April silver contract vault drain is 17%, nearly double the average. April Gold knocks out 21%.

April 22, 2024

++++++++++++++++ Silver

Activity on the April silver contract has wound down with about a week to contract expiry. Open interest as of Monday morning was nil at just 11 contracts. Unless there is a surge in activity ultimate deliveries will be little changed. That said, April will go down in the books as one of the largest vault drains for an inactive contract as deliveries now total 17% compared to the mean of 10%.

If the April contract is followed up by a strong May contract delivery, the dent in comex registered could be significant. Currently the May contract OI is 66,323 and is about 15% greater than the mean.

Open interest is 700% of registered silver with 6 days to first notice. That is much higher than the pre-SilverSqueeze era, but not as high as after the huge vault drain that occurred in late 2022 and early 2023. At this point in May of last year, OI was 1000% of registered.

+++++++++++++++ Gold

The April gold contract is still tacking on a few new contracts … 80 net new contracts on Friday. Deliveries to date are 21% of registered which is strong but not a blowout. The mean over the last 4 years is 17%.

Note that the gold drain is 17% for an active contract while silver has done 17% for an inactive month. There is much more registered gold relative to deliveries than silver, so gold contracts generally have more coverage. Why? Fiat’s price relative to gold is the whole enchilada and the cabal is more prepared to defend a fiat melt down relative to gold.

Looking ahead to the upcoming May contract, OI is 2,120 … essentially the average of prior year contracts:

Those 2,120 contracts amount to about 3% of registered. Most of the action on inactive gold contracts occurs after first delivery. Post first notice buying on inactive gold contracts doesn’t vary much from the active months … some inactive contracts are much larger than active month contracts. So, any fireworks would likely occur after first notice.

The net of all this … physical gold and silver demand at comex has been strong but not extreme … at least so far. That is consistent with the theory that physical demand is from the east. I wrote a piece a couple of weeks ago which showed that 85% of comex gold deliveries head out of registered.

+++++++++++++++++ Silver Vaults

The biggest supply nuisance in the recent past has been that HSBC “customer” account who has unloaded 24.8 million oz over the last 5 contracts with nearly all of it arriving from outside the vaults. Friday’s vault report had another truckload arrive at Asahi’s vault which is likely more HSBC metal. That likely means HSBC will be selling more metal on the May contract.

A additional 452 koz arrived at Brinks.

+++++++++++++++++ Gold Vaults

Quiet at the gold vaults: