This is not going to end well: COMEX registered stock hits new low

This absolutely doesn’t look good for holders of COMEX physical gold stock. Get your gold while you can… Registered stock dropped to 202054.54 troy ounce or 6 tonnes.

This is how the paper to physical gold leverage looks like. Eligible to registered gold is at 34 to 1.

Silver is also getting scarcer as stock is falling.

Which is confirmed by the sudden rise in premium.

COMEX Gold New Record Low

By now it is already baked in what these charts mean, just wanted to update you that we hit a new low in registered gold at COMEX. It is almost at worrying levels now.

Leverage continues to go up exponentially at a ratio of 17.5, the highest ever recorded on this chart.

I would expect a blowup soon. I have no idea how it will blow up, but blow up it will.

Click here to learn about the COMEX default.

Leverage in Paper Gold Hits All Time High

In another blog post I said the leverage of paper gold to physical gold at the COMEX was at record highs, but now we get another new record high.

Open interest was 397590 or 39759000 ounces in total. Registered stock is 590816 ounces (which is an all time low). That’s a leverage of 39759000/590816 = 67. This is up from the last time when it was 56. I wonder when it will break.

COMEX gold stock

Leverage in Gold

Increasingly more people try to short gold down, but it seems they are not really succeeding lately. If people really start buying it, they won’t find it as everything went to Asia.

Leverage of paper gold hits record high

Registered gold at COMEX hit a new record low of 640551 troy ounces (blue chart). It’s not long anymore before a default happens just like what happened with the London Gold Pool in 1968. Manipulating the price will never ever work forever. Once this blows up, we will see a continued rise in gold.

Moreover, the leverage of eligible gold to registered gold went to a record high of 10.1.

Open interest was 390369. Which is 36036900 ounces. Notice that open interest (speculation) is not falling, while physical gold stocks are falling. This is unsustainable.

If we divide this number by the registered stock, then we get 36036900 / 640551 = 56. This is a record high.

Gold Lease Rate Higher, Registered COMEX Gold Lower

Just another update.

Gold Lease Rates are at an all time high again:

Chart 1: Gold Lease Rate

COMEX registered gold has once declined to even lower levels. J.P. Morgan unloaded its registered gold. Total registered gold at COMEX now stands at: 875713 troy ounces. We are nearing the bottom.

Chart 2: COMEX gold

The Leverage in COMEX Silver is about to Explode

Why is the eligible silver going up at such high pace and open interest going up at the same time?

As I told people before, eligible silver is not allocated. People think they own it, but it is not available for delivery. The ratio of registered to eligible is now: 29.7%. Down from 33% the last time I looked.

As this ratio between registered and eligible goes down, the leverage is going up and up. And when this leverage breaks (due to a short squeeze), the non-eligible supply of smaller bars and coins is going to disappear in front of you.

Chart 1: COMEX Silver

People know this, and as a result are buying physical silver in record quantities. The U.S. Mint just sold a never seen record of 3.37 million ounces in February 2013.

Registered Silver Not Increasing With Open Interest

For people who are worried about the recent rise in the total silver stock at the COMEX I want to point out that the registered inventory hasn’t gone up (Chart 1). Only the eligible inventory has gone up. The ratio of registered to eligible is now 33%. In 2009 it was 133% (more registered than eligible silver) (Chart 2).

Chart 1: Silver Stock COMEX

The lowest ratio historically was 40% mid 2011 if we look on Chart 2. But today the ratio is even lower as I stated before (namely 33%). Eligible silver is now at the highest ever while registered silver is at the lowest ever. The reason for this is that people are taking delivery on their physical silver. That’s the fact. Only registered silver counts, eligible silver is just a warrant that can be converted into registered silver. But you need to find this registered silver somewhere of course…

Chart 2: COMEX silver stock

The funny thing is that open interest is increasing now. As of the previous week open interest had increased to 148,351, which is pretty high. The short positions have increased too.

As I pointed out before, if open interest and short positions increase, but the registered inventory doesn’t increase, it says to me that there is a shortage of silver. The reason is, if you are crowded with silver traders, you need to have the physical stock available, so registered silver needs to be going up, which it is not.

And you know what happens when there is a shortage of silver…