Something Huge Just Snapped in London’s Silver Market… | Craig Hemke & Rob Kientz
A very different internal setup is supporting Silver’s price strength than in past rallies. This move is not being driven by speculative excess, but by tightening conditions beneath the surface.
Craig Hemke and Rob Kientz note that while gold has seen open interest climb from roughly 400,000 toward 500,000 contracts as prices rise, silver’s open interest has remained essentially flat. That suggests fewer new paper contracts are being created, even as prices advance. At the same time, COMEX inventories and deliverable supply remain constrained, increasing sensitivity to physical demand. Historically, silver rallies fueled by leverage end quickly. This rally looks different. Rising prices without expanding paper supply point to absolute tightness, not hype. The story isn’t about imminent exchange failure—it’s about a market quietly moving higher as available silver becomes harder to source.
Silver’s advance is revealing a shift in how the market is being structured rather than how it is being traded. Unlike previous rallies fueled by expanding leverage, this move has unfolded with little change in COMEX silver open interest, even as prices trend higher. That absence of contract growth points to restraint, not speculation. In contrast, gold continues to see rising open interest alongside price gains, highlighting a divergence between the two metals. Another notable change is the reduced participation of large U.S. banks on the short side. This behavior differs sharply from past cycles, where banks routinely capped rallies with new supply. This quieter structure suggests silver is advancing without the usual paper pressure. As debt loads expand and currencies steadily lose purchasing power, metals are responding to devaluation dynamics rather than short-term trading narratives.
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