Summary
- India purchased a record 2,200 metric tons (70.7 million ounces) of silver in February 2024.
- This is more silver than the US Mint produced in American Silver Eagle coins over the past three years combined.
- The silver will likely be used for lithium-ion battery production in a new Indian gigafactory.
- Almost half of the silver (1,000 metric tons) was imported in grain form from the UAE, which offers an import duty of only 8%.
- The remaining silver came from London and was likely stored in unsecured vaults.
- This surge in silver buying is similar to what the US experienced after World War II to fuel its economic growth.
- The price of silver is expected to rise soon due to increased demand.
On the heels of large physical gold buying in China this Q1 2024.
It was reported today by Metals Focus that last month February 2024, India made its largest monthly import of physical silver on record.
Before we get into speculation about who and why for such big buying seemingly out of nowhere.
Let's put last month's 2,200 metric tonnes of silver imports into India in size context.
This is just over 70.7 million troy ounces of silver to one country in one month.
Equivalent to more than 70,700 of these industrial sized 1,000 oz bars.
India last month alone imported more than the US Mint produced in 1 oz American Silver Eagle bullion coins in 2021, 2022, and 2023 -- combined.
In terms of monthly silver import data, when this 21st Century chart gets updated, the orange bar will blow up and off the chart.
I know, we're all wondering about it. What in God's green Earth is India up to buying so much physical silver?
Well it looks like one of the world's largest lithium-ion-battery gigafactories is beginning operations this quarter Q1 2024. And some of the largest players in the physical global gold and silver market are associated.
Now I am not suggesting all of this record sized import flow from last month is alone to build batteries. But it most certainly could be half given this Q1 2024 factory's kickoff.
A few further items to break down from today's reported data.
Almost half of or about 1,000 metric tonnes of this record silver imported into India last month was in silver grain or tiny bead form. That was provided by the "value add' that the UAE provides Indian importers.
Indian importers importing silver from the UAE also enjoy a new trade agreement between the two countries that only pay a +8% duty or tax compared to the current +15% duty or tax on silver imports from elsewhere.
How much you want to bet the powerful Indian government connected businessmen behind these coming battery and solar factories are the ones getting the subsidized reduced tax silver grain imports?
Moving to other places for which mass silver bullion exported to India from last month. It warms my heart to see the City of London coughing up over 600 more metric tonnes from it diminishing mostly unsecured silver vaults.
The local premium dip on the bottom left chart does suggest that Indian jewelry manufacturers and local silver dealers also took large imports of silver locally, hence the collapsing local premium of silver in India of late.
For an emerging market like India on the cusp of massive growth in the coming decades, this is merely history rhyming.
If we look back at our very own post WW2 US empire, the blue bars here represent gigantic amounts of silver we net imported decade after decade, because our domestic silver production couldn't come close to generating what we required to become a 'developed economy'.
A similar phenomenon is now happening, but in a larger faster fashion in 21st Century India.
You don't mine enough? Well, you're gonna have to buy and import enough.
Better get busy, cause China is also paying through the eye to locally acquire physical silver.
And this yearly Indian silver price chart is threatening to breakout, soon.
After this brief message we're going to see another real time forewarning of a burgeoning commodity super cycle. And how this record price explosion in chocolate beans historically front runs major moves for silver bull markets that follow. Stick around.
And don't forget to sign up below, for your chance to win 500 Tree of Life Silver Bullion Coins!
Gold finished this week slightly down from it record nominal price run last Friday. The spot gold price again closed over $2,150 fiat US dollars per ounce, and has now completed 17 weeks in a row above the building $2000 oz price support level. It wasn't too long ago that price level was resistance.
The spot silver price popped a bit this week closing above the $25 oz threshold. It will be interesting to see when we next make a run at $26 oz, possibly that's next week.
As a result of silver's relative strength this week, the spot gold silver ratio fell to a still historically high level of 85.
