Silver Demand Drivers (and vault totals)

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We do not have normal a normal market with silver. The price is not rising because of investment trading/demand. We are seeing the paper derivative markets breaking down and the beginnings of true price discover for physical silver. Silver is going to squeeze higher before it stabilizes.
 
The Silver manias of 1980 and 2011 both had a point where the charts show the price action going nearly straight up. This did not last long, and the price drops were nearly as steep as the previous rises.

Maybe this time will be different.

For myself, every time silver goes up $10, I take roughly 10% off the table as cash.

...and everytime silver goes down by $10, I increase my holdings in similar fashion.
 
🚨 Today (10-16) in silver

Today saw silver spot climb to a new high at $54. Let's investigate what played out below the surface...

PSLV

Today PSLV added zero units to the trust and 579,580 ozt to the vault. PSLV just continues to increase their vault stock. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.

COMEX

COMEX silver stock report for Wednesday (COMEX reports activity for the previous working day) showed 1.5M ozt (~46.9 metric tons) withdrawn from the Asahi vaults, but only ~548.2K ozt (~17 metric tons) withdrawn overall (net). There were still heavy withdrawals of 3M ozt, but there was also a heavy deposit of ~2.5M ozt. Additionally, Asahi moved ~392K ozt (~12.2 metric tons) from registered to eligible. It seems the Asahi vault is still bleeding its stock (none of the day's deposits were in Asahi). I singled out the action in the Asahi vault because they are listed by the LBMA as a Good Delivery Refinery for silver and I assume that means they can deliver silver back to London with fewer logistical challenges (red tape, costs, etc.) than other actors.

JPM listed zero activity of any kind. This is the third day in a row that JPM reports zero outflow, so maybe they are done sending metal to London? JPM is the custodian for Blackrock's SLV and manages changes to SLV inventory in their London (LBMA) vault. I assume that JPM also can deliver silver back to London with fewer logistical challenges (red tape, costs, etc.) than other actors.

Overall, 1.1M ozt (~35.7 metric tons) of silver was moved from registered to eligible on Wednesday. It seems the COMEX is not quite done shedding vault stock.

SLV

My "canary in the silver mine" might be dead. Today JPM reported zero activity in the bar stock report (no additions or withdrawals), Blackrock reported zero activity with shares (none created or redeemed) and their were zero shares available for borrowing since 7:30AM EDT. Absolutely no activity was reported. I'm wondering if they just went dark on reporting activity? 👀

The borrowing fee remains at 16.22% and the spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) has remained steady at 4.1%.

SFE/SGE

The Oct 16 trading report from this morning indicated the SGE/SFE prices for silver moving up with, but still lagging (at a discount to) the LBMA/COMEX. The SFE silver vault continues to bleed out inventory - shedding another 1.5M ozt (~48.1 metric tons) today.
 
It appears the PM markets are turning into OTC markets and we are trying to find price discovery with silver first. It's much smaller than the gold market.
 
The only shortages I am aware of are 1000 oz bars in London and 2025 silver eagles in the US. The US mint only producing 10 million is pathetic.
Refinery capacity is an issue but eventually it will get solved.
SD bullion and Miles Franklin can both probably deliver 20-40 million in silver if you really wanted it. So 40-80 million total if you have deep pockets and looking to spend. Add in the over priced Apmex and you could probably do another 30 million minimum in silver buys. If the entire US population woke up and decided to buy it would be a problem but so far they are all still asleep and most are broke anyway so cant buy.
 
RED Alert.... Mr Slammy has caused Actual Backwardation on the COMEX.

1760718940907.png

Note that the Oct Contract for immediate delivery is now ABOVE even the most traded contract out in Dec. Looks like it lagged a bit and now is out again. But its real close.
 
Trading closer to the 20 day now. Have to see if 4000 and 50 hold. If not then 3500 and 45 or wherever the 50 day is.
 
🚨 Today (10-17) in silver

Today saw silver spot fall as the CME raised margins 8.5%. Let's investigate what played out below the surface...

PSLV

Today PSLV added zero units to the trust and 242 ozt to the vault (which is likely just a correction to yesterday's inflow). PSLV has been very active of late, but took a rest day today. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.

