Mexico has a Wild Card in the Tariff Game - Silver

in investing •  20 days ago  (edited)

  Good Friday Morning Folks,    

      Gold is trading lower this morning after a pretty good run with the price at $1,339.50, down $3.20 after it was pushed down to $1,334.30 with the high just above the now at $1,340.40. Silver is slightly lower as well with the price at $14.89, down 1.5 cents and right smack in the middle of its trading range between $14.94 and $14.84. The US Dollar is equally as flat, almost as if the Algos had no idea what today’s Unemployment report will say, with the trade at 97.035, up 3.8 points after reaching to 97.13 with the low at 96.96. All of this was done sometime before 5 am pst, the Comex Open, and the London Close.       

      Venezuela’s Bolivar price for Gold is now pegged at 13,378.26, taking off 16.98 Bolivar from yesterday’s price with Silver at 148.714, losing .599 of a Bolivar. Argentina’s Peso has Gold priced at 60,137.35, removing 77.06 of value with Silver losing 2.766 at 668.469 Pesos. The Turkish Lira is pricing Gold at 7,827.89 proving a gain of 81.38 T-Lira with Silver’s price at 87.0117 gaining .6743 in value.     

      June Silver’s Open Interest now shows a post of 5 with no evidence of a trade done during yesterday’s watch but somehow removing 45 contracts. So far today the Volume is still saying Zero, but with no trades reported during Comex, it’s hard to say what is going on. I was watching to see if another sizeable purchase would be agreed upon and did witness an order to purchase 78 more June Contracts at $14.885 but nothing shook the seller’s interest. Silver’s Overall Open Interest continues to grow proving the shorts have a problem and are the issue with the count now at 219,380 Overnighters, gaining another 2,953 more shorts in order to add liquidity against the physicals.     

      Just under 2 years ago, we had noticed a sizable jump in Open Interest in July and December 2019 Silver Calls. The numbers exceeded all other months (before and after these months) Open Interest by many degrees of measure. After all this time, I did review to see if this was an anomaly by checking option purchases 2 years out in time. Still, to this day these 2 months are the anomaly. All other 10 months of Silver Call Options Combined Open Interest total 20,999 (Call) Options. July 2019 Call Options still total 62,145 fully paid for “rights to buy” with December 2019 Calls totaling at 64,746. If I was to remove the September 2019 count from the 10 lot count, the total for all other (9) months besides these three side by side months equals 10,165 against these three months totals of 137,725 Open Interest. I would consider this an “imbalance in the force” but with the way our sector has been treated by just about everyone, I will remain on watch knowing that one day, we will see much higher prices in Silver. All joking aside, someone spent 10’s of millions of Dollars on these Call purchases long ago, and we are right now at the point of watching half of their purchases fail or win.      

      What an interesting moment in time we have, where all of this confusion comes together with Silver's Overall Open Interest still highly elevated, July Call Options coming off the board June 25th,  the American - Mexican Tariff standoff  still in play, with Mexico having a real tariff type wild card called Silver. A product the central planners and exchanges need dearly to keep Comex Silver “liquid”. We also have our Triple Witch Week coming up too, so we here we sit, still wondering about those July and December 2019 Call Options in Silver and what the real purpose is of those huge purchases? Have a great and wonderful weekend, keep your precious metals in hand, have positive no matter what, and as always …   

Stay Strong! 

J. Johnson  

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