The gift that keeps on giving. This is so unusual that I had to write about it again.
Recall that back in July, JPM suddenly had an interest in acquiring silver through the Comex. (I say "suddenly" because, prior to July, JPM had not been nearly this active in taking Comex deliveries. See for yourself here: https://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf)
For the July silver delivery month, JPM stopped 2,824 contracts into their house account. This represented 82% of the total for all of July. If you add in the 216 additional contracts they stopped into customer account, they took down 88.3% of all July silver deliveries.
Again and for perspective, for the prior three silver delivery months, the JPM house account stopped a total of 1,250 contracts. This was just 12.7% of the total Dec12, Mar13 and May13 deliveries of 9,864 contracts.
In gold, for Dec12, Feb13, Apr13 and Jun13, the Comex delivered a total of 37,824 contracts. During those past four delivery months, JPM stopped into their house account 2,162 contracts or 5.7%. If you add in the contracts stopped into the JPM customer account, the number rises to 4,230 or 11.2%.
Yesterday, there were 58 deliveries of the August Comex gold.
The JPM house account took 53 of them.
53!
Over the past six days, there have been 874 August deliveries made for 87,400 ounces or 2.718 metric tonnes. The JPM house account has stopped 827 of them for 82,700 ounces or 2.572 metric tonnes. Stated another way, over the past six days, JPM has absorbed for itself 94.62% of all August Comex gold deliveries.
For the month, 2836 contracts have been delivered.
The JPM house account has stopped 2,033 and JPM has also stopped 263 for their customers.
Thus, for the entire month, between its house account and its customer account, JPM has stopped 2,296 of the 2,836 deliveries. That's 81%.
So, let's put all of this back together....
- For the prior three silver delivery months, the JPM house account had accounted for just 12.7% of all Comex deliveries. In July, that number skyrocketed to 82%.
- For the prior four gold delivery months, the JPM house account had accounted for just 5.7% of all Comex deliveries. So far for August, that number has skyrocketed to 71.7%.
And finally today, chew on this for a moment. The total amount of Comex contracts delivered last December was just 3,253. In February, we all sat up and paid attention when the number soared to 13,070. This trend continued into April when the Comex delivered 11,632 and persisted into June when the Comex delivered 9,869. Yesterday was the 12th of August. After an initial surge of deliveries in the first two days of the month when over 2,000 contracts were delivered, as noted above only 874 contracts have been delivered over the past six days.
- Is August simply reverting back to a slow delivery month like December? The August contract still shows 1,577 in open interest (https://www.cmegroup.com/trading/metals/precious/gold_quotes_settlements_futures.html) though it's still possible for those seeking immediate delivery to "jump the queue", put up 100% margin, buy a contract and take delivery this month.
- Jumping the queue is not unprecedented, in fact it's a normal occurrence. For example, back in April 6,601 contracts initially stood for delivery. Yet the final delivery total was 11,632 (nearly a double). And in June we saw 4,946 standing on First Notice Day yet the delivered contract total reached 9,869 (again, nearly a double). August initially had 3,960 standing. The Comex has settled 2,836 and open interest is still 1,577 meaning 400 or so have jumped the queue so far this month and bought August gold for delivery after FND.
- What happens if, over the next few days, another 4,000-5,000 contracts suddenly appear for delivery? This would simply bring total August delivereis into line with Feb, April and June. What in the world would happen if this occurs again over the next two weeks?
- And if it does, what percentage of the total will JPM stop into their own accounts?
- And from where will all this gold come given that total Comex stocks are already dwindling?
We'll have our answers soon, I suppose. Rest assured, I'll be right here keeping track of everything and keeping you updated.
TF
