Stand Aside JP Morgan, A New Player In The Silver Market Has Arrived

Tyler Durden's picture


The days of JP Morgan controlling the silver market may be numbered as a new player in the silver market has arrived.  For the past several years, JP Morgan held the most silver on a public exchange in the world.  While the LBMA may hold (or did hold) more silver, their stockpiles are not made public.

Regardless, JP Morgan held the most silver at nearly 74 million oz (Moz) in its warehouse, up until recently.  Over the past two months, JP Morgan’s silver inventories have fallen nearly 7 Moz to 67.1 Moz today:


As I mentioned in my previous article, Why Are The Chinese Stockpiling Silver? Big Move Coming?, JP Morgan increased their silver inventories from 4 Moz in April 2011 to 69.4 Moz April 19, 2016.  However, the Shanghai Futures Exchange silver inventories surged from 7.5 Moz in August 2015 to 54.7 Moz on April 19, 2016:


Basically, JP Morgan added an average 16.3 Moz of silver each year for the past years, whereas the Shanghai Futures Exchange added nearly 7 Moz per month.  Furthermore, the majority of gains came since the beginning of 2016.  Again, here is my previous Shanghai Futures Exchange silver stock chart from the article linked above:


As we can see from this chart dated April 19th, the Shanghai Futures Exchange more than tripled their silver inventories since November 2015.  What is even more interesting is the continued buildup over the past two weeks.  Here is an updated chart based on data for May 3rd:



Over the past two weeks, the Shanghai Futures Exchange added another 179 metric tons (mt) or 5.8 Moz.  Now, if we update the JP Morgan and Shanghai Futures Exchange silver stock chart (from above) we have the following:


Here we can see that JP Morgan’s total silver inventories have declined from 69.4 Moz to 67.2 Moz, while the Shanghai Futures Exchange silver stocks have increased from 54.7 Moz to 60.6 Moz.  If the Shanghai Futures Exchange continues to add silver at this rate, it will surpass JP Morgan in a two to three weeks.

Comex Registered Silver Inventories Drop Nearly 4 Million Ounces Yesterday

When the CME Group published the recent silver inventory change on the Comex yesterday, nearly 4 Moz were transferred from the Registered to Eligible Category.  The majority of the transfer came from the CNT Depository at nearly 3.5 Moz with 485,325 oz from HSBC:


Some analysts say these transfers really don’t mean much if the overall inventories stay the same.  That may be true, but there was some reason the CNT Depository transferred 3.5 Moz of silver from their Registered Inventories to the Eligible.

That being said, the Chinese are adding a lot of silver to their Shanghai Futures Exchange warehouses.  The build from 7.5 Moz in August 2015 to over 60 Moz of silver in the beginning of May puts JP Morgan’s four-year inventory growth to shame.

For whatever reason, silver inventories at the Shanghai Futures Exchange warehouses are increasing at a rapid pace while the Comex silver stocks continue to decline.  Comex silver inventories were over 180 Moz in July 2015 and are now only 151 Moz.  This is quite interesting as the Shanghai Futures Exchange inventories started to build from 7.5 Moz in August 2015 to the 60.6 Moz today.

It will be interesting to see how the exchange inventories and price action of silver play out over the next several months.

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nuubee's picture

The most blatant crime against humanity in history was removing silver as money.

Silver Shield's picture

The greatest gift is paper manipulated physical silver stacking.

Any day you can trade generational, debt based, Ponzi promissory notes for cold, hard, eternal physical silver is a good day!

Joe Cool's picture

Agree...I don't look at price drops in a negative light...

jakesdad's picture

if my nirp/bailin insurance premium drops how is thia a bad thing?

old naughty's picture

meet the new king (of manipulation),

same as the old...

Theosebes Goodfellow's picture

~"If the Shanghai Futures Exchange continues to add silver at this rate, it will surpass JP Morgan in a two to three weeks."~

That promises to make the end of May very interesting in silver futures market, I would think. Yippy-Kai-Yay, mothertruckers!

Long yuan silver, bitchez!

BigJim's picture

You will if you need to sell your shiny to buy some essential like food/electricity/gasoline. Then you'll wish the price was considerably higher than what you paid for it.... or, at least, equal after inflation.

Joe Cool's picture

If possible...Only spend $ for metal that you will not need for other purchases...I know it's hard sometimes but patience is the "magic" word

BigJim's picture

People preserve capital for the future because their future incomes are uncertain.

If things go South and you use up your cash savings, you need to start dipping into your other capital reserves. And if silver is one of those capital reserves, chances are, if you bought in the last 6 or 7 years, that you have lost capital.

