COMEX Warehouse Stocks Jan 27, 2011

SILVER

ZERO ozs withdrawn from the dealer’s (registered) inventory
156,749 ozs withdrawn from the customer (eligible) inventory
Total dealer inventory 43.96 Mozs
Total customer inventory 60.72 Mozs
Combined Total 104.68 Mozs

GOLD

ZERO ozs withdrawn from the dealers (registered) category
29,631 ozs deposited in the customer (eligible) category
Total dealer inventory 2.96 Mozs
Total customer inventory 8.63 Mozs
Combined Total 11.59 Mozs

There were 30 Kozs of gold deposited in the customer inventory. There were 0.16 Mozs of silver withdrawn from the customer inventory. There were 0.28 Mozs transferred from the dealer inventory to the customer inventory by way of an internal "adjustment". The dealer inventory is dangerously low at 43.9 Mozs.

There were 9 delivery notices issued in the JAN gold contract. The JAN gold delivery notice total for the month is 704 notices or 70,400 ozs.

There were 53 delivery notice issued in the JAN silver contract. The JAN silver delivery notice total for the month is 769 or 3.85 Mozs.

The open interest in JAN gold is 13 contracts and in JAN silver it is 101 contracts. There clearly will be no delivery concerns for this month. The next big delivery threats for the cartel are FEB gold and MAR silver. The huge OI in FEB gold decreased by a by 47,776 contracts to 99,036 contracts. While this has significantly contracted this still represents 9.9 Mozs and there is only one day left before first notice day. The silver MAR open interest only decreased by 821 contracts to 66,113 contracts. Silver OI for MAR has stubbornly refused to significantly reduce and still represents 330 Mozs. The gold total OI declined by 15,425 contracts to 491,222 and in silver it decreased 1,008 contracts to124,221 contracts. In a sign of high frequency trading being used to flush the weak longs the volume in the FEB gold contract exceeded open interest in FEB gold for a third day! The volume was 182,431 contracts while open interest was 99,036.

More than 30,000 options were exercised yesterday with even out-of-money options being exercised of strikes at $1335, $1340 and $1345. This is a sign of investors wanting to stand for delivery. The large open interest which is still open in FEB was no doubt the reason for the vicious attack today (the reason why silver suffered relatively little by comparison). Tomorrow is the last trading day before First Notice day so it will be an interesting day and will give an indication of the FEB gold delivery problem for the cartel.
Cheers
Adrian