Yesterday we alerted readers to an extremely significant development that we picked up in the minutia of the CME’s Open Interest data:
it appeared that silver longs were ROLLING March future contracts BACKWARD to stand for immediate delivery in January and Feb, as Jan/Feb OI rose by 2,995 contracts while March OI declined by a nearly identical 2,936 contracts.
Well, it appears that we just received confirmation that this is EXACTLY what is occurring, as the 1/8 CME OI data reveals 1,624 January deliveries- meaning THE ENTIRETY OF THE NEW JAN OI FROM 1/7 PLUS AN ADDITIONAL 193 CONTRACTS STOOD FOR IMMEDIATE DELIVERY!!
This brought the Jan OI down 1,318 contracts to 837 at the close.
The Feb contract saw an ADDITIONAL RISE OF 378 contracts Thursday to 3,801 contracts at close, while March OI dropped 3,087 to 101,487- indicating that BACKWARD ROLLING TO JAN/FEB SILVER CONTINUES!!
The implications of this for the physical silver market cannot be overstated. We are looking at a HISTORIC physical supply shortage in the silver market.
Longs are either in DESPERATE need of immediate physical silver (over 8 million oz of deliveries reported 1/8 alone), or else they are concerned that they will be forced to CASH SETTLE come March delivery.
Meanwhile, SPOT silver has jumped BACK TO $80/oz Friday morning:
Silver looks set to test its recent all-time high of $83.98 next week, and if $84 is taken out, a rapid move to $99 is possible.
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