This episode, hosted by Tom Bodrovics, (Recorded morning of Dec 16) features a panel discussion with Eric Yeung, Just Dario, and London Paul to delve into the current dynamics of the silver market. The conversation highlights several key developments, including significant contracts on exchanges, particularly the COMEX, where a large number of contracts are standing for physical delivery. This trend is attributed to projections of increased industrial demand, particularly from Asia, driven by the growing need for silver in electric vehicles (EVs) and semiconductors. The panel discusses the unusual timing of these contracts, typically seen in December, and the potential implications for the market.

The discussion also touches on the recent outage experienced by the CME, which some panelists suggest was orchestrated to manage a large request for physical settlement. This incident is seen as a maneuver to control the price of silver, which has been rising despite attempts to suppress it. The panel notes that the physical demand for silver is outpacing supply, leading to a tight market and increased lease rates at the LBMA.

London Paul emphasizes the global strain on physical silver, citing increased demand from China, Russia, and India. He notes that China’s recent margin hikes on the Shanghai Futures Exchange are aimed at flushing out speculative paper positions, rather than addressing the underlying physical demand. The panel agrees that the market is increasingly driven by physical demand, with open interest in paper contracts remaining low despite rising silver prices.

Eric Yeung highlights the potential for significant volatility in the silver market, particularly as the COMEX approaches its delivery month in March. He suggests that the market could see extreme price movements, including limit up and limit down days, as physical demand continues to outstrip supply. The panel also discusses the potential for more outages at exchanges and the importance of monitoring lease rates and backwardation in China as indicators of market stress. Overall, the discussion underscores the growing industrial demand for silver, the tightening of the physical market, and the potential for significant price movements as the market continues to navigate these challenges.

Timestamps:
00:00:00 – Introduction
00:01:24 – Contracts Standing for Delivery
00:06:01 – Open Interest and LBMA Tightness
00:10:25 – Chinese Industrial Demand Surge
00:12:38 – CME Cooling Outage Analysis
00:20:13 – Shanghai Margin Raises Impact
00:30:42 – Backwardation Driving Demand
00:34:12 – Shanghai Silver Prices Parity
00:37:38 – Future Price and Retail Shift
00:43:45 – Samsung Battery Silver Needs
00:51:10 – Market Stress Indicators Ahead
01:09:11 – Concluding Thoughts

Eric Yeung Guest Links:
X: https://x.com/KingKong9888

Just Dario Guest Links:
https://justdario.com

Guest Links:
X: https://x.com/thesiriusreport
Website: https://www.thesiriusreport.com/
YouTube: https://www.youtube.com/@thesiriusreport

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