Silver Demand Drivers (and vault totals)

foolsgold said:

Good information about historical Ag manipulation and current market status. ...

Click to expand...

Tuesday morning 1-20 in silver. Silver spot float around ~$94 Monday before rising above $95 overnight. Today markets in the USA wake up again ...

EFP spread​

With a current spot price of $95.20, EFP spreads:

Jan26 = -$0.81 vs -$0.60 Yesterday
Feb26 = -$0.90 vs -$0.32
Mar26 = -$0.40 vs -$0.14

EFP Commentary​

Spreads shifted back a bit negative as of this morning. The Jan26 contract is now in backwardation to Feb26. We'll see if the spreads normalize as USA trading resumes today.

China​

SGE silver closed @ ~$103.45/ozt (huge premium over LBMA spot).

SFE silver vault 26K ozt (0.8 ton)

SFE vault reports an inflow! Has the bleeding stopped?

Indian MCX Futures​

Feb26 [SILVERM 5kg] : $111.69/ozt
Mar26 [SILVER 30kg] : $110.69/ozt

MCX (less VAT) > SFE/SGE

Comments:

Big Picture​

- Indian futures > China/SGE/SFE >> LBMA spot > COMEX Jan26
- EFP spreads (tariff risk?)
- USA market resumes today

ICYMI:​

... Solid electrolytes made from crystalline materials tend to develop microscopic cracks. Over time, these cracks grow during repeated charging and eventually cause the battery to fail.

Researchers at Stanford, building on work they published three years ago that revealed how tiny cracks, dents, and surface defects form and spread, have now identified a potential fix. They found that heat-treating an extremely thin layer of silver on the surface of a solid electrolyte can largely prevent this damage.

As reported in Nature Materials on January 16, the silver-treated surface became five times more resistant to cracking caused by mechanical pressure. The coating also reduced the risk that lithium would push its way into existing surface flaws. This type of intrusion is especially harmful during fast charging, when very small cracks can widen into deeper channels that permanently degrade the battery.
...

Click to expand...

More:

Yesterday (1-20) in silver

Yesterday silver dove from ~$95.5 to ~$93.5, and recovered to ~$94.5. Below the surface, physical silver is moving ...

COMEX 1-16​

743K ozt (23.1 tons) deposited in HSBC

3.4M ozt (106.5 tons) withdrawn from Asahi (301K), Brinks (646K), CNT (543K), JPM (1.3M), Loomis (611K) et al

1.1M ozt (33.9 tons) moved from [R] to [E] mostly in CNT

COMEX Commentary​

Last Friday was a 6 trucks withdrawal day at the COMEX. News of tariff risk broke over the weekend and Jan26 EFP spread looked like it might shift positive which should squelch these huge withdrawals. We'll see if COMEX withdrawals continue bleeding heavily this week or not.

EFP spread​

With a current spot price of $93.93, EFP spreads:

Jan26 = -$0.11 vs -$0.81 Yesterday
Feb26 = -$0.25 vs -$0.90
Mar26 = +$0.26 vs -$0.40

EFP Commentary​

As anticipated, spreads shifted back positive as of this morning. The Jan26 contract is almost positive and in backwardation to Feb26. If Jan26 turns positive, I expect COMEX withdrawals this week to abate.

China​

SGE silver trades just under $104/ozt and maintains a huge premium over LBMA spot

SFE silver vault 572K ozt (17.8 ton)
SGE silver vault 3.4M ozt (105.6 ton) last week

It appears that the bleeding has not stopped.

Indian MCX Futures​

Feb26 [SILVERM 5kg] : $113.35/ozt
Mar26 [SILVER 30kg] : $112.13/ozt

MCX (less 6% VAT) = ~$105 > SFE/SGE

SLV Share Lending​

Shares available currently 10M

Borrow fee jumped from 0.50% to 0.66% before settling at 0.61%

Still plenty of shares to plunder.

SLV Assets​

Blackrock: 5.3M shares added
JPM: 4.8M ozt (149.4 tonnes) added

Yesterday's add was slightly more than everything shed last week. JPM needs more COMEX silver to make up for what was shed Jan 5-7.

PSLV​

Zero units change
10 ozt added (just an adjustment)

PSLV units/ozt ratio sits at .341. They still need to add 1.5M ozt (47 tons) to get back to the historical .3434 ratio

Big Picture​

- Indian futures > China/SGE/SFE >> LBMA spot >= COMEX Jan26
- EFP spreads (tariff risk?)
- COMEX(LBMA)
- SLV (LBMA)
- PSLV needs ~1.5M ozt

ICYMI:​

Last week in silver (in metric tons):

SGE silver vault - 105.6
SFE silver vault - 6.6
SLV London vault - 142
PSLV silver vault - 137
COMEX silver stock - 342.4
LBMA silver stock - ??? (no daily or weekly data because LBMA is run by dinosaurs)

Global net change (less LBMA):
Jan 12-16 = 446.4
Jan 5-9 = 659.7 **(668.7 - I had a 9 ton mistake in my spreadsheet for SGE Jan 5-9)
Dec 29-Jan 2 = 160.6
Dec 22-26 = 317.8
Dec 15-19 = 149.9
...


