Posted 5th June 2020

Talking Gold, with Andrew Maguire

This post is a summary of ‘Talking Gold’ – a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets – a regular feature from the Kinesis Youtube show ‘Live from the Vault’.

For the full analysis into the gold and silver markets, presented in illuminating detail, have a watch of Talking Gold in Episode 13 of Kinesis’ ‘Live from the Vault’.

In this week’s episode, Andrew Maguire discusses the gold and silver markets with Gold Anti-Trust Action Committee (GATA) chairman, Bill Murphy. As one of the founders of GATA, Bill Murphy has been exposing insider manipulation of the gold and silver price for more than twenty years.

The pair exchange industry insights on the ongoing wholesale physical silver bullion shortage and address the implications of dwindling open interest in the Silver Futures (SI) market.
For a detailed look at the impact of a breaking officially-run algorithm on the silver market, have a watch of Talking Gold’ from Episode 12 of Kinesis’ ‘Live in the Vault’.

Wholesale physical silver bullion shortage

Over recent weeks, multiple industry sources have reported widespread physical silver bullion shortages throughout the wholesale market.

Major suppliers across European bullion markets are restricting any supply of silver bullion 1000 oz bars, including the Loco London and Loco Switzerland markets.

Otherwise reliable refiners are doubling down on delays, pushing back postponements from a few weeks to several months. A reputable retail precious metals dealer stated he was struggling to source 100,000 oz of physical silver bullion, with all contacted suppliers unable to fulfil the routine order.

So, with physical silver bullion in desperately short supply, why isn’t the silver price soaring?

Why isn’t the price of silver rising?

JP Morgan, and other major players, are using every trick in the book to control the Silver Futures (SI) market and prevent the silver price from increasing.

The very same tactics these major players have repeatedly deployed to rinse the silver price, while building up long physical silver market positions. However, in the flux of the current silver market, these industry insiders are meeting uncharacteristic resistance.


Huge reduction in open interest

The latest numbers show open interest in the Silver Futures (SI) market is evaporating, making it increasingly difficult for insiders to employ their historical wash and rinse cycles.

The total number of outstanding contracts held by market participants at the end of each day recently fell as low as 135,000, where it has typically rested at well over 200,000 over the last few years.

The Federal Reserve, U.S. Treasury, Bank of International Settlements (BIS) and the major bullion banks use open interest in the paper market as the vehicle to halt any potential rallies in the price of gold and silver.

What does the future hold for the silver market?

The significant reduction in open interest and the widespread physical silver bullion shortage foreshadow the delivery of a physical solution. With all indicators pointing to real physical supply, it appears the industry insiders’ firm grip on the silver price is finally loosening.

Andrew Maguire’s parting thought:

I think a physical solution is inevitable because the physical market is drawing liquidity out of the paper markets.

Andrew Maguire sits down with another special guest to evaluate the latest twists and turns in the gold and silver markets.

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