Market Curiosity: Exploring Markets And Systems

March 3, 2011

Silver update – March 3 – SIFO is interesting, CORRECTION to 2008 & 2011 SIFO comparison chart.

Filed under: Just Watching — Tags: , , , , , — Jeff Fitzmyers @ 12:01 pm

Ed Steer: The CME’s Daily Delivery Report was a big surprise again yesterday…as the thought of zero deliveries in both gold and silver was not a scenario that ever entered my mind…but that’s what the report showed. I don’t remember a delivery report like this…ever. What is going on under the hood of the silver and gold market is starting to make me nervous.

Harvey Organ says, There was a huge deposit of silver into the customer of 1,217,844 oz… The comex folk notified us that a miniscule 9 contracts (45000 oz) were served upon our longs today. This is the third straight day that the deliveries have been tiny which [could] indicate that the vaults are empty of silver metal. The total number of notices served thus far total 303 for a total of 1,515,000 oz of silver. To obtain what is left to be served, I take the OI of March at 2251 and subtract out 9 deliveries to give me 2242 notices or 11,210,000 oz to be served upon.Thus the total number of oz standing (ex the cash settlements) is as follows:1,515,000 (oz already served) + 11,210,000 oz (to be served) = 12,725,000 oz… we have lost approximately 8.4 million oz to cash settlements these past two days.

If I understand Mr Organ correctly, about 40% of deliveries are being settled via cash, and likely with premiums. And it will be interesting to see if the 1.2 moz of silver translates into about 240 deliveries tomorrow. If so, that could mean COMEX does not have much silver available at around 34.50 $/oz.

Jim Willie covers all the bases quickly: Bang Bang, Maxwell Silver Hammer

Interesting development with LBMA SIFO. Overall, SIFO is decreasing, but the 12 month is firmly below the other months.

2008 LBMA SIFO for reference. 12 month SIFO was above all other months almost all the time.

2008 and 2011 SIFO compared. I like this data presentation best so far. A similar price rise for 2011 targets 38 $/oz. (Apologies, I had incorrect calculations on past iterations of this chart and the speculations from those charts. I retroactively added this chart to most past posts.) The point is 2011 silver is tracking 2008 silver and if it continues, it could keep rising for 10 more days with only minor corrections.

COMEX backwardation shows $1.06/oz difference between the front month and December 2015 and a slight contango until July 2011. No real change from yesterday.

References
+ The obvious and GARGANTUAN silver opportunity
+ Surveying the playing field: fortunes can be made or lost in the next month or so, and sent to PCH 🙂
+ Silver update for March 2, slightly more LBMA backwardation, slightly less at the COMEX, and scarcity reports continue.
+ LBMA current stats

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