by Peter Schiff, Schiff Gold:
Silver: Recent Delivery Month
The big action in silver occurred early in the month, making March a pretty large outlier. First, it continues the recent trend of increasing deliveries. Second, deliveries were 8.7% of the max open interest for the month. This is the highest percentage since July 2020 when prices took off. There are still 24 open interest contracts remaining.
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Figure: 1 Recent like-month delivery volume
In terms of net new contracts, the latest month has actually surpassed the figure from September 2019 and stands well above any recent month.
Figure: 2 24-month delivery and first notice
Looking at the cumulative value shows the big spike up earlier in the month. Even though the trend flattened, there were still steady increases in contracts opened mid-month.
Figure: 3 Cumulative Net New Contracts
The appetite within the BofA house account took more than the combined outflow of all the other house accounts. BofA continued to increase deliveries throughout the month, having another 200+ deliveries since the mid-month report.
Figure: 4 House Account Activity
This March was unable to take out the March last year, but that should come as no surprise because that was when the market fell under intense pressure from the Reddit squeeze. Coming so close to last year shows the market is seeing strong physical demand even without the focused retail attention.
Figure: 5 Notional Deliveries
Silver: Next Delivery Month
The April contract has finally come to life in the final days, jumping upwards by more than 300 contracts.
Figure: 6 Open Interest Countdown
The spike up mirrors what was seen right before the February contract rolled. As shown in the chart below, February was a decently strong month given that it fell between another minor month and the major month of March.
Most impressive about February was that deliveries represented 232.4% of max open interest for the month. Could April have a similar mid-month surge that has become normal place recently?
Figure: 7 Historical Deliveries
Gold: Recent Delivery Month
Gold continues to show trend deviations. The largest minor month on record has continued to increase in recent days. It sits well above any minor month and exceeded Nov 2020 by more than 600 contracts.
Figure: 8 Recent like-month delivery volume
The chart below shows the day before First Position (blue bar) and then the day of First Position (green bar). As shown, one thing is very clear, the roll into close has gotten much smaller since the start of Covid. This means that more people are holding on and taking delivery instead of rolling at the last minute.
