Gold and Silver Prices Fall After The Spike: What Happens Next?

Key Concepts

• Precious Metals Market
• Gold, Silver, Platinum, Palladium prices
• Market Volatility and Uncertainty
• Economic and Political Environment
• London Unallocated Silver Inventories
• Silver ETFs (Exchange Traded Funds)
• Precious Metals Advisory
• CPM Group

Precious Metals Market Overview

Jeffrey Christian provides an update on the precious metals market on Thursday, November 13th, from a hotel room in the Midwest. He notes that precious metals experienced significant price fluctuations today, with both rises and falls.

Gold Prices

• Gold reached a high of slightly over $4,200.
• It subsequently declined, trading in the $4,100 range.
• Currently, the price is around $4,173.
• Gold prices are consolidating following a substantial run-up in September and October, and a decline in the latter half of October.

Silver Prices

• Silver briefly exceeded $53 today.
• It then fell to a low of $52.80.
• Currently, silver is trading around $52.86.
• Similar to gold, silver prices are consolidating.
• There is a general tendency towards higher prices for both gold and silver, but significant uncertainty and anxiety persist regarding the economic outlook.
• The White House has indicated that depressing economic data might not be released, adding to the uncertainty.
• Increased anxiety and uncertainty are expected to continue, leading to volatility in silver prices as they consolidate.
• In the long run, the global situation is expected to support rising precious metal prices due to continued investor interest.

Platinum and Palladium Prices

• Platinum is currently trading around $1,600.
• Like gold and silver, platinum prices are consolidating, with traders trying to gauge the current and future state of the economy.
• Palladium prices are approximately $1,460 as of Thursday evening in North America.

Analysis of Silver Inventories and ETFs

Jeffrey Christian delves into specific data regarding silver, referencing a previous video on "The Real Silver Market" and information from the November Precious Metals Advisory.

London Unallocated Silver Inventories

• Sharp Rise in October: London unallocated silver inventories have increased significantly.
• Data Source: This data is reported by depositories participating in the LBMA (London Bullion Market Association) data collection program.
• October Additions: Approximately 53.8 million ounces of silver were added to London inventories in October. This silver was imported from New York, Shanghai, and other locations.
• Shift from Allocated to Unallocated: An additional 19.9 million ounces of silver, which were already in London inventories but allocated to silver ETFs as of the end of September, shifted to unallocated status. This occurred as investors sold off these ETFs due to rising silver prices, liquidating approximately 19.9 million ounces.
• Net Increase: The total net increase in unallocated silver inventories in London during October was approximately 73.7 million ounces.
• November Trends: These trends have continued into the first half of November, albeit at a slower pace.

Silver ETF Inventories

• October Sales: Globally, investors sold approximately 10.9 million ounces of silver ETFs in October.
• London's Role: A greater volume of ETFs holding metal in London were sold compared to the net global ETF sales. Specifically, 19.9 million ounces of allocated silver held by London-based ETFs were sold, contributing to the overall decline.
• Year-to-Date: Despite the October decline, year-to-date, there has been a net addition of about 143 million ounces to silver ETFs.
• Historical Context: The chart showing annual changes in silver held by ETFs indicates a significant increase in 2020. Through October of the current year, the net additions are among the second or third largest annually, with two months remaining.

Future Outlook and Services

• Jeffrey Christian anticipates returning to New York next week and will provide a further update on Tuesday.
• He directs viewers to the CPM Group website for purchasing yearbooks and single issues of their monthly Precious Metals Advisory, which offers detailed reports on gold, silver, platinum, palladium, and rhodium.
• Interested parties can contact CPM Group at info@cpmgroup.com for inquiries about their research, consulting, and advisory services.

Conclusion

The precious metals market is characterized by current price consolidation following recent rallies, coupled with significant economic and political uncertainties. While there's a long-term positive outlook for precious metals due to investor interest, short-term volatility is expected. Specific data on London unallocated silver inventories shows a substantial increase in October, driven by imports and a shift from allocated ETF holdings. Global silver ETF sales also occurred in October, particularly from London-based holdings, though year-to-date ETF inflows remain strong.