COMEX Warehouse Stocks July 28, 2010

SILVER

20,970 ozs withdrawn from the dealer’s (registered) inventory
223,148 ozs deposited in the customer (eligible) inventory
Total dealer inventory 52.43 Mozs
Total customer inventory 58.12 Mozs
Combined Total 110.55 Mozs

GOLD

96,592 ozs withdrawn from the dealers (registered) category
3,119 ozs deposited in the customer (eligible) category
Total dealer inventory 2.58 Mozs
Total customer inventory 8.51 Mozs
Combined Total 11.09 Mozs

There was a sizeable withdrawal of gold from the dealer inventory of 96,592 ozs while 3,119 ozs were deposited in the customer inventory. The withdrawal from the dealer inventory is comparable to the 89,400 ozs of gold standing for delivery in the JUL contract so perhaps this is squaring the delivery for the month which was very low in any case. It might be a very different story for August (see below)! In silver 21Kozs were withdrawn from the dealer inventory and 0.22Mozs were deposited in the customer inventory. There were also 0.13Mozs that moved from the dealers’ inventory to the customer inventory by way of an internal adjustment.

There were 56 delivery notices issued in the JUL gold contract. The JUL gold delivery notice total for the month is 894 notices or 89,400ozs.

There were 68 delivery notices issued in the JUL silver contract. The total delivery notices for the month in silver stand at 2364 or 11.8 Mozs.

The open interest in the JUL silver contract stands at 111 contracts or 0.6 Mozs. This open interest along with the issued delivery notices gives the potential standing for delivery of 12.4 Mozs which is 24% of the dealer inventory.

The Open Interest in the AUG contract only declined 9,680 to stand at 112,977 contracts. This is quite astonishing considering how hard gold was hit yesterday. This is 11.3 Mozs. This is usually large for this time of the month. First notice day is July 30 by which time these contracts need to be rolled, sold or fully paid for if they are standing for delivery. This could be a clue that there will be a large amount of contracts standing for delivery. What is also of note is that gold moved into ZERO contango between July, August and September in that all three contracts settled at $1160.4. That is suggesting growing physical market stress. Very little gold ever moves in or out of the Comex so the withdrawal of 96Kozs is quite large by recent standards. Is this a delivery against all outstanding JUL notices to try to give the impression that there is no shortage to make a smoke screen that might dissuade some of the AUG holders from standing for delivery? If there is a hint of a shortage they will be more motivated to stand for delivery. If so this is a pathetic snow job, but considering how little gold ever moves it certainly is a heck of a coincidence that the movement is similar to the outstanding notices.
Cheers
Adrian