China's SGE vault continues the big mystery of draining vault stock while maintaining huge premiums to LBMA spot. This should cause silver flow from London to China, but it looks like the LBMA is not delivering (or at least, not delivering enough!). The SFE (futures) vault seems to have stabilized a bit.

PSLV posted some very healthy inflows last week. They are still short about 47 tons to maintain their historical units/ozt ratio though. As spot price appears to be on the rise again, they will likely continue adding units and ozt. Every 1K ozt they add is a London Good Delivery bar that becomes unavailable to the LBMA for clearing OTC market trades.

Last week the LBMA apparently really needed silver because the COMEX and SLV vaults bled big time. Jan26 EFP spread was firmly negative all week, so the COMEX draining was expected as bullion banks are likely shipping COMEX silver to London. That may end this week however as tariff risk is back in play.

SLV shed ~9.2M ozt (286.2 tons) from the London vault Tue-Thu and then recovered 3.3M ozt (104.6 tons) in the London vault on Fri in an apparent swap for silver from their NYC vault. SLV is the emergency relief valve for the LBMA - raided for its vault stock when the LBMA gets into a pinch. Last week was the second consecutive week that it was being raided. However, spot price has jumped since Friday and yesterday SLV posted a huge inflow (slightly exceeding the entirety of last week's drain). Without SLV vault stock, the LBMA is surviving on just the COMEX garden hose.

One can only imagine what chaos might be unfolding in the LBMA's London vault system right now. We can only imagine because the dinosaurs at the LBMA do not provide daily/weekly reporting of their vault stock like every other market and major fund in the world.

It is only a matter of time before some country like Poland officially remonetizes silver and then the dam bursts good or bad depending on what side you are on.

nickndfl said:

It is only a matter of time before some country like Poland officially remonetizes silver and then the dam bursts good or bad depending on what side you are on.

Click to expand...

I think something like that happens without fanfare. India is already allowing very limited monetization of silver in their banking system. I expect a gradual expansion of financialization (use as high quality collateral) to continue developing.

Yesterday (1-21) in silver

Yesterday silver dove from ~$95 to ~$90, and recovered to ~$93. Below the surface, COMEX + SLV are bleeding and LBMA appears to be frozen ...

COMEX 1-20​

1.3M ozt (42 tons) deposited in Asahi (118K), HSBC (1M), StoneX (200K [R])

5.5M ozt (171.5 tons) withdrawn from Brinks (319K), CNT (633K), JPM (2M), Loomis (1.8M), MT&B (690K) et al

3.7M ozt (115.6 tons) moved from [R] to [E] mostly in Asahi (3.5M)

COMEX Commentary​

Tuesday was a 9 trucks withdrawal day! Trump says a deal was reached and tariff risk is over. Expect Jan26 EFP spread to shift more negative and huge withdrawals to continue. Looks like Jan-tober will extend to Feb-tober as the COMEX garden hose refills the LBMA pond.

EFP spread​

With a current spot price of $93.42, EFP spreads:

Jan26 = -$0.56 vs -$0.11 Yesterday
Feb26 = -$0.07 vs -$0.25
Mar26 = -$0.06 vs +$0.26

EFP Commentary​

As anticipated, Jan26 (and Mar26) spread has shifted more negative as of this morning. The Feb26 contract didn't get the message - it is more positive and nearly equal to Mar26. Jan26 is currently the faucet/valve to the garden hose that refills the LBMA pond.

China​

SGE silver trades about $104.30/ozt and maintains a huge premium over LBMA spot

SFE silver vault377K ozt (11.7 ton)

It appears that the bleeding quite has not stopped yet.

Indian MCX Futures​

Feb26 [SILVERM 5kg] : $106.52/ozt
Mar26 [SILVER 30kg] : $104.95/ozt

(Feb26 less 6% VAT = ~$100.13) < SFE/SGE. Did India get some silver in?

SLV Share Lending​

Shares available currently 9.5M

Borrow fee dropped from 0.61% to 0.54%

Been a while since available shares start the day less than 10M. Will they reload?

SLV Assets​

Blackrock:2M shares
JPM:1.8M ozt (56.4 tonnes)

SLV raiding continues. COMEX has had heavy withdrawals lately, I expect once they arrive in London, SLV will pop with added shares and ozt as these raids are short term measures.

