This is what all these talking heads are trying to tell everyone. The 1000 oz bars (good delivery spec) are in short supply. The exchanges are getting stressed.
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HOW are COMEX 1,000 oz bars selling with 45 Cent premiums GREATER than most of that retail 1, 5, 10 or even a 100 oz bar? That does not make sense.
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Thought so.I did and no I can't.
I listened only to the 18 min. mark. He talks about silver being shipped from London to NY in order to be delivered to the comex longs.Apparently this Bob just did an interview on Youtube with Arcadia. He talks about this exactly about 18 mins into the video.
Tariffs wouldn't mess up anything because their leverage schemes are not affected by how much bullion they have.Are you suggesting that increasing the delivery (imported) price would mess up their leverage schemes?
no it doesn't.Now that makes sense
Bob Coleman said:Many have asked to provide comments on the following statement.
@JoshPhilipPhair said:Silver Refineries in the US are backed up more than 3 Months!!! They are processing so much material into Comex Good Delivery (on behalf of the banks) that industrial consumption is having issues finding reasonably priced physical Silver.
There are 2 main precious metals refineries in the USA. Precious metals in all forms (mining ore, dore, scrap, secondary retail products, etc) are brought in to melt into refined bars. Currently, the blow out in the Exchange for Physical (#EFP) premiums were creating an environment where these refineries are finding it more profitable to make Comex and London good delivery bars to the exchange rather than making retail products or other bars for a small fabrication fee per ounce.
Secondly, the retail selling back (as prices have been rising) has been tremendous. Retail dealers balance sheets are stretched and have been forced to sell back to wholesalers. Wholesalers are buying nearly everything at a discount to spot. It is more profitable to have this metal melted into larger bars to make money from the EFP blowout (due to tariff worries) than to sit on inventory with higher carrying costs.
Also as we are in the winter, the grades of #silver and #gold from mines are traditionally not as good since the chemicals that are used to extract do not work as well in the cold weather. If the grades are not good, the refining process may have to remelt pours until the assay meets purity specifications. Either the grades are not favorable or purer silver for example needs to be added to the pour to bring up the grade. This extends lead times. Also grades of metal coming from Wholesalers and other participants may require additional pours due to quality of material being delivered in.
We are in a perfect storm, if a large amount of capital decides to come into the physical market at the moment. Traditional modeling used in the Exchange for Physical trade has been chaotic. This started with tariff worries but now players are trying to play the arbitrage by sourcing large physical bars to deliver to the exchange against their short positions. This is a timing issue of the physical world and refining capacity against the paper world of arbitrage and the forward curve. Industry can still go to the Banks to get metal, delivery times could be pushed around due to the delivery process at the Comex vs buying OTC between buyer and seller. Also, Gold is more important at the moment for refiners due to the Comex February contract coming up for expiration vs the Silver’s March contract.
If the comment above were true, We would be in #backwardation (futures price is less than the spot price) if the immediate need by industry is overwhelming. Currently we are seeing higher than normal premiums against the forward curve. Since the EFPs were elevated, there has been more demand to cover short positions on the futures either by buying back contracts or delivering against the short position.
Money (Gold and Silver) goes where it is best treated and currently that is to the Comex.
no it doesn't.
In the USA there are 24 silver refineries.
Only 3 of them are in the LBMA good delivery list.
Even if what this Scottsdale guy says is true - that those 3 refineries are sending their output to the Comex/Bullion Banks (how does he know?) - there are 21 more refineries servicing US industrial consumption.
I'm still waiting for some empirical data that US industrial consumption is having issues in sourcing reasonably priced metal, but even if it's true, this has nothing to do with US silver refineries servicing bullion banks: out of 24 refineries only 3 can serve bullion banks.
They are feeding stackers and goldbugs with so much crap.
View attachment 15267
So, first they tell you that EFP premiums are high because the Comex can't source metal.
Now they tell you that EPF premium are high despite the Comex having no problem sourcing metal.
Nobody call them out because hearing high EFP premiums we all get excited and nobody wants to be considered a downer.
It's not crap if its plainly visible in the prices. The market is responding to the pricing. If they can buy smaller bullion, melt it and repour and now get a higher price they will do that.
pmbug said:How many silver refineries are there in the USA? How many of these refineries are certified for LBMA good delivery silver? What percent of total silver refinery output do the LBMA good delivery certified refineries contribute annually?
when someone tells you that US refineries are backed up because they are delivering to Comex,
whereas only 3 out of 24 US refineries are allowed to deliver to Comex,
he's feeding you crap
CEO of Scottsdale Silver:
You are missing the point.That's kinda besides the point. The prices tell you that should and therefore will be happening. How long they are backed up is not that relevant.
I think it's fact at this point that there is a lot of retail selling right now, both of gold and silver. I think its also factual that there has been large industrial demand, mostly from overseas.
Ok people still don’t get it.
1) There is a glut of Gold & Silver products at U.S. Gold & Silver retailers (not Costco, and mostly stuff that the shops bought back from their customers). A lot of coin shops are offering below spot for both Gold and Silver buybacks.
2) There is a tight global market for “Good Delivery” Gold and Silver bars.
3) There is a tight global industrial Silver market (US Silver refiners are mostly working for the industrial buyers and they are backed up 3 to 4 months).
- Most of the generic Silver that shops are buying back are smelted by refiners and they go to the industrial buyers, not the exchanges.
- Most exchanges are looking for Good Delivery bars. Or they are directly dealing with refineries that deal with the miners.
- The U.S. retail Gold & Silver market is small compared to the global Gold & Silver market. U.S. retail Gold & Silver are mostly not getting smelted to make Good Delivery Bars for the exchanges.
