Silver sees many contracts close on the last day

adminApril 30, 2023

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By SCHIFFGOLD

Silver: Latest Release Month

Silver has seen weak supply to begin activity in May. While this may be disconcerting to some fire seekers, there is a look underneath it shows that all is not well.

Figure: 1 The most recent monthly equivalent shipment volume

We can see the way silver went down, it started up and then went down to close before seeing the big fall on the last day relative to the last months (mostly of the period when the last date is moved).

Figure: 2

This drop is most noticeable under the contrast between blue and green.

Figure: 3 24-month delivery and first reading

So how much of a drop is this? In fact, this is the biggest drop since the start of Covid when deliveries began. On the last day, the May contract fell 66%! Although delivery volumes have been declining, there have been significant declines in closings. This is not a coincidence. Silver is flooding into the Comex warehouses, and stocks are running very thin.

It should be noted that most of these contracts did not change to the next month. 5,099 contracts closed yesterday, only 1,067 added to the July contract. This tends to keep these contract holders until the final closing date. Why? Mostly because they believed no take delivery.

Figure: 4 Drop to Close

How do we know they believed? It’s impossible… but let’s look at what May is like. Keep in mind that less than half of the contracts have been issued so far. However, the supply is limited. Even with the remaining 1,606 contracts pending, the total will reach $327M. This is the lowest estimate in 5 of the last 6 years.

Picture: 5 Notional Releases

Take a look at the following chart that shows the friction to get metal into the correct section for delivery. There was a lot of activity in early March, followed by regular flights, and then it turned into a group of classifications.

Okay – so we have bank failures (Republican First is down 36% today alone), a push to devalue the dollar and go public, and gold is on the horizon. to all-time highs. And the supply volume in silver was the lowest in May in years because of a big last-minute deal closing? Data can only be read, sometimes you need to read between the lines. This market is heavy! Will it break tomorrow? No (it’s still Saturday), but how many times can the Comex pull a rabbit out of its hat?

Picture: 6 New Moon Cycles

Household Accounts

Household accounts are quiet this month. On net, less than half of the contracts have been issued so far.

Image: 7 Home Accounting Practices

Silver: Next Delivery Month

May had a low silver month, but it seemed some contract holders yesterday didn’t want to wait until July to “believe” in a reversal. Open interest in the June contract rose 33% while May fell. It may not be a coincidence.

Picture: 8 Open Advanced Accounts

In general, June is now looking strong, just below the January contract.

Picture: 9 Count Down

The amount of light transmission has decreased significantly. Again, most likely because there is not enough metal to release. The blood is dry!

Image: 10 Previous Releases

The money market spread is going to move back down.

Figure: 11 Spot vs. Futures

Gold: The New Release Month

Gold is starting to look dull. This is not surprising since the gold game is still going on a new contract.

The most recent month-like delivery volume

Figure: 12 The most recent monthly equivalent shipment volume

This can be clearly seen in the chart below with the red bars carrying the most volume in the low months. In January and July, the contract opened the delivery period weaker than this month (937 and 698 vs 1,128) but there was a lot of work in the middle of the month. It is not surprising to see new contracts increased this month. Unlike silver, the Comex was unable to stabilize the supply market in gold. This is partly because there is less silver available and more demand in that market. Silver was stolen more than gold, but that has changed. JPMorgan had to retrench after using almost all of their Treasury stock to hedge gold shipments last month.

Figure: 13 24-month delivery and first reading

However, it is surprising that the gold production was not higher. With banking issues, gold near all-time highs, and dollar-depreciation talk, I expect the gold contract to perform more closely. As the chart below shows, this month is at the lower end of the range for low months.

Pictured: 14 Open Advanced Accounts

The May contract for gold is a low delivery month but there are big moves in 2020 and 2022 (right after the start of Covid and the Ukraine conflict).

Picture: 15 Notional Releases

House accounts are quiet at the moment with very few contracts coming online. This follows a very big month last month.

Image: 16 Home Accounting Jobs

As mentioned above, JPMorgan released a large amount of gold last month. These are the two major shifts shown below that move from the Fork to the Register. Then they get their Tokens back to replace the ones they lost. The generals are not able to recover the silver which is said to be going further in the supply stream than the gold. Gold is a very large market and the implications are greater if confidence is lost.

Picture: 17 New Moon Change

The net performance in gold can be seen below.

Image: 18 New Moon Cycles

Compare this to silver which has gone straight down and the investments are still being withdrawn.

Picture: 19 New Moon Change

Gold: Future Release Month

Looking ahead to June shows that there is gold in the middle of the pack. As mentioned in technical research, one of the most interesting aspects of the current price movement is that it did not come with an increase in open interest. This suggests that buying elsewhere may not be from the weak hands seen in future traders. This is further confirmed by the chart below which shows average open funds despite near-record prices.

Picture: 20 Account Opening Deals

Even in terms of the Register, June was slightly below average.

Image: 21 Count Down

Supply volume is still strong in the big months, but considering JPMorgan’s recent moves, stocks may thin out and contract holders start to “believe” in a reversal. This June is a good test of that theory.

Image: 22 Previous Releases

The market is still strong.

Image: 23 Spread

The stock market is very well managed, but with spreads that get wider each time the listing is made.

Figure: 24 Spot vs. Futures

Wrapping

The amount of contracts closed in silver is surprising. The differences continue to grow. Some complain that this data has been showing stress for over a year, without major breakouts or aggressive price moves (gold has never made an all-time high, nor is it even close to silver). That’s true, but these things take time.

Looking at this data reminds me of a story:

“How did you go bankrupt?” “It’s very slow at first, it’s very fast”

We are in a slow phase. In silver, we may be reaching a point where things will move faster. The boxes simply cannot hold the withdrawals that have been made. Down the line, a major event at the Comex could still be several months or even a few years away. I don’t want to have that much time though. The data suggests it’s faster than that. In any case, you don’t want to get stuck and want more gold and silver when things start to unravel.