • economy (1)
  • Ecuador (1)
  • elections (1)
  • electricity (2)
  • eligible (2)
  • Embry (1)
  • Employment (1)
  • Endeavour (1)
  • Endeavour Silver (2)
  • Engelhard (1)
  • eps (3)
  • equities (3)
  • equity (1)
  • equity markets (1)
  • Eric (6)
  • Eric Sprott (1)
  • estate (2)
  • estimate (1)
  • ETF (3)
  • Ethiopia (1)
  • Ethiopian Potash (1)
  • eur (1)
  • Eureka (1)
  • Euribor (2)
  • euro (8)
  • Europe (7)
  • European Union (1)
  • Eurozone (1)
  • exchange (1)
  • EXK (1)
  • expansion (1)
  • experiment (4)
  • exploration (1)
  • export (1)
  • exports (1)
  • Exposure (1)
  • external (1)
  • Faber (3)
  • family (1)
  • Faustian (1)
  • fed (2)
  • federal (10)
  • federal reserve (3)
  • Fertilizer (1)
  • Financial Services Committee (1)
  • First (3)
  • First Majestic Silver Corp. (1)
  • fiscal (3)
  • fiscal cliff (1)
  • fixed (1)
  • food stamps (1)
  • food stamps hire people (1)
  • foreigners (4)
  • forex (1)
  • Forum (1)
  • forward (1)
  • franc (1)
  • France (3)
  • Fraser (1)
  • French (1)
  • fund (1)
  • funds (3)
  • gas (1)
  • Gazprom (1)
  • gdp (25)
  • George Soros (1)
  • Germany (3)
  • gld (3)
  • GNP (1)
  • GOFO (4)
  • Gold (130)
  • gold money index (1)
  • golden cross (1)
  • Goldman (1)
  • Goldman Sachs (2)
  • goldonomic (1)
  • goods (1)
  • got gold report (1)
  • government (2)
  • great (1)
  • Great Depression (2)
  • Greece (8)
  • Greg (1)
  • gross (1)
  • growth (1)
  • GS (1)
  • GSK (1)
  • Hampshire (1)
  • Hang Seng (1)
  • Happy New Year (1)
  • Hedge (1)
  • Hewlett Packard (1)
  • Hitler (1)
  • HMI (1)
  • holding (1)
  • holdings (4)
  • Hole (1)
  • Hollande (4)
  • home (1)
  • hong (7)
  • Hong Kong (11)
  • hour (4)
  • hourly (3)
  • Housing (8)
  • housing market index (1)
  • HSBC (1)
  • Hunter (1)
  • Hyperinflation (3)
  • IMF (1)
  • import (14)
  • imports (16)
  • income (1)
  • index (13)
  • India (1)
  • industrial (2)
  • industry (1)
  • inflatiion (1)
  • inflation (11)
  • iniflation (1)
  • initial (3)
  • initial claims (1)
  • initiative (1)
  • Insider (1)
  • insider trading (1)
  • institute (1)
  • interconnectivity (1)
  • Interest (9)
  • interest payment (1)
  • Interest Rates (1)
  • inventory (1)
  • investment (2)
  • Investor (1)
  • Iran (4)
  • Ireland (1)
  • Iron (2)
  • Iron ore (2)
  • Irwin (1)
  • Israel (2)
  • Italy (4)
  • J.P. Morgan (7)
  • J.P. Morgan Chase (1)
  • Jackson (1)
  • James (5)
  • James Turk (2)
  • Japan (10)
  • jesse jackson (1)
  • Jim (1)
  • Jim Rogers (1)
  • Jim Sinclair (1)
  • JNJ (1)
  • job cuts (1)
  • jobless (2)
  • John (3)
  • John Davis (1)
  • Jones (2)
  • JP Morgan (1)
  • jpm (1)
  • July (1)
  • June (2)
  • junk (3)
  • Karl (1)
  • keiser (2)
  • king world news (1)
  • Kohler (1)
  • kong (7)
  • KWN (2)
  • Kyle (1)
  • Kyle Bass (1)
  • laptop (1)
  • large commercial (1)
  • Las (1)
  • LBMA (3)
  • LCNS (9)
  • Lease (8)
  • Lease rate (3)
  • lease rates (2)
  • Lecture (1)
  • lending (1)
  • leverage (1)
  • Liberty (1)
  • LIBOR (3)
  • Lloyds (1)
  • LME (3)
  • Loans (1)
  • london (2)
  • long (1)
  • LTRO (3)
  • lumber (1)
  • M0 (1)
  • M1 (1)
  • M2 (1)
  • M3 (2)
  • Majestic (3)
  • Maloney (1)
  • manager (1)
  • manipulation (1)
  • Marc (3)
  • Marc Faber (11)
  • March (1)
  • margin (1)
  • marginal (4)
  • market (5)
  • Mastercard (1)
  • maturity (2)
  • Mauldin (1)
  • max (2)
  • max keiser (3)
  • May (1)
  • MBS (5)
  • Melvin (1)
  • merger (1)
  • Merkel (1)
  • metal (1)
  • metals (7)
  • Metdist (1)
  • MF global (1)
  • Michael (2)
  • Middle East (1)
