Some sort of Black Swan event will come out of nowhere and cause an explosive move in gold and silver – Bill Murphy on Shadow of Truth
In the absence of intervention, gold and silver would be trading at a level that is a few multiples higher from they “trade” now. At some point, some entity will want to take possession of a big “chunk” of gold or silver and will stand for delivery of the physical with the intent to remove that gold or silver from COMEX vaults.
For now, the big accumulators of physical gold (China, Russia, India) are content with the current rigged market price of gold as long as the West can continue to make deliveries into these countries. But at some point the West’s “cupboard” will be bare and big buyers will see what the COMEX really has in its vaults. It’s at that point when the precious metals market will become interesting.
There is always the threat that the Shanghai Gold Exchange begins arbitraging out the price difference between the physical market (eastern hemisphere) and paper market (Comex, LBMA). Currently, silver trades in China’s physical settlement market (Shanghai Futures Exchange) at a significant premium to the price on the COMEX paper market. The week of October 17, 2016, the average difference was well above $0.80 per ounce. This represents approximately a 45% difference. How large must the difference become before the physical market naturally overwhelms the paper market? The difference in the physical gold market is not quite as dramatic as the physical silver market, but it seems a natural progression will occur in the not too distant future. The physical market is filled with people that are not interested in paper contracts. These people are in real markets located in the eastern hemisphere – China, India and other countries. In these countries, gold is either part of the culture or there is an understanding of gold’s role as a currency.
In today’s episode, we sit down with GATA/LeMetropolecafe.com’s Bill “Midas” Murphy about the extreme intervention in the precious metals market and the catalysts that will eventually override the Central Bank intervention.