CHINA VS COMEX: New Singapore Exchange Shocks Silver Market | Ed Steer

Key Concepts

• Bullion Banks/Big Eight Shorts: The eight largest traders in the COMEX futures market who hold massive short positions and exert significant influence over precious metal prices.
• Commitment of Traders (COT) Report: A weekly report detailing the positions of various market participants, used by analysts to gauge market sentiment and potential price reversals.
• Wash, Rinse, and Spin Cycle: A recurring pattern where bullion banks drive prices up to attract speculators, then aggressively sell to crash the price, allowing them to cover short positions at lower levels.
• Physical Supply-Demand Deficit: The structural imbalance where physical demand (led by China and the East) is outpacing available supply in Western vaults (LBMA/COMEX).
• 49s Fine (99.99% purity): The global standard for high-purity silver bars, increasingly required by Eastern markets, which differs from the traditional Western 39s fine (99.9%) standard.
• Short Squeeze: A market phenomenon where short sellers are forced to buy back contracts to cover their positions, driving prices sharply higher.

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1. Market Analysis and Current Setup

Ed Steer, a veteran precious metals analyst, argues that the current setup in the COMEX futures market is the most "wildly bullish" he has seen in 25 years.

• Short Position Reduction: Over the past year, the "Big Eight" traders have aggressively covered a significant portion of their short positions in gold and silver.
• Diminishing Returns for Shorts: Steer contends that the bullion banks have reached a point of "diminishing returns." Because long-term holders are refusing to sell their positions, the banks can no longer effectively suppress prices through spoofing or selling, as there is insufficient volume to facilitate further short covering.
• The "Bottom" Argument: Steer asserts that the market is currently at a structural bottom. He suggests that the recent price volatility is merely an attempt by commercial traders to shake out remaining longs, but the lack of available supply makes further downward manipulation nearly impossible.

2. The East-to-West Physical Flow

A central theme of the discussion is the massive migration of physical silver from Western vaults (LBMA and COMEX) to Eastern markets (Shanghai).

• Data Points: In the first few months of 2026, 165 million ounces of silver were shipped out of the COMEX. In the last six weeks alone, 38 million ounces were added to Shanghai inventories, representing roughly 13 days of global silver production.
• The "Sucking Sound": Steer describes a "giant sucking sound" as China hoovers up physical metal. He notes that Switzerland, a major refining hub, primarily transships silver to London, which then flows into Shanghai.
• The Limit: Steer warns that there is a "brick wall" approaching. Once Western vaults are drained of deliverable metal, the paper-based pricing system will likely collapse, leading to a short squeeze of "biblical proportions."

3. New Developments: Singapore Futures Contract

The video highlights the launch of a new silver futures contract in Singapore by ABX.

• Strategic Importance: Unlike COMEX contracts, this contract is specifically designed for physical delivery of 1,000-ounce, 49s fine (99.99% purity) bars.
• Standardization: The shift toward 49s fine purity is a global trend driven by Eastern demand. Refiners are increasingly forced to reformat and re-pour existing Western-standard bars to meet these higher purity requirements, further tightening the supply of "good delivery" bars in the West.

4. Strategic vs. Tactical Investing

• Strategic Necessity: Steer emphasizes that owning physical precious metals is a hedge against long-term currency debasement and fiat system instability.
• Tactical Timing: For those looking to add to positions, Steer advocates for a contrarian approach—buying when "blood is running in the streets." He draws a parallel to Warren Buffett, who maintains massive cash reserves waiting for market "washouts" to deploy capital. He argues that waiting for the crowd to confirm a trend results in missing the most significant gains.

5. Notable Quotes

• "The commercial traders can huff and puff all they want... but if all those traders that are on the long side... are not prepared to sell any more long contracts... the bottom is in." — Ed Steer
• "It’s a giant short squeeze in the making and the force shock of that we saw at the end of January. And trust me, the main event, the main earthquake is in our future." — Ed Steer

Synthesis and Conclusion

The main takeaway is that the precious metals market is undergoing a fundamental shift in power from the West to the East. The "Big Eight" bullion banks are struggling to maintain control as their ability to suppress prices via paper contracts is being neutralized by a physical supply-demand deficit. With inventories at historic lows and Eastern demand showing no signs of slowing, Steer concludes that the market is primed for a significant upward move, provided investors have the "nerves of steel" to hold through the engineered volatility of the "wash, rinse, and spin" cycles.