Gold Lease Rate Higher, Registered COMEX Gold Lower

Just another update.

Gold Lease Rates are at an all time high again:

Chart 1: Gold Lease Rate

COMEX registered gold has once declined to even lower levels. J.P. Morgan unloaded its registered gold. Total registered gold at COMEX now stands at: 875713 troy ounces. We are nearing the bottom.

Chart 2: COMEX gold

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COMEX stock touches new lows

And we have new lows this week. Total gold stock goes to 6989165 troy ounces.

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COMEX less than 1 million ounces physical gold left

We're getting closer to the zero line...

At this pace we will have the unthinkable "event" at the end of this month.

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Registered gold at COMEX at all time lows

A 30% drop in registered gold at the Brink's vault and a 15% drop in registered gold at Scotia Mocatta marks a huge total drop of more than 200000 ounces of gold at the COMEX.

We are on course for a total sell out in physical gold at the COMEX at the end of the summer. We also see this in the spiking gold lease rates and lower gold forward rates.

It is going to be interesting. What happens when the blue line intersects with zero? Any predictions?

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About Delivery Ratio and Cover Ratio at the COMEX

Interesting article by Jan Skoyles.
http://therealasset.co.uk/comex-2-paper-gold/

The summary says to us that the amount of gold bullion backing COMEX obligations is at an all time low (Cover Ratio). Meaning, there is very little gold backing at the COMEX.

If the delivery ratio (amount of delivered gold against contracts) ever spikes upwards, the COMEX could get under stress. Today, we are still fine, because people aren't really taking delivery as much as they should be.

Also notable is that registered stock is declining at a much faster pace than open interest (which is actually still very high). Such things cannot last, as this huge amount of leverage will blow up one day. You just can't trade contracts at this level without any physical backing of gold.

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COMEX gold another huge drop

Interesting article by Zerohedge:
http://www.zerohedge.com/news/2013-06-11/jpm-vault-gold-drops-284-overnight-slides-fresh-record-low-withdrawals-accelerate

As I indicated here, COMEX will run out of gold in August 2013.

The drop in gold stock is getting worse. Hold on to your belt. Once COMEX has a force majeure, the manipulation is over and the banks know this, as they are now net long in gold for the first time in history (since I monitored it).

If you want more info on the COT report, the slingshot effect and how banks are getting long, don't miss this Got Gold Report:

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COMEX to run out of gold in August 2013

At this rate, the COMEX will run out of deliverable gold on 14 August 2013.

Yes, that's only 2 months from now!

You decide what will happen when people can't redeem their physical gold and instead get a paper settlement.

David Morgan explains how little physical gold there is in the COMEX (scroll to 12:00).

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COMEX not to be trusted?

While updating my COMEX charts I found something odd.

"The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only.

For questions regarding this report please email Registrar@cmegroup.com or call (312) 341-3370."

I wonder why they put that in their reports...

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J.P. Morgan Vault Doubles Registered Silver

I think this is very significant. J.P. Morgan's vault just recorded a doubling in registered silver coming from eligible silver.

You know what that means, allocation of silver, which means someone wants delivery. Open interest will start to come down with the decline in total silver stock.

Be prepared for the reversal in silver price.

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COMEX Gold's Alarming Plunge in Inventory

Today we see a quite alarming drop in the COMEX gold stock. Do you see how the total gold stock (green chart) is plunging? Do you see how the registered gold (blue chart) is disappearing?

I know the COMEX can't default, but we will see cash settlements for gold deliveries like never before. If we see the trend going further down at this rate, you won't get your physical gold, I can assure you that.

Silver open interest is still rising with higher stock. I don't expect a reversal yet in the silver price down trend, but I see signs of a topping out.

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Large drop in COMEX gold, what does it mean?

Tekoa Da Silva notices, just like me here, that COMEX gold stock is declining rapidly lately.

We don't know what it means, but one of the theories is the COMEX default. Which is what happens when the downtrend keeps going on like this.

Chart 1: Comex Gold

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Gold/Silver COMEX Stock

This page is used to monitor the gold and silver stock at the COMEX.

