Physical gold and silver shortage

[pmbug]

...
Now, a spike in so-called lease rates in London this week signals that an increasingly frenetic global hunt for bullion is under way as major dealers seek to shift metal to the US before any tariffs are imposed.

Lease rates reflect the return that holders of bullion in London’s vaults can get by loaning their metal out to other buyers on a short-term basis. Normally, the returns on offer sit close to zero, but this week they’ve surged to historic levels, with profits on one-month lease rates exceeding 3.5% on an annualized basis.

That’s the highest level since at least 2002, and it signals surging demand for metal in London’s vaults. There have been similarly extreme moves in the silver market, and some analysts and traders warn that there may not be enough freely available metal to meet dealers’ needs.
...

https://www.bloomberg.com/news/articles ... in-london/

[Lemon Thrower]

Silver is still well below its ATH of $49.51. Gold is around $2700, about $90 below its ATH.

[pmbug]

Correct. The article is highlighting the stress in the paper market system. The threat of Trump's tariffs are causing a surge of importation in physical metal. The shorts in the COMEX are facing a big problem with EFP premiums. The importation surge is stressing the LBMA. There isn't sufficient metal to satisfy the demand presently. I posted more about this issue here (starting at post #91 and running through the end of the page):

https://www.pmbug.com/threads/silversqu ... ost-121232

[Cu Penny Hoarder]

How many times have we heard the "shortage" BS story over and over again?

If there were a TRUE shortage PM prices would be going sky high with all the speculators jumping in.

Even when there is a real shortage (very rare), it always gets settled somehow or corrects itself in about 1-2 months, then back to business as usual.

[68Camaro]

Shortage is relative. You can still call a temporary narrowing of the market a shortage. It's not the same as the greater long term physical supply shortfall that many of us think of a "real" Shortage that does not see a recovery for years, if ever. But I understand using the term. Just like a Shortage of eggs. We have a Shortage of eggs, in the moment. Long term, they will hatch more laying chickens and overcome that Shortage. It's still there though.

[Lemon Thrower]

and premiums are not moving so this is just propaganda about the so-called physical market in London that is never settled with physical.

[youtube]http://youtu.be/vWz9VN40nCA?si=5wH2wsCumMz5EW8D&t=48[/youtube]

[Recyclersteve]

How many times have we heard the "shortage" BS story over and over again?

If there were a TRUE shortage PM prices would be going sky high with all the speculators jumping in.

Even when there is a real shortage (very rare), it always gets settled somehow or corrects itself in about 1-2 months, then back to business as usual.

If silver were to rocket higher (say 50-100%) in short order, I’d actually consider selling short the silver exchange traded fund in the stock market (Symbol: SLV). When it rockets higher, I don’t really ever remember it staying sharply higher for long.

This reminds me a bit of when the stock Gamestop (Ticker: GME) went SHARPLY HIGHER, but then came back down very sharply. By the way, the movie Dumb Money was about GME. Watch the trailer and you might want to see the movie. I saw it probably 4-5 times, at least. I’m a former stock broker (was in the biz almost 20 years) and found it fascinating.

[pmbug]

GS ASSIGNS 10% PROBABILITY TO 10% EFFECTIVE TARIFF ON #GOLD BEING INTRODUCED WITHIN THE NEXT 12 MONTHS. MARKET IS PRICING LOWER PROBABILITY-JUST ABOVE 10%-OF A 10% US TARIFF ON GOLD.
-based on efp changes vs actual price differential if it happened.

If they tariff gold that would be very price disruptive. Higher.
@profitsplusid

Silver is much higher
@ArcadiaEconomic

https://x.com/Sorenthek/status/1881312664921481227

The market isn't fully pricing in the risk of a tariff. If Trump actually pushes through a tariff on gold/silver it's going to cause some chaos in the paper markets.

[Cu Penny Hoarder]

and premiums are not moving so this is just propaganda about the so-called physical market in London that is never settled with physical.

Yes, that's one thing I forgot to mention. Premiums tell you all you need to know.

[Lemon Thrower]

Perhaps becaue we don't actually import much gold and silver? We already produce a decent amount domestically, well in excess of what is "consumed," and the rest is stored in a vault. Does it matter if that vault is in London, Switzerland, or NYC?

I don't think there will actually be many tariffs. I think the threat of tariffs is just a tool to get countries that are sticking us with their criminals, mental patients, gang members, and fentanyl, or countries that are free riding and not paying their fair share of defense costs, to act appropriately.

Here is an article discussing tariffs in connection with Mexico. Regardless of how you feel about the policy issues, the article does a good job of demonstrating the weight that tariff rhetoric has on the issue.
https://www.zerohedge.com/geopolitical/ ... ation-plan