Maximo Martin Martin

COMEX silver inventories continue to fall Right now there are about 102 million ounces of silver that can actually be delivered against futures contracts. That is the registered silver. Against that sits roughly 366 million ounces of open interest in the March contract. If every holder demanded physical delivery, the gap would be 264 million ounces. That never happens in practice because positions are closed or rolled. The March contract is fascinating to watch. Over the past 24 hours, open interest dropped by 2,943 contracts of 5,000 ounces each. That is 15 million ounces coming out of March. This happens when longs and shorts close or roll positions. The roll was clearly visible, because 3,589 new contracts were opened in May. That equals about 18 million ounces shifting into the May contract. At a pace of roughly 15 million ounces per day coming off the March contract, it would take about 18 trading days for open interest to fall to a level that could be covered by the current registered inventory. Eighteen trading days from today takes us to March 6. First Notice Day for the March contract is February 27 and last trading day is March 27. Shorts decide when to issue a delivery notice. The CME clearinghouse then assigns that delivery to clearing members with long positions. Within those brokers, delivery is allocated to clients holding longs. This is not the whole story. Silver can still move into COMEX vaults or be reclassified from eligible to registered. But the trend in registered silver is down. Perhaps the strongest point of all: even after the silver crash more than a week ago, that downward trend did not stop. That tells you everything.