Summary
- The document discusses potential Trump tariffs starting March 1st, 2025, which could significantly impact precious metals markets, with uncertainty surrounding potential exemptions.
- COMEX gold and silver inventories have been climbing sharply, with gold and silver inventories rising by nearly 13 million ounces in recent months.
- The Bank of England is experiencing unprecedented gold withdrawal delays, with waiting times stretching to 1-2 months, which challenges the traditional spot gold market's prompt delivery premise.
- The gold market is showing significant disequilibrium, with eastern gold price data diverging sharply from London's fixed prices, potentially indicating a massive pricing discrepancy.
- The Silver Institute estimates a global silver supply deficit of 149 million ounces for 2025, marking the potential 7th consecutive year of demand outstripping supply.
- Industrial silver demand has grown by 55% since 2015, with projected demand of over 710 million ounces this year.
- Spot silver closed at $31.29 per ounce, while spot gold reached a new record nominal high, closing just under $2,800 per ounce.
- The LBMA's analyst price forecasts for 2025 vary widely, with gold price predictions ranging from $2,250 to $3,300 per ounce, and silver predictions from $24 to $43 per ounce.
- Approximately 40-50% of silver used in the USA is imported, primarily from Mexico, which could be significantly impacted by potential tariffs.
- High net worth investors are increasingly pulling gold bullion, possibly in anticipation of potential tariffs and market uncertainties.
A wild week of bullion related news as continued Trump tariff threats have sent the precious metals markets into a historically high state of disequilibrium and potential tariff unknowns.
This afternoon Reuters reported that the coming Trump tariffs would begin March 1st, 2025 citing some anonymous three people familiar with the planning.
At the very least, they did state the tariff situation remained fluid with no final decision until Trump makes a public announcement.
And then this happened.
So now even imported copper has upcoming tariffs. COMEX data points to not merely silver and gold inventories swelling after Trump's Nov 2024 win but also a doubling of COMEX copper inventories which all but occurred just before he even secured his second term.
COMEX gold and silver inventories continue climbing higher.
Here is a breakdown of COMEX gold eligible and registered inventories both climbing sharply of late rising by a combined near 13 million ounces combined over the last few months.
On the COMEX silver inventory side of this ongoing story, most of the recent few months climb has been in the eligible not for delivery stockpiles rising (the lighter green line).
Cynically I doubted imported silver and gold would get hit with tariffs and chalked this up to an arbitrage profit trade, but after hearing the US President today. Maybe not.
Bullion market onlookers are for the most part sharing that same feeling, with nearly 500 polled today, over 60% think there will be no gold or silver exemption news tomorrow Saturday Feb 1st.
Domestic refiners and miners of silver particularly will have their hands full as almost half the silver that the USA imports comes from Mexico, and we typically import about four to five times the silver we produce internally to meet ongoing internal silver demand.
The tariff exclusion list tomorrow might perhaps be tectonically bullion market shaking, stay tuned.
Turning to bullion market chaos over the pond to London. Even with "Gold Shortage" headlines above fold in the FT, the world's self-proclaimed leading gold market maker has had a pretty bad week in terms of branding to say the least.
The most important point being the worldwide reported wait to withdraw gold bullion stored in the Bank of England is not mere business days as under normal market conditions, it was ballooned out to delays of 1 to 2 months to withdraw gold from the world's oldest central bank and gold depository.
The current Governor of the Bank of England was asked on Wednesday, January 29, 2025 about the building bullion withdrawal delay story. Have a listen.
The gold industry's current estimated float or available gold inventories at the Bank of England at the end of 2024 was estimated at just over 1,100 metric tons or about 36 million oz.
A shortfall in London OTC markets when measured against an estimated 380 million ounces of outstanding spot/cash gold contracts from data this week. The delays effectively constitute technical defaults on these contracts, as sellers cannot meet delivery timelines reduced to delays.
This current situation challenges the fundamental premise of London’s spot gold market, where contracts traditionally guarantee prompt delivery. The 4–8 week delays indicate sellers are operating on a “just-in-time” inventory model rather than maintaining physical reserves, relying on global refiners to convert scrap or mined gold into LBMA-approved or COMEX-approved gold bars. With U.S. political uncertainty driving continued demand for COMEX deliveries, further strains could intensify further pressure on global gold prices and expose deeper discrepancies between myriad outsized outstanding paper claims versus underlying available for delivery physical holdings. The LBMA’s four-week reporting lag on vault data compounds transparency issues, leaving markets navigating this crisis with incomplete information.
