China Just Triggered The Final Silver Reversal - COMEX Can’t Hide It Anymore | Andy Schectman

Summary

The transcript discusses the ongoing trends in the silver and gold markets, focusing on significant shifts in global deliveries and buying patterns, particularly from China. It highlights the unusual levels of silver deliveries, including the largest delivery in COMEX history, and the growing interest from central banks and sophisticated traders. The speaker also points out the technical chart formation for silver, drawing comparisons to gold, and predicts a price surge due to increasing demand and limited supply. The narrative suggests that silver may be poised for a significant rise, as global players, particularly China, strategically secure silver for future industrial and monetary needs.

Takeaways

• 😀 China is increasingly playing a strategic role in silver acquisition, buying up large quantities of silver, including concentrate and Doré, which makes it difficult to track their actual silver holdings.
• 😀 The price of silver has been suppressed for a long time, but delivery levels, particularly on COMEX, Shanghai, and the London Metals Exchange, are rising, indicating a shift.
• 😀 Silver is mirroring gold’s long-term price pattern, with a ‘cup and handle’ formation that could signal a breakout above $35 per ounce, possibly pushing it towards $40 and beyond.
• 😀 China has been increasing its quotas for gold and silver imports, signaling a major push to accumulate precious metals.
• 😀 The global demand for silver is rising, with countries like China securing it for strategic, industrial, and technological uses, including electronics and military applications.
• 😀 There is a growing divergence in the market, with central banks buying gold and silver, and hedge funds showing increasing interest in these metals.
• 😀 The strong delivery demand in both gold and silver markets points to an escalating price trend into the fall of the year, potentially reflecting growing demand and lower supplies.
• 😀 Despite the challenges and volatility in the silver market, there is renewed optimism among silver stackers, with expectations that silver will eventually catch up with gold in terms of price growth.
• 😀 The historical price ratio between gold and silver suggests that silver could reach higher prices, with some projections pointing towards $75 per ounce based on long-term trends.
• 😀 The silver market is seen as undervalued by many sophisticated traders, with increasing international interest, particularly in China, signaling a potential price spike as more players enter the market.

Q & A

Why is silver gaining attention in the market, and how is it linked to gold?

Silver is gaining attention due to its price movements, large deliveries, and increased interest from central banks and sophisticated traders. Historically, silver tends to follow the movements of gold, with both metals often having a 90% correlation in their price movements. As gold sees significant demand, silver typically follows, and this pattern is being observed again in the current market.

What unusual trend is occurring with silver deliveries on the COMEX and other exchanges?

An unusually high volume of silver deliveries is taking place, especially on the COMEX, Shanghai Exchange, and London Metals Exchange. These deliveries are much higher than typical, indicating a potential shift in market behavior and an increased demand for silver. This is further highlighted by the largest delivery of silver in COMEX history during the May contract.

What role is China playing in the silver market?

China is playing a significant role by being one of the largest importers and producers of silver. The country has been acquiring large amounts of silver through the purchase of concentrate and doré, which are refined locally. This strategy helps China secure its future supply of silver, which is crucial for industries like electronics, batteries, and military technologies.

How does China's silver acquisition strategy differ from the market's typical behavior?

China's strategy involves purchasing silver in ways that disintermediate the market, such as buying doré and concentrate, which masks the true volume of silver they are acquiring. This differs from traditional market behaviors where silver is typically bought in refined forms, making it difficult to track the total amount China is stockpiling.

What is the significance of silver's price movements in the context of the global market?

The price movements of silver are closely linked to global economic conditions and geopolitical factors. A significant rise in silver prices could signal increasing demand for the metal, particularly from central banks and industrial sectors that rely on silver for critical applications like electronics and military technologies. If silver breaks past key resistance levels, it could experience a major price surge.

What technical chart pattern is mentioned in the script, and what does it suggest for silver's future price?

The script mentions a 'cup and handle' formation for silver, which suggests a potential breakout in the near future. Silver is currently at the tip of the cup, and if it breaks above the $35 level, it could trigger a strong upward price movement. This chart pattern indicates a long-term base that could lead to significant price gains over time.

What is the 'naked suppression' of silver, and why is it considered dangerous?

'Naked suppression' refers to the practice of manipulating silver prices by artificially suppressing its value. This is considered dangerous because it distorts the true supply and demand dynamics of the silver market. As deliveries and standing delivery requests increase, the market's ability to continue suppressing silver prices is weakening, which could lead to a price surge.

What is the importance of silver in the context of global strategic resources?

Silver is increasingly being viewed as a strategic resource, not only for its industrial uses in electronics, batteries, and military technologies but also for its historical role as money. Countries like China are securing silver to ensure their future needs, given its critical importance in various industries that rely on its unique properties.

What factors are contributing to silver's growing appeal among central banks and traders?

The growing appeal of silver is driven by a combination of factors, including large deliveries, price patterns, and increasing purchases by central banks. Sophisticated traders are beginning to recognize the long-term value of silver, especially in light of its price potential, which is currently undervalued compared to historical norms.

What is the expected price trajectory for silver in the coming months?

Based on current market trends, including high delivery volumes and strong demand from China and central banks, silver is expected to experience an upward price movement. A breakout above the $35 mark could lead to further price acceleration, with potential resistance levels being overcome as silver moves towards the $40 range. Historically, silver's long-term average price suggests a potential price range closer to $75 per ounce.