Citigroup projects silver could rise to $30 an ounce in the next six months to a year.
With silver currently in the $23.00 range, this represents a possible 30% return.
The technical analysis last month highlighted the mixed environment at the time:
The indicators are once again giving some mixed signals. The price action is definitely needing further consolidation. However, other indicators suggest a market that is just getting started. … Either way, downside does seem limited at this point, especially considering all the bad news has been priced in.
The pullback from recent highs is still a healthy correction after the price action got a bit ahead of itself. So, how much more downside can we expect? Let’s look at some of the data.
Banks have restocked gold recently, but with the massive drawdown in inventories over the last year, the recent increase has done little to actually replenish those supplies.
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
There are a few things that Friday Gold Wrap host Mike Maharrey writes about that don’t seem to garner much interest. In this show, Mike is going to talk about two of those things, why they matter, and why you should care. He also talks about the recent drop in the price of gold and what the markets are getting wrong.
The CPI data for April came out this week. The mainstream spin was that it was more good news for the Fed’s inflation fight. But the actual data tells a different story. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about the CPI report and the disconnect between the mainstream narrative and reality. He also highlights some interesting Q1 gold demand numbers.
The Federal Government ran a surplus last month, as it typically does in April due to the tax deadline. The surplus was $176B which was 43% lower than the surplus last April. As the chart below shows, this was driven entirely by collapsing revenues as expenses actually fell as well.
The CPI rose in March by 0.37%, which was much larger than last month’s 0.06%. As shown below, this was driven by the energy component flipping from negative to positive.
And there’s even worse news. The math is about to turn on the CPI calculation.
While the US government is not currently adding to the national debt due to being up against the debt ceiling, it is working overtime trying to keep the government afloat.
Significantly, the interest on the national debt is skyrocketing even with the temporary lull in borrowing.
The Bureau of Labor Statistics (BLS) reported that 256k jobs were added in April with major revisions down in previous months. Meanwhile, the Household Survey reported only 139k jobs in April, the lowest amount since November last year.
In 5 days, the COMEX has seen 4,190 contracts open and stand for immediate delivery. This is the strongest start to a month going back at least 2 years, which includes the start of the war in Ukraine and the February 2021 Reddit silver squeeze.
