There was 7 months of backwardation in silver at the open last Friday. 5 months worth for the low price and 1 month for the last price.
The settle price is not the last price. It is a weighted average for market makers to value their holdings to market. Sounds fishy to me. Average is average so why call it a "weighted" average?
Yesterday, I pasted the comex prices for Wednesday, The prices in this post are for Thursday. Again there is 2 months of backwardation in the open, low and last prices. The closing price (Last) has over a dollar of backwardation vs June and almost $1 vs July. It is not normal that prices for the future months are lower than the current month.
The holders of the May active contract are required to allocate the full purchase price of the 5000 ounce silver contract. The backwardation is being done to entice the physical buyers to sell their May contract(s). At $80/oz a contract is $400,000. Most speculators would sell the May contract and put $350k in a 1 month treasury and use the other $50k to buy the June or July contract on margin. If they wanted delivery then the price would be 5000 oz x $79 = $395,000. which is a $5000 savings. At 3% the 1 month treasury would net another $800. This would net a return of about 17% annualized.
Buyers that need the metal on the other hand cannot wait a month and will continue to demand delivery no matter how cheap they make the June and July contracts.
There are trapped shorts. If they cannot escape with games, they will need to escape by increasing the price high enough to get contract buyers or physical holders to sell. The only other method would be to buy from refiners or England and ship approved bars to Comex fast.
As of the close of business at Comex on Thursday, there were still 966 buyers of the May 26 silver contracts waiting for delivery. Today, Friday, a whole grand total of 6 contracts were delivered. At that rate it will take 160 days to deliver the remaining 960 contracts. If the sellers have the metal, what are they waiting for?
The price data below are yesterdays results. May silver opened a good bit above June and July's price and closed a bit higher than June. The day low price was also way above the June low price. My guess is someone tried selling the June silver price down in order to entice May contract holders to sell May and buy June. This backwardation indicates there may be a trapped short.
According to today's Comex Silver volume report, open interest on the 1st delivery day for the month of May dropped by 2411 contracts. The daily metal delivery report had todays data for all metals except silver which is still showing yesterdays delivery of 1 whole contract. I doubt the lack of updating the silver numbers is by accident. The year to date table however does show todays silver delivery amount to be a total of 4580 contracts. https://www.cmegroup.com/solutions/clearing/operations-and-deliveries/nymex-delivery-notices.html
This means that an additional 2169 spot contracts of physical were bought today. That is 10,845,000 ounces of real money which also conducts electricity. To put this in context, only a few spot contracts were bought in the last few days of the April contract, but 2169 were bought on the 1st day of May when sellers figure they have 29 more days to come up with the metal. Had this 10+ million ounces been bought at the end of April contract, the price would have soared.
There are still 6299 May contracts outstanding = 31,495,000 ounces https://www.cmegroup.com/markets/metals/precious/silver.volume.html
To add even more intrigue, the house accounts of the commercial banks were the main buyers. Not just 2 or 3 of the banks, but pretty much all of them. Standard Chartered Bank House account was the main seller with 2537 contracts issued. The usual top seller, JP Morgan commercial only issued 893 contracts. Standard Chartered is a British bank.
The above data to me indicates blood in the water.