David, A happy new year to you. It seems that they are going to kick off almost straight into a storm of demand with only "thin air paper" to offer backed by other people's actual physical, which was already sold many times over in 2024. Are traders bothered that the metals they are buying this year, are probably the same metals they bought last year and in fact still hold having never sold those contracts. I mean, we all know that the whole thing,(the LBMA) is a mess and a bit of a farce but really, would traders buy the same metals twice in order to keep up the chirade? Obviously chaos would ensue if they had to halt trading like what happened in the nickel market so I've probably just answered my own question and they would just continue to buy contracts for the same metal they already hold. If this is the case then 2025 is going to be quite a year and you're going to be very busy along with writing some entertaining stuff for us to read. I can hardly wait.
In an interview available on that streaming platform, Keith Neumeyer, CEO of First Majestic Silver recently stated that his company was approached by Samsung several times to get the physical directly from them without going through any of the "exchanges". He also stated that he expects some industrial users to stop their business soon because they cannot get the silver. If that isn't "stress", i don't know what is. And that guy knows what he's talking about. And the Chinese are building a mega-port in Peru. I have a hunch what for. No wonder lease rates are spiking.
Assuming that this is now standard practice and some of the producers will gladly sell their silver for what certainly is an "offer they can't refuse" (i guess a certain premium over spot without the cost of using the pointless exchange and all handling done by the client), that would indicate that there is far less physical backing the paper games than previously thought (which would mean not 900 Million ounces backing 200 billion paper ounces per year but less. Do the math. And that's on COMEX. London is even worse).
In Australia a few people have mentioned that BHP are just storing the physical silver supply on site as they know the demand is coming and are waiting on the sideline for higher prices.
yes but no journalist is asking the minister of the defence forces HOW MUCH SILVER ARE YOU USING AND WHERE IS IT COMING FROM.. and if China is buying silver raw and unfiltered how much is that that taking off the 830 million ounces mined for sales to the world. Surely there is a shortage SOON ?
While nobody can argue the prudence of owning precious metals as a diversification, I still question whether it is smart to expect huge gains based on publically available "Data".... These sources are not known for integrity.
Also, the Markets are changing. Who can guarantee that the 'Consumer Electronics Demand' will survive the blooming global trade war and "Sanctions"?
Remember what percentage of silver production goes into electronics.
Physical silver demand has been suppressed using paper promissory note pricing since 1987. We are heading into a bond, currency and financial market crisis. Future demand is not going to come from consumer electronics as investors flee currency, and the failing financial and banking system.
When do you think the ten year yield goes past 5 percent??
Did you see the ten year yield last week it was smashed down to 4.5 from 4.63 then rose back to 4.58 very quickly.
The US Dollar is going higher but other countries currencies around the world are falling fast. Here in Australia we have lost ten cents in last three months against US Dollar and it keeps going south. The debt for foreign nations who have to pay debts in US dollars become bigger as the currencies falter which many in the states are not aware of.
Happy New Years and best wishes for 2025 David. Thanks for providing good content, without trying to be famous or make money as we see with so many youtubers and content makers today.
Its looks to me that Trump will have a baptism of fire in January/February, but i think he already knows this and wants this so he has more power in next crisis and it seems the Fed were on his side with the rate cut last month. If you remember the Fed would not cut rates under his watch in his last presidency.
A black swan of some sort is a certain trigger now as contagion spreads and no one can know what economic actions will cause negative reactions around the world. A Japan Rate rise or American cuts can impact other places around the world which can trigger economic chaos out of nothing such is the fragility of the system with so much debt.
Its looking like as you say a bond, currency and financial market crisis and i would probably add banking crisis to the list.
David: Answer me this. Why is there so little Premium Spread between physical metals and commodity contracts.
The difference is not nearly enough to compensate for minting and handling costs. Also, the units sizes involved are tiny and cumbersome when compared to commodity volumes!!! Obviously, the Metal Retailers are getting their product at prices lower than the Exchange prices??? Or they would be losing money...
Give an example. Let's have a look. If you are talking about N.American retail products, retail investors are infatuated with crypto, AI stock, etc. - silver is basically ignored by these investors.
We're dealing with a paper price setting market that disrupts price discovery. The situation is meta-stable and nobody knows when physical demand overtakes the ability to rig markets with paper promissory notes. But when it happens, we will know.
Excellent reporting as usual. Two questions: 1. The term "deliveries" is used implying a reduction in physical inventory. However, "delivery" can merely mean swapping ownership between bullion banks - deceptively having zero impact on true physical inventory. Can you clarify and explain why (or why not "Out of the vault" is more relevant? 2. Reports of China buying raw miner output for refining is expected to reduce Western refinery output. Any data yet showing a sharper refinery decline? Are there other significant reductions in miner output? Or, is the China action too small to be significant?
Great article David .. thank you .It’s going to blow , we don’t know when , but now is the time to get busy .. that’s my take . Happy New Year 🤙🏻
Excellent Barry - Happy New Year to you too.
David, A happy new year to you. It seems that they are going to kick off almost straight into a storm of demand with only "thin air paper" to offer backed by other people's actual physical, which was already sold many times over in 2024. Are traders bothered that the metals they are buying this year, are probably the same metals they bought last year and in fact still hold having never sold those contracts. I mean, we all know that the whole thing,(the LBMA) is a mess and a bit of a farce but really, would traders buy the same metals twice in order to keep up the chirade? Obviously chaos would ensue if they had to halt trading like what happened in the nickel market so I've probably just answered my own question and they would just continue to buy contracts for the same metal they already hold. If this is the case then 2025 is going to be quite a year and you're going to be very busy along with writing some entertaining stuff for us to read. I can hardly wait.
