COMEX Rules for SLV
Research for Online Investors

by John Dalt

8/6/09

The market is trying to decide what to do today.  Are we going higher, or will we fall off a cliff?  There are good arguments for both views, I won’t bore you and repeat them here.  The one signal I am watching is the value of the dollar.  The dollar has been on a steady decline since March.  UUP seems to have bottomed.  Can it go down, sure but….  There was strong buying in the last hour today as buyers came out to buy the “bargains.”  We shall see what they got for their money.  The post is short today, as I had an appointment this morning, and spent most of the rest of the day researching the following question.

Subscriber R.V. writes:

“Your article on SLV contains the statement that shares of SLV can be used to settle COMEX silver contracts.  That is absolutely not true.”

John answers:
I may have committed an error, after three hours of reading on the COMEX site, I have found Notice #50, on Exchange Rule 104.36 dated 2/22/05, that allows the IShares COMEX Gold Trust (IAU) ETF to be substituted for physical gold in settlement of a “futures for physicals”.  I have found no such statement concerning SLV, or GLD.  This would call into question the integrity of one of the sources I used in writing the article on SLV.  You can read COMEX Rule #50

I have submitted this question to NYMEX, “Can the ETF’s SLV or GLD be used in exchange of futures for physicals (EFP) on the COMEX Division transactions?”  I will report the answer when received.  If I have passed on incorrect information, I apologize.  I will correct the record.  This is the danger of the internet, there is a bounty of information, some of it may not be accurate.

I will be out of the office tomorrow for fishing.  The market will operate without me, and I need to get some fresh air.  I will be back Monday morning to slay dragons and tilt windmills.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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