(Seeking Alpha) Ending last week with nearly 119 million ounces of silver (Moz) in the four COMEX depositories, this week the word has been get your silver while you can.
Slightly less than 2 million ounces of silver has been withdrawn from COMEX stocks in three days (July 6-8), with eligible silver dropping from 55.4 Moz to 53.5 Moz. Significant withdraws were experienced by HSBC Bank (HBC) (down 1.26 Moz) and Sottia Mocatta (down 546,000 oz). Brinks also registered a withdraw of 30,000 oz of silver.
The reduction is only 2% of total stocks that COMEX claims, however it is nearly 5% of eligible stocks that can be used for futures redemption. The remainder is registered, but is already allocated (owned) by other investors who are storing it in the vaults.
For leverage fans, that is 10 oz of silver under contract for every ounce of silver available. If you count the fact that COMEX allows you to purchase a contract with 10%, then actual leverage vs physical metal held by COMEX is closer to 100 to 1.
That should answer the question as to why someone would refer to it as "paper" silver. It should also generate a question as to why so much silver is starting to flow out of the COMEX.
By Ed Zimmer
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