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Bumble

Silver being accumulated by a whale

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1 hour ago, Bumble said:

There is an interesting recent article by Alasdair Macleod of Goldmoney in which he makes a case for believing that there is a whale accumulating large quantities of silver via futures contracts. He speculates that it is the PBOC securing a supply of silver for China.

If there was even a whiff of a whale buying silver the traders would be all over it like a rash and the silver price would sky rocket.

The fact that the price is doing bugger all, says everything.  

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Perhaps this is the start of it, the price will follow hunt brothers style. Banks are purchasing record amounts of gold it wouldn't surprise me if silver is on the buy list too, they see whats coming.

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Silver has to go up at some point anyway. As PM investors/stackers, I think central banks accumulating gold at the current rate is one of the best future bull market indicators you could have.  If it's China accumulating silver then that's great news but I need more proof.

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On 13/07/2019 at 14:38, HighlandTiger said:

If there was even a whiff of a whale buying silver the traders would be all over it like a rash and the silver price would sky rocket.

The fact that the price is doing bugger all, says everything.  

If that were true then JP morgan accumulating more than 500 million ounces would have triggered that. There are some big players accumulating...

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6 hours ago, STONE said:

If that were true then JP morgan accumulating more than 500 million ounces would have triggered that. There are some big players accumulating...

Not sure where you get the 500 million from. The latest figures have JP Morgan on 150 million accumulated over the last 8 years or so. But there is a vast difference from a private company buying silver and the second largest economy in the world hoarding silver. 

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Ted is just using the COT info to argue his point, the information is verify-able

if we follow the sensational story, the expectation just did not happen...the analysis would be wrong and they are far from factual

Hunt brothers did not corner silver market they were the victims of market regulation, liquidation only

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4 hours ago, vand said:

You can't even take delivery of physical on futures contracts.

It could literally be anyone...Maybe JPM are unwinding their paper shorts and bringing their stockpile of physical into play. 

Unless silver is unlike any other commodity, you can take delivery of any futures contract.  It's what drives the market towards the end of the contract.  Not sure what they're trading if you can't take delivery.

 

(I was a commercial commodities trader for eleven years)

Edited by Branman1986

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Following last Thursday’s article on silver (A whale is accumulating silver futures), Ted Butler, an analyst who specifically follows silver futures on Comex, responded in an article posted on Silverseek.com, entitled “Wrong Whale”.

I have decided I must refute his allegation that what I wrote is factually incorrect. The problem right from the start is there are very few facts to go on, something which I made clear in my article. In the absence of hard facts, it therefore amounts to one conspiracy theorist’s view against another’s. The difference is that in my article, for the avoidance of doubt I clearly admitted this role for myself while Butler does not.

https://www.goldmoney.com/research/goldmoney-insights/refuting-ted-butler-s-criticism?gmrefcode=gata

Refuting Ted Butler’s criticism

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6 hours ago, Branman1986 said:

Not sure what they're trading if you can't take delivery.

(I was a commercial commodities trader for eleven years)

They are trading an fictional price of silver. When the open interest is vastly in excess of the deliverable silver - they cannot be trading physical silver.

The current open interest silver contracts according to the most recent COT report is 218,493. So that is 5000 x 218,493 ounces = 1.092 billion ounces.

At the moment the registered (deliverable) silver in the COMEX warehouses is 92,592,645 oz 

So there are almost 12 x more silver long positions than there is silver available to deliver. There is zero chance more than a fraction of this would be 'allowed' to be delivered. 

Edited by sixgun

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You can either close the position and roll it to a future contract to book out and stay long, or you take delivery.  There is no other option.

 

Those long positions are spread across many different contract delivery dates.  Could be years to decades out.

Edited by Branman1986

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I'm not a great fan of the guy, but I remember that Gerald Celente was saying not so long ago that it had been impossible to take delivery of physical on Comex contracts for the last few years and contracts were being settled in cash.

 

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The foundation of all commodities futures trading is the production/supply side and purchasing/taking-delivery side.  There is no market without them.  You can buy and sell to your hearts content before the contract month is up, but if you can't either produce or take delivery, you have to close out your position(or buy/sell to roll to a new delivery date).  Every ounce/kilo/ton/bushel/etc left gets scheduled for delivery.  Every commodity trading company has employees whose sole job is to schedule the chains of buys and sells, most of which financially book-out (a buy and sell to and from the same company), but the rest are chains of buys and sells that start with production and end with physical delivery.  For example, a physical chain may look like:  A random silver mining company - Morgan Stanley - Merrill Lynch - JP Morgan - Koch - Cargill - A random manufacturing company that uses silver.  A book-out would look like JP Morgan - Merrill Lynch - JP Morgan, or JP Morgan - Merill - Koch - JP Morgan.  Every buy and sell lies somewhere on these chains.  Don't confuse these with ETFs.

If you wanted to take delivery:

 

https://www.cmegroup.com/education/courses/introduction-to-precious-metals/what-is-the-precious-metals-delivery-process.html

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On 17/07/2019 at 10:42, Branman1986 said:

The foundation of all commodities futures trading is the production/supply side and purchasing/taking-delivery side.  There is no market without them.  You can buy and sell to your hearts content before the contract month is up, but if you can't either produce or take delivery, you have to close out your position(or buy/sell to roll to a new delivery date).  Every ounce/kilo/ton/bushel/etc left gets scheduled for delivery.  Every commodity trading company has employees whose sole job is to schedule the chains of buys and sells, most of which financially book-out (a buy and sell to and from the same company), but the rest are chains of buys and sells that start with production and end with physical delivery.  For example, a physical chain may look like:  A random silver mining company - Morgan Stanley - Merrill Lynch - JP Morgan - Koch - Cargill - A random manufacturing company that uses silver.  A book-out would look like JP Morgan - Merrill Lynch - JP Morgan, or JP Morgan - Merill - Koch - JP Morgan.  Every buy and sell lies somewhere on these chains.  Don't confuse these with ETFs.

If you wanted to take delivery:

 

https://www.cmegroup.com/education/courses/introduction-to-precious-metals/what-is-the-precious-metals-delivery-process.html

 

This is a genuine question.. I'm not trolling.. then why don't silver investors simply buy futures contracts or mini-contracts and wait for settlement to acquire their physical at essentially spot price, instead of paying a premium via the silver dealers?

 

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On 13/07/2019 at 19:07, Bumble said:

There is an interesting recent article by Alasdair Macleod of Goldmoney in which he makes a case for believing that there is a whale accumulating large quantities of silver via futures contracts. He speculates that it is the PBOC securing a supply of silver for China.

i heard it was Backyard Bullion putting in his silver shot buy order for post Brexit

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A silver contract is for 5000 troy ounces. Even a mini-contract is 1000 troy ounces, so $16,000 would be your minimum size. Plus, there would be a broker fee, and if you want to take delivery, you have to arrange that yourself. Ok, if you live in NY and can drive to the warehouse, otherwise an extra cost. It's probably not feasible for retail investors, though I daresay companies that make coin blanks and rounds could use it.

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Bumble covered it.  You absolutely could, but there are some fees involved and the standard contract size would run $80,000.

 

Edit: I'm sure there are some ultra wealthy stackers that do take physical futures delivery as their primary PM investment.

Edited by Branman1986

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I had a quick look since I was interested myself. The mini contract 1000 oz you can’t take delivery or deposit this size but gives you a fifth ownership of a standard 5000ox bar. So 80000usd  5000 min size for delivery as said above 

https://www.cmegroup.com/trading/metals/files/1000-oz-silver-futures-faq.pdf

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