PSLV​

Zero units change
170K ozt (5.3 tons) added

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio

Big Picture​

- China/SGE/SFE > Indian futures >> LBMA spot > COMEX Jan26
- Jan26 EFP spread(tariff risk gone)
- COMEX(LBMA)
- SLV (LBMA)
- PSLV needs ~1.3M ozt

Big Picture Comments​

Is India buying silver from the LBMA, SGE or both? If the SGE keeps bleeding vault stock, will China close off silver exports to India?

Is the LBMA completely broken (ie. not delivering physical silver)? Are we to believe that no bullion bank is taking the free money from the "buy LBMA - sell SGE" arbitrage trade? Silver lease rates have not blown out yet, so this is a very curious enigma.

ICYMI:​

pmbug said:

I think something like that happens without fanfare. India is already allowing very limited monetization of silver in their banking system. I expect a gradual expansion of financialization (use as high quality collateral) to continue developing.

Click to expand...

I think Russia has as well but not much of their SIlver was getting out before.

Remember FOMC meeting is next week. I need to max out positions before then.

Yesterday (1-22) in silver

Yesterday silver rose from ~$93 to ~$96, and rose further to ~$98 overnight. Below the surface, COMEX + SLV are still bleeding and LBMA is a mystery ...

COMEX 1-21​

Zero ozt deposited

4.1M ozt (129.1 tons) withdrawn from Asahi (604K), JPM (1.2M), Loomis (649K), MT&B (1.6M)

1.7M ozt (55 tons) moved from [R] to [E] in Asahi (606K), Brinks (313K), CNT (140K), JPM (534K) et al

COMEX Commentary​

Wednesday was a 7 trucks withdrawal day. The heavy bleeding continues and the Registered [R] to Eligible [E] indicates there is more to come. Looks like Jan-tober will extend to Feb-tober as LBMA drinks COMEX's silver ocean.

EFP spread​

With a current spot price of $98.18, EFP spreads:

Jan26 = -$0.45 vs -$0.56 Yesterday
Feb26 = -$0.27 vs -$0.07
Mar26 = +$0.07 vs -$0.06

EFP Commentary​

Jan26 spread remains firmly negative (faucet/valve to the garden hose that refills the LBMA pond remains open). Feb26 spread shifts negative (normalizes relative to Jan/Mar). Mar26 shifts positive.

China ​

SGE silver rises to $111.67/ozt and maintains a huge premium over LBMA spot.
SFE silver in slight backwardation trading $0.10 less than SGE.
SFE silver vault256K ozt (8 ton)

Vault stock draining, price rising. Will China close the export flow to India?

Indian MCX Futures ​

Feb26 [SILVERM 5kg] : $114.08/ozt
Mar26 [SILVER 30kg] : $112.32/ozt

(Feb26 less 6% VAT = ~$107.24) < (SFE/SGE @ $111+). Did India get some silver in?

SLV Share Lending​

10M Shares available

Borrow fee dropped from 0.54% to 0.53%

Still plenty of shares available to plunder.

SLV Assets​

Blackrock:2.2M shares
JPM:2M ozt (62 tonnes)

SLV raiding continues even as LBMA spot rises.

PSLV​

Zero units change
2,396 ozt added (two LGD bars, or just an adjustment?)

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio

Big Picture​

- ($111) > (less VAT $107) >> ($98) > COMEX Jan26 ($97)
- COMEX(LBMA)
- SLV (LBMA)
- PSLV needs ~1.3M ozt

Big Picture Comments​

Both China and India are trading silver at a hefty premium to LBMA spot, so it would seem that the LBMA is unable to satisfy global demand for silver. There are a lot of folks urging caution on silver - "blow off top", "pullback", etc. Until I see these premiums return to near zero, I think silver continues to fly.

ICYMI:​

X post does not embed

How long can the COMEX silver vaults support the LBMA? I did some simple math to estimate the remaining run rate based upon the current drain rate:

Jan26 = Jan 1 to Jan 21 (13 working days [wd])

Jan26 total COMEX silver drain = 31.6M ozt (983.2 tonnes)

Jan26 avg daily drain rate = 2.4M ozt/wd (75.6 tonnes/wd)

Remaining free float vault stock is 324M ozt (10,077.29 tonnes)

Run rate @ Jan26 avg daily drain rate = 133.3 wd

7 wd left in Jan26. ~20 wd/month for the remaining calendar year.

COMEX silver vault runway = ~6 months at Jan26 avg daily drain rate

If the COMEX drain maintains the Jan26 avg daily drain rate, Jan-tober might extend through June-tober and then we'll see one heck of a fireworks show in July.

Yesterday (1-23) in silver

Yesterday silver rose from ~$99 to ~$103. Below the surface, COMEX + SLV are still bleeding and the LBMA is a mystery ...