As total gold stock decreases, open interest decreases too. I expect a reversal in the gold price down trend.

Silver open interest and total stock has started to top out, I expect a silver reversal in the coming months.

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COMEX Default Looming?

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

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COMEX gold update: J.P. Morgan converts almost all of eligible gold to registered gold

And again, over the weekend, J.P. Morgan converted its eligible gold into registered gold. I predict that we will see the total gold stock decline once again as a rise in registered gold means people will take delivery.

J.P. Morgan has now almost converted all of its eligible gold into registered gold.

Chart 1: Gold Stock COMEX

On the silver stock, we don't see anything significant happen yet.

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COMEX Gold Data Update

This is what incomplete COMEX gold stock data looks like after a laptop crash.

Nevertheless you can see that total gold stock is declining very rapidly and the most important of all, it is a real trend changer. Look at how soft the curve was before and suddenly everyone takes their gold back starting from 2013.

I think we are in for a rally. Especiallly in silver, where open interest is still very high.

Chart 1: Comex Gold

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COMEX gold and silver update

I have a small warning here for the COMEX stock.

I predicted that the total gold stock would come down here. That's because I saw a very high surge in registered gold from J.P. Morgan's vault. And several months later the total gold stock hit new lows (Chart 1).

There is a tight gold market right now, as we see lease rates go above 0%. GOFO rates are still at record lows and premiums are highest ever. APMEX premium on silver coins just went to the highest level on Friday, namely 18%.

Chart 1: COMEX gold

A new thing has happened now in the silver COMEX stock. For the first time this year, we see the eligible silver stock go down. I also see that the registered silver went up, probably the same that has happened with gold. So I expect that total silver will now start to go down and we will see tightness in the silver market. We also see that the commercial shorts have finally covered their shorts.

Chart 2: COMEX silver

The future is again bright for precious metals...

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The Leverage in COMEX Silver is about to Explode

Why is the eligible silver going up at such high pace and open interest going up at the same time?

As I told people before, eligible silver is not allocated. People think they own it, but it is not available for delivery. The ratio of registered to eligible is now: 29.7%. Down from 33% the last time I looked.

As this ratio between registered and eligible goes down, the leverage is going up and up. And when this leverage breaks (due to a short squeeze), the non-eligible supply of smaller bars and coins is going to disappear in front of you.

Chart 1: COMEX Silver

People know this, and as a result are buying physical silver in record quantities. The U.S. Mint just sold a never seen record of 3.37 million ounces in February 2013.

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Total Gold Stock at COMEX hits new low

As predicted here, the total gold stock plunged to the lowest stock level since I monitored the COMEX, namely: 10676012 troy ounces.

This was of course obvious when J.P. Morgan swapped eligible gold into registered gold a few weeks ago. Total stock at J.P. Morgan vault hit a low of under 2 million troy ounces.

(Probably Soros is selling his GLD and now taking delivery...)

Chart 1: Gold COMEX

On the silver front we still see a huge increase in stock (and therefore also increase in open interest) (Chart 2).

Chart 2: Silver COMEX

It's surprising to see this huge divergence between silver and gold. I don't know what it means...

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Eligible Silver Spiking Upwards

Something must be wrong here. Why is eligible silver rising at such a high pace, while registered silver doesn't budge? This trend can't last...

Is it because shorts can't get out?

Chart 1: COMEX Silver Stock

If we look at the premiums on APMEX, we get this. 12% and 16%, which are pretty high premiums lately.

Chart 2: APMEX 100+ silver coin premium

Chart 3: APMEX 1-19 silver coin premium

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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 registered gold.

I have seen this before... I think someone wants delivery. Let me do some research on this...

Edit: Yes indeed, we saw J.P. Morgan do the same with silver a year ago here in November 2011 (right before a huge rise in silver price). The consensus was that they are preparing for a large delivery to someone. They increased registered stock to prevent a COMEX default. This is also a sign of loss of confidence in paper gold and silver.

Let's see what happens next, probably a decline in total stock.

Chart 1: Gold Stock COMEX

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