COMEX Silver Vault Inventories Continue to be Depleted

Last week began with a big rally in the daily silver prices, up nearly +9% this past Monday alone.

You have to look back to late 2008 silver price action, as the first round of quantitative easing began by the fiat Federal Reserve to see a one-day positive percentage move of similar size. 

In our update this week, we will update a few key silver market inventory points after we show a clip of how CNBC in India covered this positive silver price action late last week. 

Silver in fiat rupee terms is not far from its all-time nominal record high. The same can be said about gold in fiat rupee terms in India. 

Gold on an Indian price chart is becoming "unaffordium" if you will, and thus we see supposed “poor man's gold” silver getting a massive ongoing import bid in India. The populous eastern nation is likely to break its 2015 silver bullion import record number by the end of this year, 2022.

The reported COMEX registered silver inventory pile dipped again this week, nearly breaking below 40 million ounces. The combination of deliverable registered and non-deliverable eligible piles is now just over 312 million ounces at the end of last week.

London silver warehouse pile continues to shrink to the lowest level on record. The data was updated today through the end of last month, September 2022. 

It shows City of London silver vaults lost -45,166,000 troy ounces last month alone (picture mass quantities of 1,000 oz silver bars stacked on wooden shipping crates headed to India). For context, that is a silver hoard larger than the currently reported COMEX Registered category of 40,150,447 troy ounces.

Since the start of the #SilverSqueeze movement in Q1 2021, over -317,000,000 oz of reported silver bullion has left the combined London and COMEX silver warehouses. Silver industry data illustrates western investors and India have gotten their fair share of that vanishing silver pile.

The vast majority of reported silver in City of London bank depositories is already spoken for unsecured ETF silver. The USA’s COMEX exchange also counts large numbers of silver ETF metals within its eligible silver depository figures. The amount of silver bullion that could actually be pulled from either system is much tinier than the world is led to believe.

The amount of silver float in London (silver not owned by ETFs) when this chart gets updated might be less than 10,000 metric tonnes. A sum that is not much larger than what India alone will import in this year 2022.

The spot silver price closed last week just over $20 oz, and the daily gold prices finished just below $1,700 oz for the week's trading.

The gold-silver ratio fell slightly to close at 84 for the week dipping as low as 81 early in the week.

Despite the underlying fundamental bullishness for silver, market commentators and consultancy Metals Focus released a short-medium-term silver bearish note this week. Stating their belief that silver and gold spot prices in fiat US dollar terms still face headwinds to close this year as the fiat Federal Reserve looks to raise their federal funds rate again this month. Driving what they expect will be further relative strength in the fiat US dollar to come.

In terms perhaps one of the biggest risks underlying the global financial system at the moment has become the potential failure of major commercial bank names in Europe.

Credit default swap rates are climbing on major European bank names, reflecting the increasing amounts of insurance being bought in case the likes of Credit Suisse, BNP, Deutsche Bank, or UBS flat fail.

The Bank for International Settlements Financial Stability Board defines all four banks as Global Systemically Important Bank names. If any of these names failed, the amount of contingent derivative bet contagion could freeze the entire global financial system.

In late 2014, the G20, the world's largest twenty economies, signed supranational laws stating that the next banking failure crisis will not be met with bank bailouts but bank bail-ins (unsecured bank depositors and unsecured creditors being at major risk of forced losses in that case). 

We made the following video on this real ongoing threat of bank bail-ins in late 2019, these bank bankruptcy laws are still on the books.

EMBED VIDEO: https://youtu.be/cnBPnLJzdYk

It is ongoing underlying fundamental facts like these that are driving more investors worldwide, from India, China, the EU, and North America, to increasingly become their own banks by owning prudent stashes of bullion outright outside of the financial system.

Ongoing bullion industry data illustrates that this trend only appears to increase as the months and years progress.

That is all for this week's SD Bullion Market Update.

As always, to you out there, take great care of yourselves and those you love.

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James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...