In an interview available on that streaming platform, Keith Neumeyer, CEO of First Majestic Silver recently stated that his company was approached by Samsung several times to get the physical directly from them without going through any of the "exchanges". He also stated that he expects some industrial users to stop their business soon because they cannot get the silver. If that isn't "stress", i don't know what is. And that guy knows what he's talking about. And the Chinese are building a mega-port in Peru. I have a hunch what for. No wonder lease rates are spiking.
Assuming that this is now standard practice and some of the producers will gladly sell their silver for what certainly is an "offer they can't refuse" (i guess a certain premium over spot without the cost of using the pointless exchange and all handling done by the client), that would indicate that there is far less physical backing the paper games than previously thought (which would mean not 900 Million ounces backing 200 billion paper ounces per year but less. Do the math. And that's on COMEX. London is even worse).
Could get really ugly pretty quickly.
In Australia a few people have mentioned that BHP are just storing the physical silver supply on site as they know the demand is coming and are waiting on the sideline for higher prices.
Happy New Year, David, and thanks for another good article. The music 🎶 must be stopping at some point in this game of silver musical chairs.
Happy New Year Stephen. At some point, enough paper clingers are going to panic and then 38 years of market pricing fraud collapses - it seems close.
yes but no journalist is asking the minister of the defence forces HOW MUCH SILVER ARE YOU USING AND WHERE IS IT COMING FROM.. and if China is buying silver raw and unfiltered how much is that that taking off the 830 million ounces mined for sales to the world. Surely there is a shortage SOON ?
The data indicate a shortage now.
While nobody can argue the prudence of owning precious metals as a diversification, I still question whether it is smart to expect huge gains based on publically available "Data".... These sources are not known for integrity.
Also, the Markets are changing. Who can guarantee that the 'Consumer Electronics Demand' will survive the blooming global trade war and "Sanctions"?
Remember what percentage of silver production goes into electronics.
Physical silver demand has been suppressed using paper promissory note pricing since 1987. We are heading into a bond, currency and financial market crisis. Future demand is not going to come from consumer electronics as investors flee currency, and the failing financial and banking system.
When do you think the ten year yield goes past 5 percent??
Did you see the ten year yield last week it was smashed down to 4.5 from 4.63 then rose back to 4.58 very quickly.
The US Dollar is going higher but other countries currencies around the world are falling fast. Here in Australia we have lost ten cents in last three months against US Dollar and it keeps going south. The debt for foreign nations who have to pay debts in US dollars become bigger as the currencies falter which many in the states are not aware of.
Happy New Years and best wishes for 2025 David. Thanks for providing good content, without trying to be famous or make money as we see with so many youtubers and content makers today.
Thank you OHB.
I think yields are going much higher but difficult to tell timing as trillions of $ chasing the Treasury market.
Its looks to me that Trump will have a baptism of fire in January/February, but i think he already knows this and wants this so he has more power in next crisis and it seems the Fed were on his side with the rate cut last month. If you remember the Fed would not cut rates under his watch in his last presidency.
A black swan of some sort is a certain trigger now as contagion spreads and no one can know what economic actions will cause negative reactions around the world. A Japan Rate rise or American cuts can impact other places around the world which can trigger economic chaos out of nothing such is the fragility of the system with so much debt.
Its looking like as you say a bond, currency and financial market crisis and i would probably add banking crisis to the list.
David: Answer me this. Why is there so little Premium Spread between physical metals and commodity contracts.
The difference is not nearly enough to compensate for minting and handling costs. Also, the units sizes involved are tiny and cumbersome when compared to commodity volumes!!! Obviously, the Metal Retailers are getting their product at prices lower than the Exchange prices??? Or they would be losing money...
Give an example. Let's have a look. If you are talking about N.American retail products, retail investors are infatuated with crypto, AI stock, etc. - silver is basically ignored by these investors.
Hasn't that been true the past four years?
You mentioned that silver's move up was just getting started in October. Do you think this downtrend will end soon then?
We're dealing with a paper price setting market that disrupts price discovery. The situation is meta-stable and nobody knows when physical demand overtakes the ability to rig markets with paper promissory notes. But when it happens, we will know.
Excellent reporting as usual. Two questions: 1. The term "deliveries" is used implying a reduction in physical inventory. However, "delivery" can merely mean swapping ownership between bullion banks - deceptively having zero impact on true physical inventory. Can you clarify and explain why (or why not "Out of the vault" is more relevant? 2. Reports of China buying raw miner output for refining is expected to reduce Western refinery output. Any data yet showing a sharper refinery decline? Are there other significant reductions in miner output? Or, is the China action too small to be significant?
Gold now at record highs in my home currency (which is being shredded, not sure exactly why).
Silver lagging but not falling.
Waiting to see what happens when Trump and his gang enter the White House - I suspect they'll try to solve their problems by printing dollars.
Good Article David, and a Very Happy 2025, The Best is Yet to Come!
Thank you DLD. First, we go trough the gauntlet of chaos (Unfortunately) as corrupt interference is swept aside.
Exactly, death of the Petro Dollar, with Gold & Silver (real money/Constitutional Money) stepping back to the forefront…’The Storm’ is brewing…
https://x.com/fnowisthetime/status/1786832203516952819?s=61