  • Mike (1)
  • Mike Maloney (2)
  • miners (2)
  • mines (1)
  • Mining (4)
  • minister (1)
  • Mint (1)
  • monetary (1)
  • money (4)
  • Moneyshow (1)
  • monitoring (1)
  • Monitoring of decoupling (1)
  • Morgan (1)
  • Morgan Stanley (1)
  • mortgage (6)
  • Moustache (1)
  • moving average (1)
  • MZM (3)
  • natural (1)
  • Natural gas (3)
  • Neeraj (1)
  • Negative (3)
  • net (4)
  • Netherlands (2)
  • New (1)
  • News (1)
  • nickel (1)
  • Noel (1)
  • Nomura (2)
  • non farm payroll (1)
  • non-farm payroll (1)
  • NOS (1)
  • Novartis (1)
  • O'Brien (1)
  • obesity (1)
  • Occupy (1)
  • Offering (1)
  • oil (9)
  • oil embargo (1)
  • Okun (1)
  • olivut resources (1)
  • OLV (1)
  • Onion (1)
  • open (3)
  • orders (1)
  • ore (1)
  • outflow (1)
  • outlay (4)
  • outlays (1)
  • overnight (1)
  • P/B (1)
  • P/E (2)
  • palladium (4)
  • Pan American Silver (1)
  • Panamax (1)
  • paper (1)
  • Paulson (1)
  • payment (1)
  • payroll (3)
  • pegging (1)
  • pending (1)
  • Pentagon (1)
  • Pento (2)
  • permit (2)
  • personal (1)
  • Peter (13)
  • Peter Schiff (13)
  • petition (1)
  • Pfizer (1)
  • pharmaceutical (1)
  • phys (1)
  • physical (2)
  • piano (1)
  • PIIGS (6)
  • platinum (7)
  • PMI (11)
  • Ponzi (1)
  • Poor's (2)
  • population (1)
  • Portugal (3)
  • positions (3)
  • Potash (1)
  • Potemkin (1)
  • PPLT (1)
  • precious (4)
  • premium (25)
  • president (1)
  • Price (16)
  • private (1)
  • product (1)
  • production (7)
  • profit (1)
  • PSLV (5)
  • public (3)
  • purchasing (1)
  • QE (1)
  • QE3 (6)
  • radio (1)
  • rally (2)
  • rate (27)
  • rates (2)
  • ratio (11)
  • RBS (1)
  • real (4)
  • Real estate (4)
  • receipt (1)
  • recession (1)
  • recycling (1)
  • red (1)
  • referendum (1)
  • regions (1)
  • registered (3)
  • registered gold (1)
  • repatriation (1)
  • report (4)
  • requirement (1)
  • reserve (12)
  • reserve currency (1)
  • reserve requirement (1)
  • reserves (3)
  • Resource (1)
  • revenue (2)
  • revision (1)
  • revisions (1)
  • Rhodium (1)
  • Rickards (1)
  • RJA (1)
  • RMB (1)
  • Road (1)
  • Roche (1)
  • Royal Canadian Mint (1)
  • run (1)
  • Russia (2)
  • Sachs (1)
  • sales (1)
  • SAU (1)
  • Saudi Arabia (1)
  • Savings (5)
  • scheme (1)
  • Schiff (13)
  • Scott Minerd (1)
  • scrap (3)
  • second quarter (1)
  • sector (1)
  • securities (1)
  • Seminar (1)
  • sentiment (2)
  • SGS (1)
  • Shanghai (15)
  • share (1)
  • sheet (7)
  • SHIBOR (1)
  • short (6)
  • short positions (1)
  • shortage (2)
  • shorting (1)
  • Show (1)
  • Silva (1)
  • silver (90)
  • Silver glitch (1)
  • Silver Lake Resources (1)
  • Singapore (1)
  • single (1)
  • Sipef (1)
  • slv (3)
  • Societe general (1)
  • Soros (1)
  • soybean (1)
  • soybeans (1)
  • Spain (4)
  • Spain unemployment (1)
  • SpainC (1)
  • Spanish (1)
  • SPDR (1)
  • spending (2)
  • Spiegel (1)
  • SPPP (2)
  • SPR (1)
  • spread (1)
  • Sprott (14)
  • stand (1)
  • standard (3)
  • Standard and Poor's (5)
  • starts (1)
  • stimulus (2)
  • stock (19)
  • stocks (2)
  • strategic petroleum reserve (1)
  • Street (1)
  • stress (1)
  • Student (1)
  • sugar (1)
  • supply (5)
  • Supramax (1)
  • surplus (1)
  • surprise (1)
  • Swaps (1)
  • Swiss (2)
  • Switzerland (4)
  • takeover (1)
  • target (1)
  • tax (8)
  • taxation (1)
  • taxes (1)
  • Tekoa (1)
  • test (1)
  • testify (1)
  • The Real Crash (1)
  • Theory (2)
  • TLT (1)
  • total (4)
  • trade (1)
  • trade deficit (1)
  • transport (1)
  • treasuries (18)
  • treasury (10)
  • treasury holdings (2)
  • trust (3)
  • turbo (1)