In other words, there is no telling as of yet how much of the latest ramp in COMEX gold inventories came from this estimated Bank of England float either.
The largest first delivery day ever reported on the COMEX yesterday, its obvious high net worth investors are looking to pull gold bullion ahead of potential oncoming tariffs.
The bullion over bonds trade appears to have gone beyond merely record central bank gold bullion reserve buying the last three years running. While our government continues spending at unprecedentedly high levels.
For those of you who have been following our channel over the last three years. You can't say we didn't warn you. Matter of fact, even long time London Gold Trader Peter Hambro warned us all back in the summer of 2022.
I will leave a link to that important video warning in the show notes below in case you missed it.
IMPORTANT RELATED VIDEO —— July 8, 2022
Longtime London Gold Trader: Precious Metals Markets are Paper Derivative Shams
https://youtu.be/uQulNNuwMz4?si=gLaJ-BKQ5nb5F5hm
Before the break, I'll leave you with this smoking price discovery gun to ponder.
Ongoing gold price data throughout this full fiat currency era illustrates that ever since the Bank of England's LBMA came about in 1987 the ongoing blue eastern gold price data outside of London PM and AM fix hours diverged sharply upwards and has since ballooned to now nearly $42,000 oz price data ongoing. All while spot gold is still hovering only around $2,800 oz... Starting in 1970 at just over $35 oz gold, the ongoing price of gold traded between the London AM & PM fixes has whittled down to $2.31 oz ongoing.
This is the most important Gold market disequilibrium to consider.
How much longer can it last?
Silver and gold markets traded upward with strength this week.
The spot silver price closed at $31.29 oz bid in fiat US dollars.
The spot gold price finished the week and month at a new record nominal price high ending just under $2800 oz bid.
The spot gold silver ratio remained stubbornly high closing at 89.
For any of you out there looking to acquire more silver bullion. No promises how long this offer will last.
And while there's certainly plenty of news headlines buzzing around the potential blanket tariffs to hit Canada and Mexico tomorrow, Saturday February 1st, 2025.
While we're no more aware of what will happen than anyone else is.
What we do know is the anticipation of tariffs has really disrupted our industry.
Therefore, we went ahead and acquired a good amount of Canadian Silver Maple Leaf Coins at a good rate ahead of this deadline. And as always, we are passing on these savings to our customers buying in bulk Silver Maple Leaf Coins price cheaper than most Silver Rounds.
Obviously we cannot keep these prices this long for too long. There is a limited quantity at this price so move on it now if you have interest. I'll leave a link in show notes on the deal.
Random 1 oz Canadian Silver Maple Leaf Coins as low as 99¢ oz above silver spot:
https://sdbullion.com/canadian-silver-maple-leaf-coin-random-year
The LBMA again published gold and silver analyst price guesses for 2025. They were markedly mostly bearish and way too low in their 2024 guess work.
Their gold guesses for 2025 range from a lowest low call of $2,250 oz to nearly $3,300 oz price high forecast on the year by the same analyst who won last year's guesswork.
On the silver side of their 2025 guesswork, the lowest low is $24 oz with the highest high of their collective calls at $43 oz.
Regarding great ongoing supply demand fundamentals in the silver market, this visual did a rather good job of illustrating the ramp in silver demand following the 2020 pandemic.
Industrial silver demand has grown by 55% since 2015, projected to be over 710 million oz this year alone.
This week the Silver Institute estimated another global silver supply deficit for 2025. Estimating ongoing global demand for silver inputs will outstrip new mined and recycled silver supplies by 149 million oz.
If unsecured silver ETF flows± were taken into account, this will be the 7th year running with demand outstripping supply in the global silver market.
TD's Senior Commodity Analyst was back in the news this week with notes on the silver market citing the potential for a momentum long pile on into silver looking for a potential pronounced break north of $31.55 oz.
Of course, gold and silver tariff news tomorrow will likely play a major part in how the precious metals markets open and trade next week.
Tariffs or not, premiums that low on Canadian Silver Maple Leaf bullion coins don't last long so get your while they last.
See you next week.
That will be all for our weekly SD Bullion Market Update.
And as always to you out there, take great care of yourselves and those you love.