COMEX

COMEX silver stock report for Thursday (COMEX reports activity for the previous working day) showed 295K ozt (~9.2 metric tons) withdrawn from the Asahi vaults, and ~2.7M ozt (~84.1 metric tons) withdrawn overall. Unlike Wednesday, there were no deposits today. For the first time in many days, Asahi had no silver move from registered to eligible. I singled out the action in the Asahi vault because they are listed by the LBMA as a Good Delivery Refinery for silver and I assume that means they can deliver silver back to London with fewer logistical challenges (red tape, costs, etc.) than other actors.

JPM saw 367.1K ozt (~11.4 metric tons) withdrawn and, like Asahi, no silver moved from registered to eligible. This ends the three day inactive streak. JPM is the custodian for Blackrock's SLV and manages changes to SLV inventory in their London (LBMA) vault. I assume that JPM also can deliver silver back to London with fewer logistical challenges (red tape, costs, etc.) than other actors.

Overall, 753.6K ozt (~23.4 metric tons) of silver was moved from registered to eligible on Thursday. It seems the COMEX is not quite done shedding vault stock.

SLV

My "canary in the silver mine" came back from the dead. Today JPM reported adding 2.4M ozt (74.8 metric tons) to the silver stock while Blackrock reported adding 2.65M shares.

Even though the number of shares available to borrow was plentiful most of the day, the borrowing fee spiked to a high of 20.79%! It has remained near 20% since. The spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) has remained steady at 4.1%.

SFE/SGE

The Oct 17 trading report from this morning indicated the SGE/SFE prices for silver moving up with, but still lagging (at a discount to) the LBMA/COMEX. The SFE silver vault continues to bleed out inventory - shedding another 2M ozt (~62.1 metric tons) today. China is going to need to bid silver up higher if they want silver to flow in from the West.

 
India will need as much as $21 trillion to achieve its climate goals and lift its population out of poverty, according to a draft government plan seen by Bloomberg.
...
By 2070, ... energy supply will grow from 870 million tons of oil equivalent (mtoe) in 2020 to 2250 mtoe in 2070 under a net zero scenario.

The government now sees renewables supplying 65% of its total energy mix by 2070, with nuclear accounting for 11%. Coal would provide just 4%, down from 49% in 2020.
...
... Regardless of climate targets, the country is expected to build out a huge amount of solar and wind power, alongside batteries. “India will rely heavily on electrification,” he said.
...
Click to expand...

 
Cigarlover said:
Trading closer to the 20 day now. Have to see if 4000 and 50 hold. If not then 3500 and 45 or wherever the 50 day is.
Click to expand...
forget the 50 day. The 200 day is like 3200 and 36 or thereabouts. We will correct to the 200 eventually. By that time those levels could be much higher. NVDA isn't trading this far off the 200 day. Metals prices are just insane and from the looks of things that's not going to change anytime soon.
 
🚨 Today (10-20) in silver

Today saw silver spot bounced up and down between $52 and $52.50 for most of the day. Let's investigate what played out below the surface...

PSLV

Today PSLV added zero units to the trust and 1,574 ozt to the vault (which is about a bar and a half). PSLV has been very active of late, but took another rest day today. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.

COMEX

COMEX silver stock report for Friday (COMEX reports activity for the previous working day) showed 300K ozt (~9.3 metric tons) withdrawn from the Asahi vaults, and ~4.2M ozt (~132 metric tons) withdrawn overall. The vault system was quite busy Friday as they also received 1.2M ozt (~39 metric tons). For the second working day in a row, Asahi had no silver move from registered to eligible. I singled out the action in the Asahi vault because they are listed by the LBMA as a Good Delivery Refinery for silver and I assume that means they can deliver silver back to London with fewer logistical challenges (red tape, costs, etc.) than other actors.

JPM reported no withdrawals or deposits, but moved 70K ozt (~2.2 metric tons) from registered to eligible. JPM is the custodian for Blackrock's SLV and manages changes to SLV inventory in their London (LBMA) vault. I assume that JPM also can deliver silver back to London with fewer logistical challenges (red tape, costs, etc.) than other actors.

Loomis was the big loser on Friday with 3M ozt withdrawn and none deposited. Overall, 290.8K ozt (~9 metric tons) of silver was moved from registered to eligible on Friday.

SLV

My "canary in the silver mine" signalling slightly less supply stress in London. Today JPM reported adding 8.7M ozt (272.3 metric tons) to the silver stock while Blackrock reported adding 9.65M shares.

The number of shares available to borrow breached 1M today, so maybe that explains the difference between the new shares and new silver stock. The borrowing fee rose to a high of 20.33% before falling down to 16.23%. The spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) has remained steady at 4.11%.

