BofA is the likely perp behind the metal price decline as they dump 14.8 million oz of silver and 20.7 tonne of gold on the December contracts accounting for over half of metal sold.
Nov 29, 2024 10:00 AM
On first notice day of the December contract Bank of America (BofA) issued delivery notices for 6,656 gold contracts (665,600 oz or 20.7 tonne). Additionally, BofA dumped 2,951 silver contracts (14.8 million oz) on day one. BofA was the largest short, by far, for both metals. Furthermore, each of those were the third largest sales ever by BofA. The gold sale reduced BofA’s cumulative net buy at comex by 18% and reduced the silver net by 35%.
It’s apparent that BofA has been the perp behind the recent weakness in both metals.
Looking closer at each metal …
++++++++++++++ Gold
17,737 contracts (preliminary) stood for delivery as 22.4% of comex registered gold is set to change hands. Contracts standing for delivery is down 17% from the prior active month contract of August and down 7% from the prior year active contracts. Contracts standing on first notice day are plotted as follows:
First day delivery notices were 13,075 or 74% of the contracts standing for delivery. BofA’s 6,656 contracts (665,600 oz) were 51% of the total followed by HSBC “customer” accounts at 271,000 oz and JP Morgan customers at 250,000 oz.
The largest buyer was Deutsche Bank’s house account at 356,000 oz or 27% of the total. The “other” category was next which shows the breadth of buyers.
Putting BofA’s sale in perspective, as I mentioned above, 18% of their cumulative stack was sold. Note that the cumulative plot below assumes metal was not moved in or out of BofA’s possession beyond issues and stops at comex. There may be other transactions which impact their net physical possession at comex so this is only an estimate of their net cumulative position. Plot below:
The HSBC “customer” account has been a large net seller over the last year selling a net 845,000 oz over that period:
Duetsche Bank’s buy was the second largest in their history at comex. However Deutsche Bank is a trader and doesn’t accumulate metal at comex. Notice below how you can often pair buys with sells, so look for this metal to be sold shortly:
++++++++++++ Silver
8,087 contracts (40.4 million oz) stood for delivery. That is the largest number of contracts since March of last year as you can see on the plot below. That is up 77% sequentially and up 67% over the 12 month trailing average of active month contracts. Half of comex registered silver is set to change hands.
5,456 delivery notices were issued or 67% of the total. That fraction is over the average of about 50% however there is still a lot of metal to deliver so a naked short could be revealed later as the clock runs out.
BofA, as mentioned above, was the largest short and issued 54% of the delivery notices (about the same as the fraction of gold delivery notices). BofA’s short dwarfed the HSBC “customer” account sale of 9.6 million oz. This HSBC account has been the dominant short at comex for 13 months. I’ve written a piece on how this account may be manipulating prices down at the world’s price setting venue but accumulating metal elsewhere at price taking markets. That game continues, although this time they had assistance from BofA.
The largest buyer was JP Morgan customer accounts who bought 13.0 million oz:
BofA sold off about 1/3 of their cumulative net stack:
The HSBC sale was larger than their recent sales over the last year but generally a continuation of their massive silver dump which now totals 61 million oz since last December when these huge sales commenced.
JP Morgan customers, who unlike HSBC “customers”, are not monolithic in their activity, bought 13 million oz and didn’t sell one single oz. In the aggregate, those accounts have been large net buyers this year accumulating a net 64 million oz.
++++++++++++ Wrapping Up
I think it is a bullish signal that BofA’s massive dump only put a modest dent in gold and silver prices. While BofA has generally been an accumulator and not a trader, it is possible they will buy this metal back and continue stacking. That would be significantly bullish.
The HSBC game continues as they move new metal from outside comex into Asahi’s vault and then sell it at comex. Where’s that metal coming from? In May I speculated they were buying elsewhere and dumping at comex calling that trade the “Differential Lag Theory”. Dumping 60 million oz of physical at comex will certainly depress posted prices. Have they bought more than an offsetting amount at other venues?
Here’s the piece if you missed that:
I know a fella who has stated several times that the stash has been parked at Chase Manhattan Center. Purchased over a period of years by J.P. Dimon on behalf of China, Inc. Those EFR's and block trades have also likely contributed to movement. As you know, in recent history The America- Bank- of- Corp. took over a major role from CITI and HSBC to become a major Player. It's no coincidence that HSBC has been a large Dumper. I'd posit (as I also have in the past) that many of these transactions are conducted in order to trade one metal/ security/ asset for another. Silver for gold as an example. This is not just COMEX. It's a web which includes Canadia (see BMO) and a couple locations in American Tejas.
I'd also speculate that ASAHI is refining mine supply for the benefit of our favorite Criminal Enterprise(s). Your own numbers show massive stacking over at the J. Dime Headquarters. Both
C & H. You know... cuz They're the Custodians here and there. Possession and such, right?
No NDA's necessary, as the process is plenty opaque
China, Russia, India, and other eastern countries send a huge "Thank You" to our stupid banks.