COMEX Warehouse Stocks May 25, 2010

SILVER

ZERO ozs withdrawn from the dealer’s (registered) inventory
614,645 ozs deposited in the customer (eligible) inventory
Total dealer inventory 52.60 Mozs
Total customer inventory 65.46 Mozs
Combined Total 118.06 Mozs

GOLD

ZERO ozs withdrawn from the dealers (registered) category
96 ozs withdrawn from the customer (eligible) category
Total dealer inventory 2.62 Mozs
Total customer inventory 7.98 Mozs
Combined Total 10.60 Mozs

There was almost no external movement of gold into or out of the Comex warehouse. However, there was a large internal “adjustment” which made a ledger transfer of 119,275 ozs from the customer inventory to the dealer inventory. Is this the dealers leasing gold from customers in anticipation of large deliveries in the June contract?

In silver there were 0.61 Mozs of silver deposited in the customer inventory. The customer inventory is steadily increasing but the dealer inventory is not. There are 21 Mozs in delivery notices that have been issued this month and there is not indication any significant amount of silver has left the Comex. There appears to be smoke coming out of the Comex with respect to silver inventory.

There were 16 delivery notices issued in the MAY gold contract. The MAY gold delivery notice total for the month is 2,044 notices or 204,400 ozs.

There were 26 delivery notices issued in the MAY silver contract. The total delivery notices for the month in silver stand at 4,199 or 21 Mozs.

There is 0.5 cents of contango in silver MAY/JUN and 1.8 cents MAY/JUL. In gold there is $0.2 contango MAY/JUN and $0.9 MAY/JUL.

The open interest in silver for the MAY contract declined to 47 contracts. This is 0.3 Mozs which coupled with the already issued delivery notices puts the total likely demand for silver delivery for the month at 21.3 Mozs. That represents 40% of the dealer inventory of approximately 52.6 Mozs.

There is a massive open interest in JUN gold of 202,208 contracts. There is only one trading day left before this is the front month. It will be interesting to see how much of this stands for delivery. This currently represents 20 million ozs which is exactly 10 times what the dealers have in their inventory! If the dealers do not get significant rolling they are in deep trouble.
Cheers
Adrian