Accounting errors cause LBMA to overstate silver holding by 3,300 tonnes during March Silver Squeeze
(Kitco News) - An accounting error in the silver market, made by the London Bullion Market Association (LBMA), comes at a difficult time for the precious metal as investors are trying to gauge how much supply is actually in the marketplace.
Tuesday, the LBMA confirmed it made a reporting error in the amount of physical silver held in the London vaults. According to the recent report, the LBMA overstated London vault silver holdings by 3,300 tonnes in March when the market saw unprecedented demand for the physical precious metal.
"A data submission error led to the publication of an incorrect aggregate figure for the total silver held in London vaults in March. The corrected figure is 1,143,194 Troy ounces ('000s)," the LBMA said in a statement.
It was previously reported that at the end of April 2021, there were 1,153,154 Troy ounces ('000s) of silver held in London vaults representing a +0.9% increase on the previous month.
Bullion Star on Twitter commented stating "In early April, LBMA claimed that total silver held in LBMA London vaults had risen by a massive 11% during March from 1.125 bn ozs (34,996 tonnes) to 1.249 bn ozs (38,859 tonnes). This, it turns out, was not true, as the real end of March figure was 1.143 bn (35,557 tonnes)."
Looking at the numbers in detail, 3,300 tons is 96,251,100 troy oz which is a pretty significant 'data submission error.' According to some analysts, with tens of thousands of tonnes of fractionally-held gold and silver cleared every year in the London market, transparency is vital.
Chris Marcus, the founder of Arcadia Economics, has previously said that the U.S. Mint has been unable to meet physical demand.
Marcus often states there has been a lack of backing behind the sales of certain silver contracts.
In regards to this latest incident, Marcus tweeted: "I feel like I almost have to sleep on this one before commenting further… Because unless I'm missing something, did they basically just say that they didn't add the 118 million ounces they claimed during silver squeeze weekend?"
On a more cynical side, many traders and investors in the bullion markets have been talking about the "silver squeeze." This has been caused by a band of traders organizing through social media and piling into the silver-backed ETF SLV.
The monthly chart below shows just how big the volume spike has been over the last year compared to when the price was trading at higher levels in the past.
Is there enough physical silver out there to back the current paper being sold?