COMEX 1-22​

317K ozt (9.9 tons) deposited in Loomis

2.1M ozt (63.9 tons) withdrawn from CNT (571K), HSBC (654K), Loomis (648K), MT&B (170K)

Zero ozt moved from [R] to [E]

COMEX Commentary​

Thursday was a 4 trucks withdrawal day. The LBMA continues to drink the COMEX's silver ocean.

EFP spread​

With a current spot price of $103.15, EFP spreads:

Jan26 = -$0.22 vs -$0.45 Yesterday
Feb26 = -$0.16 vs -$0.27
Mar26 = +$0.14 vs +$0.07

EFP Commentary​

EFP spreads are either shifting slightly more positive or strongly negative depending upon whether you are looking at the CME's LAST or SETTLE price for silver futures.

Indian MCX Futures ​

Feb26 [SILVERM 5kg] : $115.02/ozt
Mar26 [SILVER 30kg] : $113.49/ozt

(Feb26 less 6% tax = ~$108.12) < (SFE/SGE @ $111+). Did India get some silver in?

SLV Share Lending​

10M Shares available

Borrow fee dropped from 0.53% to 0.29%

You might think with plenty of shares available to plunder and the borrow fee dropping hard that all is well in SLV/LBMA land, but ...

SLV Assets​

Blackrock:500K shares
JPM:453K ozt (14.1 tonnes)

SLV raiding continues even as LBMA spot rises. I'm guessing this raiding is masking new share additions as the spot rose $4 yesterday.

PSLV​

Zero units change
2,163 ozt shed (just an adjustment most likely)

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio

Big Picture​

- ($111) > (less 6% tax $108) >> ($103) > COMEX Jan26 ($102)
- COMEX(LBMA)
- SLV (LBMA)
- PSLV needs ~1.3M ozt

Big Picture Comments​

and maintain premiums to the West. Is the LBMA sending silver East as fast as it gets it from the COMEX? The COMEX is draining at a record pace this week and still the APs are raiding SLV vault stock. Maybe this is just an artifact of the lag time for the logistics of shipping the silver from USA to London.

ICYMI:​

That Settlement difference is Only because futures are stupid. The Settlement time is like Noon central so any strong up day there is a big difference.

When I talk about silver free float vault stock at the COMEX, I always consider the inventory of both Registered [R] and Eligible [E] categories. Anyone that owns metal in either category can easily (almost instantly) switch the metal from one category to the other. The [R] metal incurs slightly more fees, but otherwise they are essentially the same.

Bullion banks maintain vault stock in both categories for both their customer accounts and their house accounts. Figuring out how much COMEX vault stock is actually liquid is not a simple task and we do not have sufficient public data to determine how much of the COMEX vaulted silver (less the SLV vault stock JPM holds in the [E] category) is actually available.

Hence, the free float numbers I calculate are always upper bounds. The true extent of the liquid - actually available - free float is expected to be less, but we have no credible method for determining the difference.

The comment quoted is based upon what seems to be a somewhat common misconception that only [R] category silver is free float (ie. available). It prompted me to look back over the COMEX silver stock reports and do some number crunching...

Last year, the LBMA got into a crunch in October and the COMEX started draining vault stock to bail them out. As the last week of September marked the local high for [R] silver stock, I compared the total COMEX withdrawals from October 1 to December 31 against the drawdown in [R] silver stock for the same period. I also looked at the total received (deposited) silver for the same period:

Total Withdrawals [TW] = 111,076,221 ozt (~3,455 tons)
[R] Stock Drain = 66,427,820 ozt (~2,066 tons)
[R] = 60% of [TW]

Observation

[R] category vault stock drain was only 60% of the total withdrawals. 40% of the total withdrawals came from the [E] category vault stock. Let's dig a bit deeper...

Total Received [TR] = 34,093,674 ozt (~1,060 tons)
[R] + [TR] = 100,521,494 ozt (~3,126 tons)
[R] + [TR] = 90% of [TW]

[E] Stock Drain = [TW] - ([R]+[TR]) = 10,554,726 ozt (~328 tons)
[E] Stock on Oct 1 = 338,366,347 ozt (~10,524 tons)
[E] Stock Drain = ~3% of total [E] stock on Oct 1

Observation

[E] category vault stock only drained ~3% over the last three months while the COMEX was experiencing a heavy drain of vault stock. Does this mean ~97% of [E] stock is illiquid? Not necessarily. As the [R] category draws down further, I expect COMEX withdrawals will increasingly rely upon [E] category stock. It will be fun to repeat this exercise in April using data from Jan-Mar.

Monday morning 1-26 in silver. Silver spot has climbed to $110 this morning. And yet London still hasn't closed the premium gap with China ...