SFE/SGE

The Oct 20 trading report from this morning indicated the SGE/SFE prices for silver moving up almost to par with the LBMA/COMEX. The SFE silver vault continues to bleed out inventory - shedding another 2M ozt (~64.2 metric tons) today. China is going to need to bid silver up higher if they want silver to flow in from the West.

 
pmbug said:
If I understood correctly, China needed to import ~50% of their silver demand in 2024 - to the tune of 4,769 tons. If industrial demand grows by 1,500T in 2025 (and knowing that silver production and scrap recycling capacity do not scale with increased demand, that's roughly 6,200 tons of silver they need to import in 2025 (or eat up domestic surplus stock).

It puts into perspective the SFE/SGE silver vault drain that we've been seeing since July. At some point China is going to need to bid up the price of silver as they face a local silversqueeze.
Click to expand...

 
This is a completely fake paper market dip. I looked around to dry and see if I could buy the dip. Platinum was $150 premiums for even generic bars. Silver is the same way or worse. Generic Buffalo rounds are still $52.

Then you have OI still expanding in Oct contract.
1761059272161.png
 
🚨 Today (10-21) in silver

Today silver spot got monkey hammered. Let's investigate what played out below the surface...

PSLV

Today PSLV added zero units to the trust and 100K ozt to the vault. Looks like PSLV managed to find some silver for the first time in 3 days. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.

COMEX

COMEX silver stock report for Monday (COMEX reports activity for the previous working day) showed no activity at all in the Asahi vault and just a paltry 28.7K ozt (~0.9 metric ton) moved from eligible to registered in the JPM vault. All the 2.6M ozt (~82 metric tons) withdrawal action on Monday happened in the Loomis, HSBC and CNT vaults. On Monday there was a mix of silver moving between registered and eligible with a net 636K ozt (~19.8 metric tons) moved from registered to eligible.

SLV

My "canary in the silver mine" showed continued signs of easing stress in London as the number of shares available to borrow seemingly remained plentiful all day (but are now presently back to zero) and the borrowing fee has fallen to 9.25%. The spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) has remained steady at 4.11%.

I had expected JPM and Blackrock to report more shares created and silver added to the vault, but instead JPM reported a loss of 3M ozt (~93.1 metric tons) to the silver stock while Blackrock reported a loss of 3.3M shares. Unlike the last time SLV added 8M+ ozt in a day only to lose it all the next day, today it only lost about a third of yesterday's huge addition. It would seem that the rumored 1,000 tons of silver flown to London from New York and China are restoring some liquidity in the LBMA market.

SFE/SGE

The Oct 21 trading report from this morning indicated the SGE/SFE prices for silver are now at a premium to the LBMA/COMEX. The SFE silver vault reported a massive 3.4M ozt (~106.5 metric tons) loss today. We'll see if China maintains a premium to LBMA/COMEX and if that stems the vault stock outflow.

 
🚨 Today (10-22) in silver

Today silver spot got double tapped by the monkey hammer. Let's investigate what played out below the surface...

PSLV

Today PSLV added zero units to the trust and zero ozt to the vault. I think PSLV still needs to add more ozt to back recently created units. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.

COMEX

COMEX silver stock report for Tuesday (COMEX reports activity for the previous working day) showed no activity at all in the Asahi vault, but a withdrawal of 648K ozt (~20.2 metric tons) from the JPM vault as well as 15K ozt (~0.5 metric ton) moved from eligible to registered to eligible (partially reversing Monday's category move).

Overall, another 2.8M ozt (~88.2 metric tons) were withdrawn from Loomis, JPM and CNT vaults. Additionally, 1.8M ozt (~57 metric tons) moved from registered to eligible. The EFP spread between COMEX futures and London spot has shrunk (~ -0.54 as of the moment - down from -$2 recently), so we should expect that tomorrow's report for today's activity should show withdrawals diminishing if the silver is just being moved by profit motive alone.

SLV

My "canary in the silver mine" was a bit of a conundrum today. Shares available to borrow increased hugely all morning to a peak of 4.6M (but has now shrunk to 2.6M) while the borrowing fee has fallen to 6.13%. The spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) has remained steady at 4.11%.

The conundrum is that while available shares to borrow increased by 4.6M, JPM reported a loss of 2.5M ozt (~79 metric tons) to the silver stock while Blackrock reported a loss of 2.8M shares in the trust. In the recent past, large additions of available shares to borrow mirrored Blackrock creating new shares. That was not the case today.

