LBMA Acknowledges “Buying Frenzy” in Silver Market And Silver Shortage Fears

• LBMA Acknowledges “Buying Frenzy” in Silver Market And Silver Shortage Fears
  by Ronan Manly, https://www.bullionstar.com/
  The London Bullion Market Association (LBMA) has just published a new report titled “Silver Investment 2021: Report” which looks at recent developments in the investment silver sector.
  –
  While it’s not clear who actually wrote the report, as no author is specified, the LBMA states that it “acknowledges Metals Focus’ contribution to this report” so we can assume Metals Focus actually wrote it or was heavily involved. Metals Focus is a precious metals consultancy based in London, which also at times, writes the Silver Institute’s annual World Silver Survey.
  –
  That the LBMA has decided to publish a specific report on investment silver at this time is notable in itself (as it hasn’t published this type of distinct report in the past), but beyond this, the report itself is worth reviewing for what it says, as much as what it leaves out.
  –
  Pitched as a “Spotlight on Silver Investment, a report which explores the key developments in silver investment over the last 12-18 months”, the LBMA report (which is quite short at 15 pages) focuses on recent trends in demand for silver Exchange-Traded Products (ETPs), silver coins and bars, and the in silver futures market. It also surprisingly mentions the #Silver Squeeze in great detail, which is refers to the “much-publicised social media campaigns” and a “social media buying frenzy” of silver bars and coins, and silver ETPs.
  –
  The report begins by commenting that “the past 12-18 months have witnessed some incredible developments in the silver investment market, including a dramatic improvement in investor activity”, and that the combined demand from silver bars, coins, ETPs and futures positioning rose by about 20% in 2020, with the growth in this trend carrying over into the first quarter of 2021.
  ….
  Surprisingly, the LBMA report acknowledges that strong inflows into silver-backed ETFs in late January and early February, if they had persisted, could have led to the LBMA London vaults running out of acceptable (good delivery) silver bars for the ETFs. The LBMA report states that:
  –
  “Early 2021 saw an unprecedented 110Moz added in just three days. Although some liquidations emerged, there were concerns that London would run out of silver if ETP demand remained at a high level.”
  –
  and
  –
  “this year, the location of the custodial vaults has come into sharper focus as ETP demand has jumped, leading to concerns about the potential availability of metal.”
  –
  This is something I had highlighted in a BullionStar article on 8 February titled “Houston, we have a Problem”: 85% of Silver in London already held by ETFs” which concluded that:
  –
  “A few more days of inflows like the ones seen over 29 January to 2 February would be a major emergency for these ETF providers, particularly the iShares SLV. Because there is just not that much physical silver left in the vaults of JP Morgan, Brinks, Malca-Amit, Loomis and HSBC, which is not already reported as being in these ETFs.”
  –
  read more.

end