EFP spread​

With a current spot price of $110.10, EFP spreads:

Jan26 = -$0.04 vs -$0.22 Saturday
Feb26 = +$0.28 vs -$0.16
Mar26 = +$0.67 vs +$0.14

EFP Commentary​

Well this "settles" Saturday's puzzle regarding the CME's LAST or SETTLE price for silver futures. LAST is the more informative value. EFP spreads are definitely shifting more positive. We have to wait until tomorrow afternoon to see if this slows down COMEX withdrawals.

China ​

SGE $122.95
SFE $121.58

China in backwardation as SGE (spot) > SFE (futures) by $1.37. SFE silver vault reports another small outflow of 234K ozt (7.3 tonnes).

India ​

MMTC-PAMP (retail) : $134.95
MMTC-PAMP less 6% import tax and 3% VAT = $122.80
Feb26 [SILVERM 5kg] : $114.97
Mar26 [SILVER 30kg] : $113.44

MMTC-PAMP less taxes < SGE
(Feb26 less 6% tax = ~$108.07) < SFE

Big Picture​

SGE ($123)
Retail (less taxes $122.8)
SFE ($121)
spot ($110)
COMEX Jan26 ($110)
MCX (less tax $108)
- EFP spreads shifting positive (COMEX drain to slow/end?)

Big Picture Comments​

China is driving the bus. India is riding shotgun (I expect MCX to rise when they open for the week). LBMA and COMEX are chasing the bumper.

ICYMI:​

Given that China is driving the bus, any thoughts on what happens if China does "sell, sell, sell!"? Do they crash the markets, and then buy it all up at half the price? Or is the demand still beyond their ability to control?

Has silver just had one manipulator (JPM, LBMA, Comex) replaced by another (China)?

If China were to stop buying (or worse, start selling), silver would either slow from parabolic to linear growth at best (does India stop buying too?), trade sideways or crash. China needs silver for their industries. India does too, but also needs it for their investors (ETFs). USA is just getting started with the $2.5B critical materials stockpile initiative, but could eventually become a significant player for physical silver too.

I have seen speculation that China is the one keeping COMEX futures (and by proxy, LBMA spot) down so they can siphon the physical silver ocean from them. There's no public data that I'm aware of to confirm or deny that speculation.

India wants to make their own solar panels in addition to citizens buying it for hedging. Tjere was so.e profot taking in tje ETFs today at tje end of tje day, bit the fundamentals, especially 300 to 1 have not changed.

Shanghai 128.45

Yesterday (1-26) in silver

Yesterday silver shot from ~$110 to ~$117, fell back to $101 and then recovered to $112 overnight. What a rollercoaster! Below the surface, vaults are bleeding and intrigue is building ...

COMEX 1-22​

598K ozt (18.6 tons) deposited in CNT

1.8M ozt (55.4 tons) withdrawn from Brinks (55K), CNT (731K), HSBC (615K), JPM (210K), StoneX (167K)

40K ozt (1.3 tons) moved from [E] to [R] in CNT (5K), Loomis (35K)

1M ozt (32.1 tons) moved from [R] to [E] in Asahi (207K), HSBC (103K), MT&B (702K) et al

COMEX Commentary​

Friday was a 4 trucks withdrawal day. This afternoon we get COMEX vault stock report for Monday and I'm curious to see if the withdrawals continued given the positive shift to EFP spreads and the crazy rollercoaster price action.

EFP spread​

With a current spot price of $112.47, EFP spreads:

Jan26 = -$0.97** vs -$0.04 Yesterday
Feb26 = -$0.75 vs +$0.28
Mar26 = +$0.29 vs +$0.67
** I could not find a real time quote for Jan26 contract (both Marketwatch and BarChart were hours old)

EFP Commentary​

Looks like yesterday's rollercoaster forced EFP spreads to shift back negative a bit. Will they drift back positive today as the markets recover from yesterday's turbulence?

China ​

SGE $128.48
SFE $126.47

SGE (spot) > SFE (futures) by $2.01 now! Seems immediate demand is growing.

SFE silver vault reports another outflow of 950K ozt (29.6 tonnes).

India ​

MMTC-PAMP (retail) : $136.20
MMTC-PAMP less 6% import tax and 3% VAT = $123.94
Feb26 [SILVERM 5kg] : $124.86
Mar26 [SILVER 30kg] : $123.68

MMTC-PAMP less taxes < SGE
(Feb26 less 6% tax = ~$117.37) < SFE

SLV Share Lending​

10M Shares available

Borrow fee jumped 0.29% to 0.80% and settled at 0.56%

SLV share lending getting more active. Available shares dropped to 6.1M overnight.