So its basically everything we've been saying Except he says they are selling directly to industrial clients (ie I see India and China here) and skipping the Comex/market step alltogether.
Yes, you recognise now that the story of the silver shortage because of comex deliveries was crap.Except he says they are selling directly to industrial clients (ie I see India and China here) and skipping the Comex/market step alltogether.
not trueThis guy appears to be the source of the tweet. He did a 27 min video in addition to the tweet today. Specifically you can go to ~14 min mark for this info. He would be fairly well sourced as they have to do a lot of business with these refiners. The rest is some of him talking his book.
not true eitherFWIW:
Why Voodoo?Perhaps Just the Threat of a tariff has drained the LBMA of GOLD no less
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Btw, the world is still waiting to learn where the EFP premiums guy get those figures from. Everybody is quoting him but nobody asks. ...
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And do you really think that tons of gold start being shipped around the world just because of a tariff threat?
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I did ask. Someone else answered me:
This was the post I was replying to:
As of this moment, I'm seeing
$31.98 - $31.10 = $0.88
Futures: https://www.marketwatch.com/investing/future/si00
Spot (click silver button): https://www.bullionvault.com/gold-price-chart.do
Why Voodoo?
Comex can deliver gold using EFP. They don't need it in USA in order to deliver it.
And do you really think that tons of gold start being shipped around the world just because of a tariff threat?
So what happens if those threats then don't consolidate? (Btw I heard Trump mentioning tariffs vs Mexico. Honest question: did he mention tariffs vs England too? How probable are US tariffs vs England?)
So, let's say there is no follow up to those tariff threats. Can you imagine tons of gold - the most fundamental monetary asset worldwide - having been shipped around the world for nothing? Do you think those entities are that stupid?
Cracks in the system are taking place because prices have been kept too low for too long and because of loss of trust in the institutions entrusted with managing the gold system, not because of Trump.
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As of this moment, I'm seeing
$31.98 - $31.10 = $0.88
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Airplanes are cheap. I cargo jet could carry a huge amount of money in the form of Gold. Silver is a bigger problem. To save a potential 25% tax, yes, yes I can see that throwing a wrench in this whole game of musical chairs.
It's being reported by the FT amongst other media. It's not just a few publicity seekers talking about it on social media.
Gold ingots are not coffee Voodoo.
The value of a gold ingot is not its dollar value.
You must take into consideration its monetary function.
When you talk about gold the transportation costs are a no issue.
The tariff story - with the absurd idea of shipping around the globe tons of gold just in case... - doesn't make any sense not because of the transportation costs.
"the tariff b.s. is being used as the cover-up"
So, let's try this path Voodoo, just as a thought exercise.
If the tariff story is indeed bs, what could they be trying to cover up?
When they feed you with some story you have first to check whether it pass the common sense filter.
(Common sense filter. Never heard that expression, surely there is a better one. My God my English...)
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During my tenure at Sprott (2002-2013), we had accumulated a significant position in silver in the 2005-2007 period. This was done via top tier bullion bank certificates that promised 5-day delivery. These weren't small positions - we're talking about substantial tonnage that was supposedly safely stored and readily available. What unfolded next exposed a troubling reality about the paper silver market and I believe led to the huge run in silver that followed as it ultimately ran to its all-time high in nominal terms.
When we decided to take delivery, what should have been a routine 5-day process turned into a nine-month odyssey of excuses and misdirection. We had strategically contracted to store our silver in Canada's government mint refinery and storage facility - ironically, the same facility that had been emptied when Canada foolishly sold off all its gold and silver reserves. The vaults were empty, waiting for our silver.
At first, our counterparties claimed it was merely a logistical issue. Then the excuses began:When I demanded bar numbers for our inventory purposes, we were met with weeks of silence and more excuses. Our legal position was frustrating - our lawyers advised that we couldn't effectively sue because what damages could we claim? Missing out on "the enjoyment of looking at our silver bars" wasn't exactly a compelling legal argument. Meanwhile, silver prices kept climbing.
- First, they said the silver would come from New York and weeks went by
- When that didn't materialize, it was supposedly coming from Chicago and months passed
- Then England became the source, with a "couple of more months" shipping estimate assurances
- Finally, they claimed it would come from China, requiring cross-Canada rail transport as a way of explaining a few months of delay
The truth became clear: our counterparties had taken our money and likely just bought futures contracts. They never had the physical silver. This situation likely trigger the 2006-2010 silver rally and foretells what will likely occur again soon.
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Solve Nettug said:Yes, as a non-English, I sometimes make myself unclear.
What I meant is 45% of LBMAs total inventory is tied to silver in the SLV trust. While the other 55% is a combination of other EFTs, available silver and not-available silver.
Comex are importing much from LBMA, but as Bob Coleman said, Chinese Bars are subject to 25% tariffs (plus also problem with Russian bars?). This leaves even less silver that can potentially be delivered from LBMA to Comex.
But even though there is a small percentage that could potentially be delivered to Comex, there should still be plenty of silver if their reports and previous comments are correct.
If there is no problem at LBMA, I would expect the drawdown of SLV list to be equally amongst countries. But when it is not, it even more tells me they are having serious issues.
pmbug said:Tariffs on China bars should be 10%. It's Canada and Mexico that are 25% (at the moment!).
The data seems to be telling me that SLV is trying to help London's need for (cheap) silver deliveries to USA by offloading bars that won't carry an import duty (Kazakstan) and holding (maybe swapping 1:1 for the Kazakstan bars?) bars that either would (China) or can't be shipped at all (Russia). This assumes that SLV is not going to use their London vaulted inventory for any USA based redemption requests.
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