Summary
- Silver is trading above $30 per ounce at the start of 2025, with analysts predicting it could break its 1980 highs after showing strong performance in 2024.
- A significant price divergence has emerged between COMEX silver futures and London spot prices, with futures trading nearly $1 per ounce higher than spot prices, partly due to fears of potential Trump tariffs.
- The COMEX silver futures 200-day moving average is approaching $30 per ounce, a level not consistently seen since 2011-2012, and CFTC Chairman Rostin Behnam will be departing on January 20, 2025.
- COMEX deliverable registered silver inventory has increased from 30 million ounces in summer 2023 to over 73 million ounces in early 2025, while London silver inventory reached near all-time lows of 827 million ounces in December 2024.
- The Silver Institute reported a global silver supply deficit of 282 million ounces in 2024, with demand reaching approximately 1.3 billion ounces compared to just over 1 billion ounces of supply.
- The market is experiencing near-record wide contango (future prices higher than current prices), a situation not seen since the 1979-1980 silver bull market.
- As of January 10, 2025, spot silver is trading around $30.60 per ounce, while gold is approaching $2,700 per ounce, with the gold-silver ratio briefly dipping to 87.
- China's central bank (PBOC) added 10 tons of gold to its official reserves in December 2024, marking two consecutive months of additions after a pause in mid-2024.
- Poland added 21 tons of gold in November 2024, bringing its total additions to 90 tons in the first 11 months of the year, as it works toward its goal of holding 20% of national sovereign savings in gold bullion.
- Central banks globally were on pace to purchase approximately 1,000 metric tons of gold bullion reserves in 2024, continuing the trend from 2022 and 2023, indicating an ongoing bull market in gold bullion.
This week Tavi Costa of Crescat Capital wrote, "it’s hard to find a better-looking chart, in my view, particularly with over 50 years of historical perspective.
After numerous failed attempts to break into new highs, investor sentiment has grown weary, and confidence in a major breakout has waned.
This kind of fatigue often sets the stage for contrarian opportunities—moments where investors shift from being caught off guard to experiencing a wave of FOMO as explosive moves materialize.
Silver is approaching this moment in my view, and after a strong performance in 2024, I believe 2025 will be the year the metal will finally take out its highs from 1980.
To start 2025, spot silver is again trading over $30 oz.
But the front month COMEX Silver futures contract is currently trading nearly $1 oz higher than spot derived in London.
And that is the major story of the precious metals markets of late.
Also of interest for silver bulls is the fact that the COMEX silver futures contract 200 day moving average is about to clear $30 oz which is a level of rarified air throughout this full fiat currency era. One has to go back to the years 2011 through 2012 to find a timeframe in which that 200 day moving average hovered above $30 oz for long.
Speaking of the $30 oz TAMP line, it was announced this week that CFTC Chairman Rostin Behnam will be departing from heading the agency on Jan 20, 2025.
Continued fears of Trump tariffs are again sparking this latest spot vs COMEX futures silver price divergence. Hitting nearly a $1 oz difference yesterday as reported by Bloomberg and others.
The bottom blue line on this chart shows a longer 1 year time frame measuring London spot vs COMEX futures silver price divergences. You can see a spike early last month in Dec 2024 and of late to begin this year in Jan 2025.
A similar historically high premium for COMEX copper futures above LME spot is also forming given the current concerns over potential coming Trump tariffs. Thus metals like copper and silver are being pulled stateside by traders who want to avoid having to pay extra tariffs potentially later in this year and to follow.
Here is another illustration of the situation in the silver market at the moment, a market that is now near record wide contango (the opposite of backwardation). The far left bar being cash or spot price for silver, and the far right bars being silver futures priced out until Dec 2029.
Here is where this current vs furthest future pricing discrepancy for silver stacks up when compared to all data throughout this full fiat currency era.
Basically we have to go back to the late 1979, early 1980 silver bull market to find such large nominally wide near to later future contract price spreads.
COMEX deliverable registered silver inventory levels have more than doubled from their near 30 million oz low in the summer of 2023 to now just over 73 million oz to start 2025.
Similar to silver inventories reported by London, much of COMEX silver inventories are unsecured silver reportedly backing many of the world's largest ETFs like SLV for instance.
The LBMA reported silver inventory levels in London fell -23 million oz to close last month Dec 2024, nearly an all time low level there of some 827 million oz.
Of which reportedly 551 million oz is reportedly spoken for by unsecured silver ETF holdings in London.
That leaves a semi-opaque 276.5 million oz 'float' of silver in London, with no way of fully knowing how much of those silver bullion inventories are available under the right market conditions.
The Silver Institute this week published estimates for the World Silver Supply Deficit in 2024 at -282 million oz, meaning the world used or demanded about 1.3 billion oz of silver last year for industrial inputs, investment, and net silver ETF inflows compared to just over 1 billion oz of silver supplied by new mining metals and recycled silver supplies.
We apparently are running a just in time world silver market hovering around the key $30 oz TAMP line with no end in sight for supply deficits for the silver market to come.
Yesterday Daniel Ghali, senior commodity strategist of TD Securities, discussed the impact potential new tariffs on the physical 1,000 oz silver bullion bar sector specifically (COMEX vs London supplies). His insights suggest he will likely also be in the falling spot GSR camp for 2025.
On the other side of this short break, we will examine this week's trading action in spot silver and gold markets.
As well as see which central banks have been recently reporting having bought more gold bullion reserves, as the bullion bull market over bond bear market trade continues in record size for the third year in a row running.
I am still traveling this week and creating this Week's Bullion Market Update at 10 AM eastern this morning Friday Jan 10, 2025.
The spot silver and gold markets are trading well to begin the day and are likely to finish the week up overall.
The spot silver price just popped trading close to $30.60 oz bid and the spot gold price is threatening to close in on $2,700 oz.
The spot gold silver ratio briefly dipped to 87 and we will see if the falling trend continues in this current rally.
China and their central bank the PBOC declared adding another 10 tons of gold bullion to her official reserves in December 2024. That is now two months in a row of Chinese gold tonnage additions after a brief hiatus in middle 2024.
Other major central banks of note who also declared adding tonnage to their Official Gold Reserves include Poland adding 21 tons in Nov 2024 and 90 tons overall through the first 11 months of last year as it seems destined to reach its stated goal of securing 20% of the nation's sovereign savings owned in gold bullion outright.
India, Uzbekistan, and Kazakhstan are other recent buyers of more Official Gold Bullion reserves.
Estimates are that on net central banks were on pace to buy another 1000 metric tons of gold bullion reserves in last year 2024 alone. That on top of their more 1,000 metric ton gold bullion reserve buying sprees in 2023, and 2022 respectively.
This amount of global government gold bullion buying is unprecedented in size and is signaling to the world at large that we are indeed in the midst of a gold bullion bull market still certainly in the early innings especially amongst near nonexistent Western world market participants.
And a very real growing threat of a silver stock out in 1,000 bar supplies to come.
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.
The Silver Institute Dec 2024 Silver Market Supply Deficit Estimate 2024 & Prior Years
https://silverinstitute.org/wp-content/uploads/2025/01/Silver-News-December2024.pdf
BNN clip source: Impact of tariffs on precious metals markets
