Put the following in context. April is NOT a delivery month for silver, so 10 Moz withdrawals from COMEX stockpiles in just five days is highly unusual. A million or so ounces for the entire month is more normal. During a delivery month, you might have 15 Moz delivered and five of six million of that actually removed from stockpiles, but this silver is all LEAVING the actual stockpiles. Meanwhile the silver price gets slammed for 60 cents, or 5% losses on Monday. COMEX is the last remaining significant (and supposedly available) silver bullion stockpile on the planet. Possible reasons for the withdrawal include:
1. fear of confiscation. These stockpiles are highly visible targets for a government which has no silver any more in its strategic stockpile. I might add that this government has a history of confiscation and skullduggery.
2. industrial consumption: Since actual physical silver is scarce, industrial consumers, rather than speculators, may be the most recent buyers of COMEX
futures contracts and these guys are taking delivery and then removing the metal to meet silver raw material demands in their factories.
3. Both 1, and 2, may be in play. The severe shortages of small investment grade bars, which sell at a premium on mainstreet makes it economic to take delivery of large COMEX 1000 ounce bars and recast them into the more desireable small bars. This investment demand is siphoning silver away from industrial consumers, used to buying silver for less than $15, and forcing them into the CRIMEX to take delivery. You must be aware that although industrial demand has fallen with the recession, investor demand has increased to fill that space. The net result is a growing shortage of physical silver which is going begging because the spot price has been manipulated so low. The mines get the rigged spot price for their output, so why bother increasing output? Actually, because 78% of silver production is a by-product of imploding base metal production, the recession has aggravated an already tight silver market.
Of course in a financial system ruled by derivatives, none of the above has the least affect on the spot price! In a microcosm, the travesty that is the silver market illustrates the folly and fraud that pervades Western Society.