Now it’s gold’s turn…

Wednesday’s FOMC statement confirmed that money-printing resumes, set to undermine the dollar in 2026. Estimates of future inflation will increase and gold and silver rise further.

The star of the show this week was silver, as the chart below illustrates. The message being sent to derivative markets should alarm them: there just isn’t any physical liquidity to support the mountain of silver delivery obligations.

Both gold and silver have had a good week, with gold beginning to stir. In European morning trade, gold at $4318 is up $220. But silver’s rise was spectacular. At $64.10 this morning, it is up $5.90 with a seemingly unstoppable momentum driving it even higher.

We make no apology for repeating an important chart, showing how despite a soaring price investors in the form of futures speculators remain firmly on the sidelines:

Note how open interest has declined since silver’s peak on 20 October. Moderate speculative demand had taken open interest up to 175,000, when the bulls rightly expected a reaction, which took the price down from $54.40 to $45.60. They continued to sell until silver made a big move into new high ground on 28 November. They are now out of the market, which is being driven purely by liquidity shortages, resulting in elevated lease rates again in London.

Where does this take silver, and what are the consequences for a financial system under increasing pressure?