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Michael Lynch: Comex silver's situation is precarious as largest short struggles to deliver
Great research by Michael Lynch here, but wouldn't the situation make more sense if the HSBC "customer" he cites is actually the U.S. government, which pledged to suppress the price of silver upon removing the monetary metal from its coinage in 1965? See: https://www.gata.org/node/23297. -- cp
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By Michael Lynch
Michael Lynch on Gold and Silver / Substack
Thursday, March 27, 2025
The naked short on the March silver contract is the HSBC "customer" account.
I had posted about this situation a couple of days ago on X, pointing out that the OI was one of the highest ever at this point in the delivery cycle:
https://x.com/DtDS_WSS/status/1904572463012282757
Over the last two days, that HSBC "customer" account has issued delivery notices on 417 contracts (2.1 million ounces) dropping the open interest as of this morning's open to 223 (1.1 million ounces). Last notice day is tomorrow (March 28) so they have delayed to the last moment.
... Dispatch continues below ...
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This isn't the first time HSBC was caught naked short. On one prior occasion, Band of America bailed them out in the waning days of the contract. On this occasion it appears (for now) they found some metal to deliver. I’ll get to the vault moves in a moment. ...
I have theorized that this isn't a customer account but is an HSBC bank account designed to suppress the price at the world's price-setting venue (Comex) as they accumulate metal at non-price setting venues. I tagged this the "Differential Lag Theory," meaning they can buy at remote locations but the price signal lags Comex. ...
... For the remainder of the analysis:
https://econanalytics.substack.com/p/comex-silvers-situation-is-precarious
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