Joe Cool's picture

It's a tricky balence BigJim...Understood...

Haraklus's picture

Diversification is key. In general, I'd say buy the thing that seems relatively cheapest as a form of capital preservation -- there's always something. Silver and gold are far below their 15-year highs, stocks and RE are essentially at their 15-year highs. In 2010ish, it was mixed but leaning more towards cheap stocks and real estate and expensive PMs.

If you can be a disciplined buyer and focus on what's getting uncharacteristically cheap now, and only sell it when you need it or for other assets that are uncharacteristically cheap, you will generally come out ahead. If you have 1/3 stocks, 1/3 RE, 1/3 PMs, chances are one of them has recently outperformed, and one of them has recently underperformed. If you find yourself needing to withdraw capital to cover expenses, liquidate the overperformers before the underperformers. It's really that simple (most of the time).

Silver Shield's picture

Here's a novel idea... Why not exchange value for value? Why do we need to ever sell for dollars. People will trade for silver if you give them the option.

BigJim's picture

FFS, they'll trade your bullion for whatever the dollar price is. If the spot price is less than what you paid you've still lost capital.

Kaiser Sousa's picture

no u r obviously entrapped in the debt coupon dollar matrix...

when u buy Silver & Gold the only thing u loose r worthless pieces of green CONfetti...

the MoneyCHangers have u...

so sorry.

The Beam's picture

No Big Jim is right (in the short term)

His statement is that if you used  up your dollars, you then need to start liquidating other assets. Whether it be stocks, bonds, art, OR PRECIOUS METALS...etc etc etc. If you have to liquidatethe precious metals today, that you bought in the last few years, then you have lost capital. Now I would exhaust all options before liquidating any portion, but emergencies do happen.

In the long term, Precious Metals have held up to inflation very well historically speaking.

My advice, keep what fiat currency you need and keep most of it in a personal safe. Use credit unions instead of banks and use them to make the necessariy payments. From there start a rainy day fun mixed in cash AND metals. Extra Cash should go straight into inflationary protection.

Remember... even in the Matrix Movie, after taking the red pill, you still have to go into the matrix from time to time.

Herd Redirection Committee's picture

Yes, but this is why you buy physical, and not options.

Why you buy physical WITH CASH, not leverage.

And why you need to keep earning fiat...  Because IT is CURRENTLY legal tender!

The Beam's picture

You have NO ARGUMENT from me on this statement... even a up-vote.

People have to understand that the dollar is means to the end (buying inflationary protection).... and NOT the end means it self.

Options versus physical, in the realm of precious metals, is a fool's game

ClowardPiven2016's picture

For me...the day that I NEED to trade silver will follow the time when the dollar's purchasing power has eroded. That's why I hold preserve my wealth in a tangible asset with no counterparty risk.

detached.amusement's picture

precisely....until such time as shiny is priced realistically to paper, we'll be using paper and stacking shiny.  it doesnt make sense to part with even a gram of it before such time.


Joe Cool's picture

That day will come...The masses haven't been screwed enough yet to make it visible...But don't worry...It will come...

Cloud9.5's picture

When I get to the point that I am buying supplies with silver, fiat will have died leaving silver and gold as the medium of exchange.

zorba THE GREEK's picture

Wow! The Shanghai Exchange has 2400 x the silver as Zorba.

Silver Shield's picture

Almost in ton stacker club I see! Good job!

LoneStarHog's picture

Why does anyone believe that the ONLY reports NOT manipulated are the COMEX inventories?...I call ANYTHING published by the CFTC and COMEX as BULLSHIT and cannot be relied upon as accurate and/or truthful.

mbutler101's picture

agreed...i always thought it funny that people pour over these reports and accept them as gospel.

Kaiser Sousa's picture

what up Chris...hope all is well...

the Fruad this week has been rather spectacular wouldnt u say...

dont u think it strange that Shanghai hasnt exerted a little more resistance to the bullshit in Londone & New Dork...


Silver Shield's picture

I am good and hope all is well with you.
Honestly I don't even think or care about spot price anymore.
As soon as you measure your wealth in ounces you are free from their main weapon.
I am always long silver even though I sell lots of it.
I see no need for short selling in physical commodities other than manipulation.

Kaiser Sousa's picture

i hear u..

just wonder if u had any thoughts on the SGE relative to market influenc going forward...

be well man.

assistedliving's picture

For whatever reason, silver inventories at the Shanghai Futures Exchange warehouses are increasing at a rapid pace.  

Whatever reason?  

SDR is acomin, lead by China, and Ag will be a part of it.

