04 May 2015

Silver investors corner the market, not JP Morgan

Have a post up on GoldCore's Friday article asking whether JP Morgan was cornering the silver bullion market, noting their Comex warehouse stocks of 55 million ounces and claims by Ted Butler that they “may be holding as much as 350 million ounces of physical silver.” My short answer: I don’t think so. Investor interest in silver in the face of falling prices is a global phenomenon, not a JP Morgan one.


  1. It's easy for fools to confuse JP Morgan the Bank with JP Morgan the warehouse, and for the muppets who follow Harvey Organ to confuse Registered inventory with "House" accounts in the delivery Notices. If you want to understand what REALLY happens on COMEX, consider the case of Brinks, which does not trade for its own "House" account (it doesnt have one) but runs a sizeable Registered inventory.

    Think about that for a moment, if you will, and then apply your new-found wisdom to what you see reported in JP Morgan's name in respect of Warehouse Inventory, Delivery Reports and COT. During 2015 JP Morgan House account has stood for a total of 15000 5000 oz Silver contracts, representing around 14% of its warehouse inventory; it has been delivered to by the Customer accounts of a number of smaller Clearing members who do not have COMEX warehouse facilities, such as Jeffries. Bron is right - it's not JP Morgan which has been buying, it's JP Morgan's Customers, but you can't see that from the Inventory, only from the COT reports.

    If you're really, really bored with sensationalism, wise up on Exchange For Physical (EFP) delivery and understand that the vast bulk of actual non-cash settlement is conducted from Eligible inventory to Eligible inventory within a single warehouse, and as COMEX only reports net movements, you cannot possibly trace Settlements back to Inventory

    Of course, that doesn't make nearly as sensational a headline - "JP Morgan acts as a Market Maker and its Bids Get Hit all the time" just doesn't have the right ring to it, somehow

    The simple truth is that there is insufficient information publicly available in the various COMEX reports to piece together a coherent picture of what is going on; that, in itself, is no excuse for idle fantasies about JP Morgan conering the market

  2. apologies for the typo - that should read "1500" Silver contracts: https://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf (and they've added a further 482 over the past fews days since the end of April)