  • Turk (5)
  • U.S. (21)
  • U.S. debt (1)
  • U.S. dollar (1)
  • U.S. Mint (2)
  • U.S. treasuries (1)
  • U.S. treasury holdings (1)
  • U3 (1)
  • U6 (1)
  • unemployment (17)
  • Unemployment rate (1)
  • united states (1)
  • up (1)
  • US (7)
  • USA (1)
  • USD (8)
  • Utilization (8)
  • Valcambi (1)
  • valuation (1)
  • Vegas (1)
  • velocity (5)
  • Visa (1)
  • volatility (1)
  • wage (3)
  • wages (1)
  • Wall (1)
  • Wall Street Journal (1)
  • War (3)
  • warehouse (1)
  • Warren (2)
  • wedge (1)
  • Western Potash (1)
  • wheat (2)
  • worker (1)
  • world (1)
  • World Market Window (1)
  • wrap (1)
  • WTI (1)
  • Yahoo (1)
  • year (2)
  • yen (2)
  • Yeul (1)
  • yield (11)
  • yields (2)
  • yuan (1)
  • zero (6)
  • Zero Hour (2)
  • Zero Hour Debt (1)
  • zerohedge (2)
  • zinc (1)

Blog Archive

  • ▼  2013 (243)
    • ►  August (7)
    • ►  July (14)
    • ►  June (34)
    • ►  May (23)
    • ▼  April (53)
      • J.P. Morgan Vault Doubles Registered Silver
      • U.S. GDP Growth Slowing Down, Sell Stocks
      • Bank Deposits Update
      • GDP Misses Expectations
      • COMEX Gold's Alarming Plunge in Inventory
      • Durable Goods Orders Vs. S&P
      • Is the gold there?
      • The U.S. Government Has Invented a New Way of Calc...
      • Dow Gold Ratio
      • Adjustable Rate Mortgage Vs. Federal Funds Rate
      • 30 Year Fixed Mortgage Rate Vs. 30 Year U.S. Treas...
      • Wage Inflation Vs. Unemployment Rate
      • Wage Inflation Vs. CPI
      • Initial Jobless Claims Vs. S&P
      • Why you shouldn't buy Japanese equities
      • Correlation: Gold Bottoms out on Marginal Cost of ...
      • Capacity Utilization Rate Vs. Consumer Price Index
      • Capacity Utilization Rate Vs. Unemployment
      • U.S. Federal Reserve Balance Sheet Vs. Dow Jones
      • Money Velocity Vs. Bond Yield
      • Gold Vs. 10 Year U.S. Bond Yield
      • GDP Vs. PMI
      • Dow Theory
      • China Gold Imports from H.K.
      • Large drop in COMEX gold, what does it mean?
      • Gold/Silver COMEX Stock
      • Correlation: Initial Unemployment Claims Vs. S&P
      • Correlation: Wage Inflation Vs. Unemployment Rate ...
      • Money Aggregates Climbing Again
      • COMEX Default Looming?
      • Copper Contango Theory: Copper Bottoming Out?
      • Bloomberg TV
      • Silver Premium Charts
      • China Boosts U.S. Treasury Holdings
      • Premiums on silver skyrocket
      • Gurufocus: Stock Valuation Chart
      • Correlation: Junk Silver Premium Vs. Silver Price
      • Buy Physical Gold at Discount to Spot Price
      • Precious Metals Break Resistance to the Downside
      • Whatever Goldman Sachs Says on Gold, Do The Opposite!
      • Shanghai Gold Premium Spike
      • Bitcoin and gold recouple
      • China Gold Imports from Hong Kong Double in Februa...
      • Japan got its inflation going
      • Update: Copper Contango Experiment
      • GDP Growth to be Flat Going Forward
      • Correlation: Bitcoin Vs. Silver
      • 150% Debt to GDP
      • The Significance of Japan's Bond Buying Program
      • Scrap Silver Premiums at Unprecedented Highs
      • Bitcoin and gold decouple
      • COMEX gold update: J.P. Morgan converts almost all...
      • PMI numbers suggest correction in the U.S. stock m...
    • ►  March (36)
    • ►  February (33)
    • ►  January (43)
  • ►  2012 (257)
    • ►  December (42)
    • ►  November (26)
    • ►  October (30)
    • ►  September (20)
    • ►  August (25)
    • ►  July (32)
    • ►  June (30)
    • ►  May (29)
    • ►  April (23)
Powered by Blogger.

About Me

Unknown
View my complete profile