SLV Assets​

Blackrock:4.1M shares
JPM:3.7M ozt (115.6 tonnes)

SLV raiding continues as LBMA spot rises.

PSLV​

Zero units change
911 ozt added (just an adjustment most likely)

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio. Are they having trouble sourcing the silver?

Big Picture​

SGE ($128.48)
SFE ($126.47)
Retail (less taxes $123.94)
MCX (less tax $117.37)
spot ($112.47)
COMEX Jan26 (~$111.50) (** see above)

- EFP spreads shifted slightly negative
- COMEX(LBMA)
- SLV (LBMA)
- PSLV still needs ~1.3M ozt

ICYMI:​

Something has changed. The spreads between China and the US are getting huge. They used to be 4-6 bucks. Now 20-22.
It's funny that China has made it difficult to export silver, like anyone wants to buy it there instead of over here anyway. Huge discount in the uS. I imagine the US will have to put trade restrictions in place if they want to keep any of the shiny stuff here.

Another problem of course is that China and India already going direct to the miners and offering big premiums over spot. Not clear on what spot they are using. Chinese or London? If this wide spread continues the miners will just sell direct and nothing will make it into the US markets.

China is experiencing a supply shock. Bullion banks are trying to paint the COMEX futures for expiration. I think silver price is going to pop again when the Jan26 contract is off the board.

My supplier in China said to expect prices to increase with solar panels and batteries.

pmbug said:

... I think silver price is going to pop again when the Jan26 contract is off the board.

Click to expand...

Yesterday (1-27) in silver

Yesterday silver dropped from ~$112 to ~$106, climbed back to $112 and then surged to $116 overnight before falling below $114 again this morning in anticipation of the market open. Below the surface, vaults are still bleeding ...

COMEX 1-26​

5K ozt (one contract) deposited in Brinks

100K ozt (3.1 tons) withdrawn mostly from Loomis

865K ozt (26.9 tons) moved from [R] to [E] in Loomis (63K), MT&B (767K), StoneX (35K)

COMEX Commentary​

Monday the withdrawals nearly stopped as expected given the positive shift to EFP spreads that day. Hard to know what to expect for COMEX withdrawals for this week with the Jan26 contract expiring and now CME margin increase. China premium is keeping the pressure on though!

EFP spread​

With a current spot price of $113.79, EFP spreads:

Feb26 = -$0.49 vs -$0.75 Yesterday
Mar26 = +$0.19 vs +$0.29
Apr26 = +$0.33

EFP Commentary​

Jan26 is off the board. Feb26 EFP spread is negative, but possibly shifting positive. CME raised margins, so this could shift further negative - at least for a day or two. COMEX withdrawals likely won't stop this week.

China ​

SGE $131.41 (no VAT)
SFE $130.95

SGE (spot) > SFE (futures) by $0.46 (down from $2.01 yesterday). SGE premium to LBMA spot = ~$17.62!

SFE 1.1M ozt (35.9 tonnes)
SGE 49K ozt (1.5 tonnes) last week

India ​

MMTC-PAMP (retail) : $139.98
MMTC-PAMP less 6% import tax and 3% VAT = $127.38
Feb26 [SILVERM 5kg] : $130.59
Mar26 [SILVER 30kg] : $128.89

MMTC-PAMP less taxes < SGE
(Feb26 less 6% tax = ~$122.75) < SFE

SLV Share Lending​

10M Shares available

Borrow fee climbed from 0.56% to 0.71%

SLV share lending getting more active. Available shares dropped to 6.1M overnight (again).

SLV Assets​

Blackrock:4.5M shares
JPM:4M ozt (126.9 tonnes)

SLV raiding intensifying as LBMA spot rises.

PSLV​

Zero units change
Zero ozt change

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio. Are they having trouble sourcing the silver?

Big Picture​

SGE ($131.41)
SFE ($130.95)
Retail (less taxes $127.38)
MCX (less tax $122.75)
spot ($113.79)
COMEX Feb26 (~$113.30)

- Feb26 EFP spread firmly negative
- COMEX(LBMA)
- SLV (LBMA)
- PSLV still needs ~1.3M ozt

ICYMI:​

Last week in silver (in metric tons):

SGE silver vault - 1.5
SFE silver vault - 45.7
SLV London vault - 16.9
PSLV silver vault - 5.3
COMEX silver stock - 349.4
LBMA silver stock - ??? (no daily or weekly data because LBMA is run by dinosaurs)

Global net change (less LBMA):
Jan 19-23 = 374.4
Jan 12-16 = 446.4
Jan 5-9 = 659.7
Dec 29-Jan 2 = 160.6
...

