Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Are Gold and Silver Approaching a Tipping Point?

  by    0   4

Data coming from the COMEX could indicate growing pressure for a breakout in gold and silver.

COMEX data has shown large deviations for several months. Most of this occurred before Russia invaded Ukraine and these deviations have grown larger since. The invasion seems to have accelerated trends that were already in place.

The latest data point showed that the inventory of gold at the banks is now growing at the fastest pace since October 2020. This further confirms pressure building under the surface.

Below is a recap of all that has happened since December. For those unfamiliar with the Comex, this article provides a high-level explanation of the core components. This YouTube video also summarizes the Comex mechanics and details some of the items highlighted below.

  • December was the second-largest delivery volume since summer 2020
  • December also saw the largest movement out of bank house accounts ever
  • January saw the largest delivery volume for a January contract ever by more than double. It was also the largest delivery volume for a minor month since March 2021 and had a substantial volume of contracts open for immediate delivery.
  • February saw the largest cash settlement of delivery contracts since 2018
  • February also showed Comex vaults losing inventory in 10 of the last 12 months
  • March silver had the largest adjustment in data records ever between preliminary and final (at least since data has been captured). It was 50 times larger than average, equating to 28 standard deviations
    • The YouTube video linked above also covered the topic in great depth showing it may have been a quiet default on silver
  • A recent analysis for March showed:
    • March has the largest delivery for a minor month ever and is still not over
    • April had seen a pop in open interest to start the roll period
    • April also had a widening spread relative to recent history
    • May is the highest open interest ever at this point in the contract for May and is also the highest at any point for any minor month in recent memory
    • June shows the same trends as May except it’s a major month
    • The Comex has been hesitant to raise margin rates

The March analysis concluded with a possible scenario where the price of gold could be allowed to move higher through April and June with potential massive delivery volume. This hypothesis gained more evidence when the Comex stock report showed a rapid and sudden build-up of gold inventory. This analysis has now been picked up by ZeroHedge and Seeking Alpha.

In the immediate future, an analysis of several technical indicators shows potential risks for more short-term downside on the price. Regardless, it is clear that the Comex physical market is under pressure. This data suggests that it’s possible gold and silver could have their own nickel moment at some point in the future. Investors who owned paper nickel contracts saw their trades canceled.

Astute long-term investors should take advantage of current prices and availability to accumulate more physical before a potential market squeeze.

Why Buy Gold Free Report

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

CoTs Report: Managed Money Hammers Gold for 7th Straight Week

Managed Money continues to hammer the price of gold lower as the Net Short position increased to -43k contracts. Please note: the CoTs report was published on 9/30/2022 for the period ending 9/27/2022. “Managed Money” and “Hedge Funds” are used interchangeably.

READ MORE →

Surprise! Another Month = Another Failed Attempt at QT

The Fed has found it easier to raise rates than shrink its balance sheet. September was supposed to be the month when the Fed got serious about shrinking the balance sheet. After a few months of warming up with $47.5B monthly reductions, the Fed was going to step up in September and shrink by $95B ($60B in […]

READ MORE →

Comex: Platinum Shorts Live to See Another Day

I typically start this analysis with gold, but the action in the platinum market is impossible to ignore. The next four charts should tell you everything you need to know. First, similar to gold and silver, platinum has seen a much higher delivery volume since the pandemic struck in 2020.

READ MORE →

Collapse in Money Supply Is Still a Major Risk for the Market

Money Supply growth was barely positive in August at $2B and sits well below the $233B seen last year. As the chart below shows, Money Supply growth has collapsed since February. Last year started with five straight months above $200B, whereas 2022 has only seen one month above $100B and that was January.

READ MORE →

Calling the Fed’s Bluff: They are Holding a Losing Hand

The Fed has talked a big game lately. Many people (including me) assumed the Fed would fold a long time ago. There is a very good reason — the Fed will crush the economy and the US Treasury with higher interest rates. In reality, the Fed is holding a losing hand and trying to bluff […]

READ MORE →

Comments are closed.

Call Now