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« Max Keiser interviews Brad Cooke of Endeavour Silver Corporation | Main | Think Silver Has Gone Parabolic? 1980 was 5 Times Faster! »
Wednesday
Apr272011

25% Of Scotia Mocatta’s Silver Transferred From “Registered” To “Eligible” Status: A 45% Reduction In “Physical”

Zero hedge 27 April 2011.JPG

Before you 'do' the dishes, read this and then you can stew on it while you are up to your neck in soap suds:


Something interesting appeared in the daily NYMEX report of its silver warehouse stockpile data: Canada's largest bullion depository (and one of five total) reclassified a whopping 5.2 million ounces of silver from Registered to Eligible status. In order to get a sense of how big this amount is, which amounts to just under $238 million at today's fixing price, it represents just over 25% of the total silver stored at Scotia Mocatta, and about 5% of the total silver held across all depositories.

The reason for this substantial shift is given as follows: "due to a reporting reclassification, 5,287,142 t oz was moved from Registered to Eligible." That's a pretty substantial reporting reclassification. Of course it could well be nothing but that, although one would imagine that a fat finger is somewhat unlikely when it comes to such a material amount.

On the other hand, as those who follow the NYMEX data know too well, registered silver is actual physical Comex silver. Eligible on the other hand is sometimes called "someone else's silver" as it does not go through assays on exit/selling events. In other words, this is silver that can not be used to make delivery under a futures contract. As a result of this reclass, total registered silver dropped by 13% from 41.0 million ounces to 35.8 million.

Assuming one does not have full faith in the simple error story, does this mean that deliverable silver just dropped by 13% overnight (this event occurred yesterday, but was reported as usual with a 24 hour delay)? And if so, is this effective transformation of physical to semi-paper silver indicative of what we may expect from other depositories in the next few days as the delivery notices start coming in?

Snapshot of silver holdings (link):

Something to ponder, thoughts on a post card please!



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Over in the Options pit, our model portfolio has managed an average return of 40.51% per trade, 70 closed trades, 68 closed at a profit, or a 97.14% success rate. Average trade open for 42.21 days. (4 more profitable trades have now been closed, so we will update the chart tomorrow)

sk charts 19 April 2011.JPG


The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.

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Stay on your toes and have a good one.

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Reader Comments (2)

Hmmmm...

April 27, 2011 | Unregistered Commenterfallingman

Hmmmm indeed!!!

Must prepare the sharks with the 'LAY-ZERS' attatched to them!

(Thank you to Austin Powers for the Dr. Evil character)

April 28, 2011 | Unregistered CommenterDr.Evil

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