The Daily Drum-Beat Of Silver Withdrawals From London & Surging London Silver Lease Rate Signal Crisis

... Kryptonite For Leveraged London Paper Cash Silver Market

Following-up on yesterday’s post noting that the London silver market implied lease rate yesterday surged to 5.5%, keep in mind that we’ve recently seen that the actual London lease rate for gold was almost 2x higher than London gold’s implied lease rate.

The potential is that there is an extraordinarily intense physical squeeze developing in the London silver market.

In addition, yesterday’s CME COMEX data indicate that on March 5, 2025 another 1,046 Exchange For Physical (EFP) contracts traded equating to another 5 million (M) oz. of silver that can be drawn from the London silver market vaults.

Figure 1- March 5, 2025 CME COMEX Trading Data; source: CME COMEX

COMEX New York Vault data show that since the start of December 2024, a total of ~105M oz. of silver have been deposited in New York (NY) COMEX vaults with an unknown additional amount of silver being deposited in other private vaults. The daily build of silver in NY vaults has been unrelenting.

There is a 30 day to 45 day transit by ship from London to New York vaults so there is thus potentially still a material amount of silver in transit flowing to the US.

Figure 2 - CME COMEX silver vault stockpiles; source: GoldChartsRUs.com

We await LBMA London silver vault data to indicate vault silver stocks held in London at the end of February 2025, however the rolling and aggressive daily transfer of silver to visible US vaults as well as the spike in London silver’s implied lease rate sends us an ominous signal as to the health of the leveraged London cash/spot silver market.

With January 1, 2025 estimated standing claims (open interest) of 5 billion (B) oz. of silver in the extremely leveraged London cash/spot silver market and a continuing daily appetite for US importation of silver, the situation does not auger well for the world’s most intensely leveraged cash silver market.

When you create an immediate ownership cash physical metal exchange and sell billions of ounces of silver into that market as promissory notes with only a small fraction of that silver available to market to immediately settle such claims, you are asking for trouble - and London now appears to have that in spades.

Best regards,

David Jensen