Innominate's picture

How are they going to get people/nations to accept a PM-backed SDR when they could just go for the PMs instead?

Canadian Dirtlump's picture

I agree with you factually of course. Even as a kid born in 1974, I think back and say, how many silver coins passed through my hands when raiding my parent's piggy bank to play karate champ or super sprint, or buying shit at the comic shop.

From a practical standpoint I guess we have to wait until the system breaks until this manifests itself properly. I'm glad to see some movement in the metals, but at this point they seem back under control. Admittedly until when they're not anymore. It seems that a new bunch of metal bugs are calling for the imminent moonshot ( based on the never ending hopium articles ) and calling anyone who disagrees "paid shills" but we'll see.

At this point it is comforting that I don't have to to a fukkin thing to prepare for a metals moonshot. I've averaged down and am in the black with more of a stack ( admittedly at the bottom of ridge reservoir in alberta canada thanks to my poor judgement in canoing partners ) than I ever thought I'd have.

So if I was smart I'd have a Smaug style hoard of "junk" silver. I'm not smart though so plan b is a stack of bulleeeeyon.

tmosley's picture

I disagree. I love silver and think it is a great investment, but due to the introduction of industrial applications of silver, I don't think it is good money any more. Hoarding money in a vault should never hurt industry. Industrial use of money should be temporary, and not destructive (most gold used in industry is recycled, most silver is destroyed/spread to the point it is uneconomical to recover).

Silver will always be money (at least until we can freely transmute elements), but it isn't the BEST money. That is gold for now, and perhaps crypto in the future.

BandGap's picture

You have to wait and see what is in the reset to understand what the reset means (Nansi Pulloosely). This includes what the definition of "money" will be.

We're all placing out bets against the paper mountain but the outcome is hardly predictable.

SumTing Wong's picture

I've decided against being a metal snob. I store value in many different kinds of metals. Some is gold, more in silver, and then even more in brass, lead, copper, and some steel cased stuff too. You have to be prepared to defend your stack if it becomes necessary.

(And, yes, we have the food and water issues handled multiple ways.)

nuubee's picture

I'm not sure how you can disagree that silver is money if the money-centers, the organizations that hoard money, are hoarding silver. That strongly undermines your argument, to be honest.

Mediocritas's picture

He isn't saying it's not money. He's just saying it's not the best money.

lasvegaspersona's picture

We, the People, always clamor for easier money. We want our lives to be easier and our debts to be easily repayed.

Inside of each of us is also a saver however. We want our money to be 'hard', to never lose value. We know when we are old and on a fixed income, if money is inflated we will have less ability to live as we did before.

This struggle has been going on as long as we have had currency and probably longer.

Governments are always debtors so we can be sure they will always opt for inflation.

What is needed is a solutin that keeps both of our urges happy. We need a way to keep savings secure and yet keep governments functioning (if you are collecting Social Security you'll agree).

Fofoa gave this some thought in 2010

nuubee's picture

Thank you for that link, that was all new material to think about for me.

655321's picture

There are many more serious have to be kidding.

Argenta's picture

I have a hard time this much physical silver exists in these two vaults.


Innominate's picture

Yes. With both China and the western banks we've had multiple cases of supposedly full warehouses being empty in reality once someone actually checked. Everything is just made up numbers now.

zorba THE GREEK's picture

With the U.S. Yes, with China , probably not. In prospective, it really isn't
as much as it sounds,( see my previous post ) multiply those amounts
by the price of silver and it is not a lot of $ in the grand scheme

overqualified's picture
it's a Schrödinger-thing
Gilnut's picture

JPM versus China.   Let's see who wins.   :)

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Gilnut May 4, 2016 10:08 AM

Financings makes the world go round.  Look at all those P2P lenders and small business lenders.  When it benefitted the banks to have them around they allowed them to operate, now one by one the online lenders are getting their back broke as the banks cut them off to investors willing to buy up their shitty loans.  House always wins.

Silver Shield's picture

Silver stackers will be the ultimate winners in terms of returns.
Both China and the US will lose plenty when their currencies collapse.
Just keep stacking and wait for the dust to settle.

Dr. Engali's picture

Nice how they were able to keep a cap on the silver price while China has been loading up. Nothing like giving the store away to your major competitor, just so you can put yourself out of business. 

SoilMyselfRotten's picture

Exactly, which is why it may make more sense that it's China using paper PMs(which i'm sure they own a shitload) to keep the phyzz price in check for its own purchases. I'm sure our guv has no problem with it as long as they both get what they want out of the manipulation. But that's of course just one of many a theory.