LBMA March Silver Supply: Revised Numbers Show Huge Mistake In Previous Report

If you pay attention to the LBMA’s monthly publication of its supply, you will find information about its gold and silver holdings. However, the LBMA March silver supply previously indicated a record stock of silver in its London vaults. Actually, this number is entirely incorrect, and you can only find the revision in a footnote on the LBMA’s website.

LBMA March silver supply official statement

SOURCE: LBMA

What is the LBMA? 

To review, the London Bullion Market Association is an organization that the Bank of England loosely oversees. The LBMA is in charge of handling the Over-the-Counter market for precious metals futures contracts. They also define what makes bullion “Good Delivery.” Anytime someone invests in a futures contract, even through the NYMEX/COMEX or Tokyo Commodity Exchange, they trade based on the LBMA price. 

The futures market is often used as a hedge to “mitigate price risk” (according to Investopedia), and the majority of futures are never delivered. Instead, these contracts roll over monthly, sometimes indefinitely as long as the investor does not want to accept delivery. As a matter of fact, less than 1% of the trades actually are delivered. Instead, these precious metals are stored in London’s LBMA vaults. 

What Happened to the LBMA March Silver Supply?

In March, the LBMA claimed to have a record amount of silver in their inventories. However, this report was a false claim. To the novice investor, this mistake might not seem like a big deal. However, the LBMA waited an entire month before deciding to revise this incredible error. 

Specifically, the LBMA claimed there was an 11% increase in comparison to February. This 11% represents about $30 billion or 1,259,310 silver bars. However, the LBMA March silver supply number was off—by a lot. In reality, the LBMA only saw the addition of 561 tonnes, not 3,863 tonnes. This is 6.88 times less than the previous statement, shifting from an 11% increase to merely 1.6%. 

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Disclaimer: This article is not meant to serve as professional economic advice. Any action you take upon the information from this article and website is strictly at your own risk.

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