SFE/SGE

The Oct 22 trading report from this morning indicated the SGE/SFE prices for silver remained at a premium to the LBMA/COMEX. The SFE silver vault reported another large 1.8M ozt (~57.7 metric tons) loss today. China will need to maintain prices at a premium to the West if they are to stop the vault stock from bleeding out.

 
🚨 Today (10-23) in silver

Today silver spot treaded water. Let's investigate what played out below the surface...

PSLV

Today PSLV added zero units to the trust and 289 ozt to the vault (likely just an accounting adjustment). I think PSLV still needs to add more ozt to back recently created units. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.

COMEX

COMEX silver stock report for Wednesday (COMEX reports activity for the previous working day) showed no withdrawals in the Asahi vault, but 572.8K ozt (17.8 metric tons) moved from registered to eligible. There was a withdrawal of 642K ozt (~20 metric tons) from the JPM vault.

Overall, another 3M ozt (~94.7 metric tons) were withdrawn from various vaults. Additionally, 812K ozt (~25 metric tons) moved from registered to eligible. The EFP spread between COMEX futures and London spot has shrunk (~ -0.40 as of the moment - down from -$0.54 yesterday), so tomorrow's report for today's activity might show withdrawals diminishing if the silver is just being moved by profit motive alone.

SLV

My "canary in the silver mine" had another mixed signals day. Shares available to borrow continued to bounce around between 2M and 4M all day while the borrowing fee fell to 3.26%. The spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) has remained steady at 4.11%.

JPM reported a loss of 3.6M ozt (~112.9 metric tons) to the silver stock while Blackrock reported a loss of 4.55M shares in the trust. In the recent past, large additions of available shares to borrow mirrored Blackrock creating new shares. That was not the case today for the second day in a row.

SFE/SGE

The Oct 23 trading report from this morning indicated the SGE/SFE prices for silver remained at a premium to the LBMA/COMEX. The SFE silver vault reported another 910K ozt (~28.3 metric tons) loss today, but that is about half of the daily outflow or recent days. China will need to maintain prices at a premium to the West if they are to stop the vault stock from bleeding out.

 
🚨 Today (10-24) in silver

Today silver spot mostly treaded water again after a little boost when the DXY fell. Let's investigate what played out below the surface...

PSLV

I'm composing this before PSLV has published their Friday data. I am not expecting any big numbers here, but I'll post an update below if I'm wrong when the report is available.

COMEX

COMEX silver stock report for Thursday (COMEX reports activity for the previous working day) showed no activty at all in the Asahi vault. There was a withdrawal of 673K ozt (~20.9 metric tons) from the JPM vault and another 696K ozt (~21.6 metric tons) from CNT vault.

Overall, another 1M ozt (~32.1 metric tons) were withdrawn (net after 392K ozt (12.2 metric tons) deposit in StoneX vault). Additionally, 293K ozt (~9.1 metric tons) moved from registered to eligible.

The EFP spread between COMEX futures and London spot has shrunk (~ -0.19 as of the moment - down from -$0.40 yesterday), and we are starting to see the withdrawn/outflow from the COMEX diminish. Thursday's 1M ozt outflow is about one third as much as the daily outflow over the last two weeks. For now, it looks like the COMEX gave the LBMA ~35M ozt (~1,086.3 metric tons) of its silver ocean back since October 3.

SLV

My "canary in the silver mine" had another mixed signals day. Shares available to borrow continued to bounce around between 2M and 4M all day while the borrowing fee fell to 2.92%. The spread between the rebate fee (what brokers pay shareholders to borrow shares) and the borrow fee (what brokers charge to lend shares) had remained steady at 4.11% for most of the last two weeks, but today it moved. The rebate fee flip flopped between negative and positive several times before settling as positive (see SLV update below for more detail). Bottom line - it appears that shares are no longer hard to borrow.

JPM reported a loss of 2M ozt (~64.9 metric tons) to the silver stock while Blackrock reported a loss of 1.75M shares in the trust. This was the third day in a row for waning shares and vault stock.

SFE/SGE

The Oct 24 trading report from this morning indicated the SGE/SFE prices for silver remained at a premium to the LBMA/COMEX for the 3rd day in a row and as a result, the SFE reports the first (tiny) inflow since the Golden Week holiday began at the end of September.