With Bitcoin also recently near its all time price high, it's not surprising to have seen appreciation and increasing momentum capital inflows into the recently launched unsecured ETFs. As western unsecured Precious Metals ETFs have been net selling over the last few years, underlying physical bullion bars have flowed east. Meanwhile unsecured ETFs in Bitcoin have now ballooned to 1/3rd the notional value of all precious metals ETFs. $67 billion in BTC ETFs vs $198 billion in unsecured precious metals ETFs.
But governments and their central banks have not been buying unsecured ETFs in either Bitcoin nor GLD or IAU.
They've been buying gold bullion in record size instead typically taking direct delivery within their respective jurisdictions.
Sure, since Bitcoin's start in 2008 it has grown massively - as we all know. Bitcoin's current market cap now stands at $1.35 trillion fiat US dollars.
Meanwhile gold the world over since the end of 2008 has gained close to $10 trillion overall in its net market cap.
In the end, all of finance rests on a bedrock of growing gold value. And like human nature, that is unlikely to change in our lifetimes.
Turning to the collapsing commercial real estate market and reported bank holdings in percentage terms around the USA.
Not surprising that recently privately bailed out New York Community Bank is concentratedly stuffed to the gills with bad commercial real estate loans. But large US commercial banks also have large admitted exposures. And with accounting rules increasingly tossed to the side and postponed since the 2008 GFC, only omniscience really knows all that's on their books properly marked to market.
The FDIC has recently shown us that the largest spike to levels not seen since late 2008 early 2009 in non performing commercial real estate loans is currently held with the mega commercial bank class, not the smaller regional banks.
CNBS was bad this week, same author as last week's gold propaganda. This week they managed to insinuate that anyone buying gold or silver bullion is an end of the world kook even as governments around the world are buying gold bullion in record volume.
They even had enough nerve to again put in print the ridiculous claim that gold has risen around 1% a year on average over the last 100 years.
Again, stop treating your readers like idiots and propagandizing your left leaning audience to not get prudent bullion positions.
I tweeted directly to the author to rescind her last two week's article errors after finding the likely source of their error in reporting.
Turns out William Bernstein wrote this in 1996 when gold was around $380 in the 16th year of a brutal long secular bear market at the time. Even at then gold had returned 4.2% per year, as he pretended to know what price inflation had been over 70 years of time.
So that's US based CNBC gold propaganda. Let's turn to CNBC international for a professional adult to speak on behalf of where gold is at the moment.
Lots of loud calls trying to humiliate and stir further Russian hate this week out of the European Union.
Their finger pointing goes all the way back to World War 1 when Romania sent 01.5 metric tonnes of gold there for safekeeping in Russia during World War 1. It was never returned.
Of course this is all happening while the US and many in the EU are considering jacking $300 billion in Russian US bond savings and handing over the Ukraine and the WEF dreamers who will likely siphon much of the proceeds supposedly to rebuild the war torn nation.
So 91.5 metric tonnes of stolen WW1 Romanian gold is just under $7 billion in current value.
Would they get this back if the US and EU steal Russia's $300 billion?
Not a chance.
After all, if we were to go down that road, there's lot of South American countries to reimburse for mines looted to help world trade begin.
Let's get more reparations from Nazi Germany for all the gold the stole throughout Europe.
Japan owes China about 6,600 metric tonnes after looting the former capital of Nanjing in 1937.
Instead this kind of nationalistic button pushing is how wars get fomented. Knock it off Europe, you collectively lead the world with over 11,000 metric tonnes of gold at the moment. Pipe down before emerging markets and once colonized African nations start demanding their gold back from you.
And to finish this week with some sweet Cocoa to Silver bull market charts.
Cocoa COMEX futures blew through $8,000 today going exponential.
Earlier this week I took a side by side image of its full fiat currency era chart on the left versus fiat US dollar silver's chart on the right since 1970.
While these markets fundamentally speaking have nearly nothing in common, their respective long term charts when juxtaposed over one another paint an interesting front running picture cocoa first in black with yellow price boom highlights, silver later in pink making major bull market moves higher.
This third silver bull market following this latest record price cocoa moon move, should prove to be the sweetest of all time.
That will be all for our weekly SD Bullion Market Update.
As always to you out there, take great care of yourselves and those you love.