China's SGE reported a surprisingly low outflow for last week - less than 1/10th of the weekly outflow for the previous 3 weeks. Did China receive silver from the LBMA? Maybe. Three data points argue against it though:

1. I saw at least one anecdotal report that the SGE was running at least T+14 for silver deliveries (see below)
2. SGE silver price premium to LBMA spot continues to widen/grow. If the LBMA were delivering (sufficient) silver, I would expect the premium to shrink.
3. SGE (spot) price > SFE (futures) price. That indicates demand for physical supply isn't being satisfied.

To me, it looks like the low outflow, given the SGE market action, supports the claim that the SGE is in technical default on delivering silver to buyers.

After 3 weeks of heavy inflows, PSLV quieted down last week. They have been short >41 tons to maintain their historical units/ozt ratio for over a week now. Are they having trouble sourcing London Good Delivery silver bars? Every 1K ozt they add is a London Good Delivery bar that becomes unavailable to the LBMA for clearing OTC market trades.

Last week marks the 3rd week in a row for the COMEX to drain profusely (over 340 tons). The Jan26 EFP spread was firmly negative all week, so the COMEX draining was expected as bullion banks are likely shipping COMEX silver to London. Jan26 is now off the board and we'll have to see what happens with Feb26 EFP spreads and delivery requests.

SLV actually posted a net inflow for last week, but don't let that fool you. SLV posted a huge inflow to start the week and then the bleeding/raiding started on Jan 21 and hasn't stopped (it's gotten worse so far this week). SLV is the emergency relief valve for the LBMA - raided for its vault stock when the LBMA gets into a pinch. It appears there is significant raiding of vault stock at several silver ETFs that maintain vault stock at the LBMA.

One can only imagine what chaos might be unfolding in the LBMA's London vault system right now. We can only imagine because the dinosaurs at the LBMA do not provide daily/weekly reporting of their vault stock like every other market and major fund in the world.



SGE at ~T+14

All that above, and yet pundits are calling a silver top, and predicting a 50% crash - "almost guaranteed". I'm hanging out, not selling, like very few people, but still not ready to sell. Is "almost guaranteed" like "almost dead" from Princess Bride?

Yesterday (1-28) in silver

Yesterday silver dropped from ~$114 to ~$116, hit $120 overnight before falling to $119 this morning in anticipation of the market open. Below the surface, vaults are hemorrhaging ...

COMEX 1-27​

298K ozt (9.3 tons) deposited mostly in Asahi

3.7M ozt (117 tons) withdrawn from Brinks (410K), CNT (663K), HSBC (300K), JPM (1.3M), MT&B (1M)

4.7M ozt (147.3 tons) moved from [R] to [E] in Asahi (111K), Brinks (1.1M), CNT (3M), HSBC (52K), JPM (247K), MT&B (72K), StoneX (117K)

COMEX Commentary​

Tuesday was Jan26 contract expiration (strongly negative EFP spread) and the withdrawals went ludicrous speed. That's some serious bleeding. If the COMEX were to maintain this withdrawal pace, it would be empty of liquid free float in a few months.

EFP spread​

With a current spot price of $119.77, EFP spreads:

Feb26 = -$1.32 vs -$0.49 Yesterday
Mar26 = -$0.62 vs +$0.19
Apr26 = +$0.14 vs +$0.33

EFP Commentary​

Feb26 EFP spread is strongly negative this morning as expected thanks to the CME margin hike. We'll see how long it lasts. COMEX withdrawals will likely be heavy this week.

China ​

SGE $134.06 (no VAT)
SFE $138.25

Finally SFE (futures) > SGE (spot). SGE premium to LBMA spot = ~$14.29

SFE 847K ozt (26.3 tonnes)

India ​

MMTC-PAMP (retail) : $152.70
MMTC-PAMP less 6% import tax and 3% VAT = $138.96
Feb26 [SILVERM 5kg] : $144.52
Mar26 [SILVER 30kg] : $142.17

MMTC-PAMP less taxes > SGE
(Feb26 less 6% tax = ~$135.85) < SFE

SLV Share Lending​

10M Shares available

Borrow fee dropped from 0.71% to 0.59%

SLV share lending is active again. Stil plenty of shares available to plunder.

SLV Assets​

Blackrock:7.5M shares
JPM:6.8M ozt (211.4 tonnes)

Largest one day drop in vault stock since Oct 15. Jan-tober!

PSLV​

Zero units change
Zero ozt change

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio. Are they having trouble sourcing the silver?

Big Picture​

Retail (less taxes $138.96)
SFE ($138.25)
MCX (less tax $135.85)
SGE ($134.06)
spot ($119.77)
COMEX Feb26 (~$118.45)

- Feb26 EFP spread firmly negative
- COMEX(LBMA)
- SLV (LBMA)
- PSLV still needs ~1.3M ozt

ICYMI:​

vaults are hemorrhaging ...

