Summary
- The S&P 500 closed at just over 6,000 on February 21, 2025, doubling since the 2020 COVID-era monetary policies.
- Market instability is emerging due to Trump's tariff threats, though the recent decline is minor so far.
- A significant market downturn, potentially cutting the S&P 500 in half, would align with historical recession patterns.
- Compared to gold and silver, the stock market remains at historically high levels.
- Gold and silver are expected to outperform stocks in the long term due to asset overvaluation.
- London gold and silver inventories continue to decline, with silver supplies tightening at an accelerating rate.
- The silver market faces a growing supply crunch, as lease rates rise and COMEX inflows increase.
- The Silver Institute reported that most above-ground silver stocks are unavailable for sale, regardless of price.
- Silver price discovery is heavily influenced by derivatives rather than supply and demand fundamentals.
- Long-time silver bull Eric Sprott remains confident in silver’s potential, seeing it as part of a historic financial cycle.
This non-logarithmic S&P 500 chart was snapshot on the close of February 21, 2025 at just over 6,000 effectively nominally doubling in number since the Covid 2020 infinite QE and low rate refinancing orgy of the time.
The Trump administration's tariff threats and uncertainty tremors have begun to lightly hemorrhage the US stock and crypto market bubbles but this recent drop is actually nothing, yet.
If things go wrong this year seeing the S&P 500 cut in half nominally would not be out of the historic norm for stock bear markets during recessions.
Shortly we'll take a longer term look at the US Stock market versus bullion.
But first, let's hear from the US Treasury Secretary speaking today about what their administration is supposedly driving at big picture.
President Trump was asked about the recent drop in the US Stock market.
His answer this week for me was sell, take profits, and not confidence inspiring.
Let's quickly remind ourselves what Candidate Trump said during his Presidential run in late Sep 2016 back when the S&P 500 was nominally near just over 1/3rd where it is today.
Now I am not saying the S&P500 is about to draw down back towards its later 2016 nominal levels.
What I am saying is that relative to gold and silver bullion, it is still at eye-watering high relative historic levels.
My long term bet is gold silver outperforming the US Stock market is due to not only roll back over towards 2011 lows, but eventually even beyond lower as the world comes to terms with just how delusional most asset class values are at the moment.
Back to ongoing tariff headline chaos, Louis-Vincent Gave of Gavekel global macro and market research had some insightful takes this week on CNBC India.
His takes from the entire back-linked interview are here.
If the aim is to have the US economy rebound by 2026, I'll continue shorting and hedging that bet in real terms with heavy positions in bullion.
We're coming off one of the fattest ugly bubble markets ever concocted in US financial history.
The idea that this game plan is going to run smoothly given all factors we regularly cover here. Well it's hopium, so good luck, give me the bullion.
The silver and gold markets rose on the week.
The spot silver price finished at $32.48 oz bid
The spot gold price closed at $2,911 oz bid.
The spot gold silver ratio ended down at 89. More on that still stubbornly high ratio a bit later in this week's update by a long time respected silver bull.
But first some data updates on the week.
London Gold Silver #'s keep falling updated today through last month Feb 2025
Spread out amongst the City of London vaults and unsecured ETF holdings both gold and silver levels fell again.
The London Gold delivery delay default story is not as acute as the current London silver situation.
Instead of gold lending by governments to commercial banks, there are no central bank last resort Silver lenders in silver.
Accordingly London silver float estimates are now down to a record level of 170.5 million oz sitting free and clear outside the unsecured ETFs which of course will continue being raided as silver demand push shove gets going in earnest.
Last month's silver pull from London represented an over -18% draw down of London float silver allegedly available at high lease rates and potential borrowing costs.
With the now near 100 million oz inflow of silver bullion oz into the COMEX silver warehouse inventories, TD Securities' Daniel Ghali continues banging the table that a critical threshold of available silver in the London spot market is growing closer to being breached for the market to function.
He is not the only analysts saying akin, former bullion bank trading heads are echoing his takes reminding onlookers to stay locked in on tightening silver supplies and climbing London lease rates.
Remember that on a daily business day basis, nearly 250 million oz of paper silver derivatives trade daily in London which is well above the threshold of floating available silver bullion underlying that overleveraged price discovery market.
Cut to silver industry spokes group The Silver Institute this week, which republished front and center a doozy of a report.
Starting with a headline "Majority of Above-Around Silver Stocks or Inventories are Unavailable to the Market Regardless of Price."
I'll leave a link to their report in the show notes below, but probably the biggest doozy of their 55 year study was the following admission of derivatives running the global price discovery markets.
"There appears to be no correlation between the price of silver and above ground stocks."
In other words supply and demand did not matter in the 1980 bull run, nor the early 2011 bull run.
They were more so investment driven bull markets and I would argue levered longs in derivative markets on a winning streak likely catching wrong sided and taking them to the cleaners.
Will supply and demand ever matter in the global silver price discovery markets?
Probably, but it might only be after a manic price climb in silver prices where the market eventually finds a better balance between the persistent deficits we have had the last 5 years or so, and the likely decade to come given current demand forecasts looking out into the future.
It is after all phony derivative price riggings that have created this global silver price divergence climbing walls the past 5 years.
For this to come back in line it is likely going to require a magical move for silver to come, be it driven by fundamentals or derivatives blowing back in the faces of artificial price signals for decades running.
I know, to unstudied normies this all sounds like a silver nut ball but we're talking about the biggest uncovered debt binge in the history of finance. For gold and silver to go berzerk again is merely history rhyming in time.
You don't need to take my word for it though. Maybe instead listen to long time silver bull and soon to be multi-fiat billionaire again mine owner Eric Sprott. Who likely many of us suffered through the abysmal humiliation of the 2010s only to grow our positions more outsized and concentrated for this building bullion bull.
Have a listen to his bullish silver bullion conviction commentary this 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.