SLV update:
 
Last week in silver:

SGE silver vault - loses 145.4 metric tons
SFE silver vault - loses 255.1 metric tons
SLV London vault - loses 77.6 metric tons
PSLV silver vault - adds 3.1 metric tons
COMEX silver stock - loses 432.6 metric tons
LBMA silver stock - ??? (no daily or weekly data because LBMA is run by dinosaurs)

Global net change (less LBMA and SGE):
Oct 20-24 = -907.6 metric tons
Oct 13-17 = -640 metric tons
Oct 6-10 = -310.9 metric tons
Sep 28-Oct 3 = +92.5 metric tons
Sep 22-26 = +407.5 metric tons
Sep 15-19 = -41.5 metric tons
Sep 8-12 = +124.81 metric tons
Sep 1-5 = +2.45 metric tons
Aug 25-29 = +409.75 metric tons
Aug 18-22 = +230.8 metric tons
...


I started doing some daily updates this month and neglected to post these weekly views. I think they offer an important perspective though, so I'll resume them.

The LBMA apparently ran dry last month amongst massive demand for physical silver from India and the bullion banks are doing their best to return the silver ocean back from NYC to London to meet that demand. We can see massive drawdowns in the vault stock of every player (excepting PSLV which does not feed the LBMA). We assume the lion's share of the drawdowns were sent to London, but we can't know for sure because the LBMA does not provide any transparency to their operations or vault stock on a daily or weekly basis. This might change in the future as the dinosaurs at the LBMA are finally starting to get embarrassed (see below for more details).

The COMEX accelerated massive outflows last week. After a mid-week slow down, they posted a huge outflow on Friday. This in spite of the fact that backwardation and EFP spreads are normalizing (reducing any profit motive/arb for moving silver to London). We should be seeing a slowdown in the COMEX withdrawals (for shipping to London), but it isn't evident yet.

In spite of new share creation and corresponding silver addition to the vault, SLV ended up with a net loss to their vault stock for the week. It was a pretty wild week for SLV with shares available to borrow finally becoming available near the end of the week as the vault stock drained. Does this signal adequate vault stock in the LBMA to fulfill OTC trading obligations? It would seem so for now.

PSLV has been steadily adding silver to their vault stock week after week in October. Every LGD bar that PSLV acquires is 1,000 ozt that is not available to global free float for trade settlement.

The SFE and SGE (China) have reported massive outflows throughout October. Did the metal go to domestic use, or flow to London? I've read mixed comments on the issue. But the SGE has just started within the last few days trading at a premium to the LBMA, so we'll see if the SGE outflows wane now.

The LBMA's monthly vault stock "report" is due on November 7. I expect they will show a massive inflow of silver (on the order of 1,500+ tons) although how much of it was absorbed by ETFs will remain to be seen.

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.



LBMA transparency?
 
🚨 Today (10-27) in silver

Today silver spot took a beating from CME margin raises and Mr. Slammy in the morning and then mostly treaded water again. Let's investigate what played out below the surface...

COMEX

COMEX silver stock report for Friday (COMEX reports activity for the previous working day) showed a massive 3M (96 metric ton) withdrawal in the Asahi vault. There was no withdrawal from the JPM vault and another ~602K ozt (~18.7 metric tons) each from from CNT and HSBC vaults.

Overall, another 4.4M ozt (~136.5 metric tons) were withdrawn. Additionally, 563K ozt (~17.5 metric tons) moved from registered to eligible.

The EFP spread between COMEX futures and London spot has shrunk (~ -0.02 as of the moment - down from -$0.19 Friday). We should be starting to see the withdrawn/outflow from the COMEX diminish, but that isn't what happened Friday. Thursday's 1M ozt outflow looks to be an anomaly as the outflows resumed in force on Friday.

SLV

My "canary in the silver mine" had another mixed signals day. Shares available to borrow started the day at 2.1M and just continued to shrink all day down to a low of 25K, but now back up to 50K, while the borrowing fee fell to 2.26%. The borrow and rebate fees did not move very much today even as available shares approached zero. I suspect we will see more fireworks in this data before the week is through.

JPM reported a loss of 2.5M ozt (~79 metric tons) to the silver stock while Blackrock reported a loss of 2.8M shares in the trust. This was the fifth day in a row for waning shares and vault stock.

SFE/SGE

The Oct 27 trading report from this morning indicated the SGE/SFE prices for silver remained at a premium to the LBMA/COMEX for the 4rd day in a row, however, the SFE still reported a moderate outflow. Was Friday's inflow a fluke? China needs to bid up the price of silver higher to compete for the West's silver ocean.
 
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