HEY I have an idea to stop this... Let's make it cheaper.



Brilliant

This was the "everything, everywhere all at once" slam (except for oil apparently?). Conflict with Iran this weekend?

Nah, oil has been programmed by the algo's for some time now to have negative beta to stocks. Been at least a year or more that way

Yesterday (1-29) in silver

Yesterday silver dropped from ~$120 to ~$115, plunged below $100 overnight before recovering to $102 this morning in anticipation of the market open. Below the surface, vaults are still hemorrhaging ...

COMEX 1-28​

Zero ozt deposited

3.4M ozt (106.7 tons) withdrawn from Asahi (1.1M), CNT (684K), JPM (1.3M), Loomis (300K)

1.1M ozt (35.6 tons) moved from [E] to [R] in Asahi (99K), Loomis (1M)

660K ozt (20.5 tons) moved from [R] to [E] in Brinks (290K), CNT (122K), JPM (248K)

COMEX Commentary​

Heavy withdrawals continued Wednesday as expected. Curiously, the amount of silver moving from [R] to [E] diminished a bit.

EFP spread​

With a current spot price of $102.49, EFP spreads:

Feb26 = -$2.55 vs -$1.32 Yesterday
Mar26 = -$0.59 vs -$0.62
Apr26 = -$0.38 vs +$0.14

EFP Commentary​

Feb26 EFP spread shifted to extremely negative this morning while Mar26 held ground and Apr26 shifted negative. Feb26 contract about to be hammered with delivery requests I think. COMEX withdrawals will likely be heavy today.

China ​

SGE $123.21 (no VAT)
SFE $125.04

SFE (futures) > SGE (spot). SGE premium to LBMA spot = $20.72

SFE 866K ozt (26.9 tonnes)

China Note​

China banks increased silver margins to 60%

China Note 2​

SGE raised margins last night as well

India ​

MMTC-PAMP (retail) : $121.35 (less 6% import tax and 3% VAT = $110.43)
Feb26 [SILVERM 5kg] : $124.23 (less 6% tax = ~$116.78)
Mar26 [SILVER 30kg] : $119.45

Feb26 less tax < SFE

SLV Share Lending​

10M Shares available

Borrow fee up from 0.59% to 0.60%

Available shares bouncing around indicates lots of borrowing activity. Still plenty of shares available to plunder.

SLV Assets​

Blackrock:4M shares
JPM:3.6M ozt (112.7 tonnes)

The raiding will continue until vault stock improves

PSLV​

Zero units change
Zero ozt change

PSLV units/ozt ratio sits at .3413. They still need to add 1.3M ozt (41.7 tons) to get back to the historical .3434 ratio. Are they having trouble sourcing the silver?

Big Picture​

SFE ($125.04)
SGE ($123.21)
MCX (less tax $116.78)
Retail (less taxes $110.43)
spot ($102.49)
COMEX Feb26 (~$99.94)

- China margin raises
- Feb26 EFP spread extremely negative
- COMEX(LBMA)
- SLV (LBMA)
- PSLV still needs ~1.3M ozt

ICYMI:​

In the last 4 trading days, silver lease rates have fallen from 3.83% to 1.16%. This indicates that LBMA vault stock is growing plentiful (not scarce). Over that same period:

Vault Stock

LBMA vaulted silver ETFs22.9M ozt (711.6 tons)
COMEX7M ozt (217.4 tons)

All the ETFs drain is LBMA gain. I expect ~95% of COMEX drain is LBMA gain (with a lag for shipping time). LBMA silver vault stock likely up around 900 metric tons from ETFs and COMEX drains for Mon Jan26 - Thu Jan29.

Silver ETFs generally see vault stock grow as spot price rises. It appears that the ETFs are being raided for their vault stock. Why would bullion banks raid silver ETFs for vault stock if the LBMA had sufficient reserves to satisfy demand?

Price Action

Spot rose from ~$103 Jan23 close to ~$115 Jan29 close (with a high ~$120 in the period)
China/SGE premium to LBMA spot rose from $8 to $20

China/SGE premium (and India mirrors China for the most part) indicates that demand is not being satisfied. It seems clear that the LBMA is not delivering sufficient silver to prevent the China/India premiums from rising.

Bottom Line

So the LBMA has growing vault stock sufficient to lower lease rates, but insufficient to close the China/India premium gap. The logical conclusion is that the LBMA OTC market (ie. the LBMA member bullion banks) is (are) not delivering silver to India/China. If only we had some real time import/export data to complete the puzzle!


Silver lease rates Jan30

Silver lease rates Jan24:

So if the LMBA bullion banks aren't delivering silver to China, why not? Or another way, why wouldn't the Chinese buy SLV and PSLV and then demand delivery?