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Bob Coleman: The Physical Market will be Silver’s Driver

Tom welcomes back Bob Coleman from Idaho Armored Vaults. Bob shows us his recent presentation from the Silver Symposium.

Bob’s presentation explains how futures could influence the physical markets. Silver is still undervalued when compared with other markets. For silver to be comparable we would need to see the price around $65. There are times when silver outperforms stock markets and it appears to have excellent upside potential over the coming years.

Palladium isn’t correlating with ETF demand and that’s probably the result of industry demand. Platinum also shows similar patterns.

Silvers price tends to spike and there are times when ETF demand is high but the price drops. It’s hard to find strong correlations with ETF flows with silver.

The Comex is driven more by speculation and paper trading than the underlying physical metal. In addition, most investors don’t take delivery.

He notes that the trend with open interest in silver changes significantly after March 2020 and we’ve now dropped way below the long-term channel. There is the demand coming out of the market and moving into fabrication and minting.

Gold open interest has had a massive deleveraging of physical coming onto the exchange. The amount of paper contracts leveraged has declined significantly. He thinks gold is near a major contrarian entry point.

Bob discusses the complexities of the markets and why many investors have a difficult time understanding how everything works. His focus is on streamlining the process of getting physical delivery by handling most of the details. There are ways that physical investors can participate while reducing fees and risk.

Lastly, Bob discusses the possible risks of confiscation and currently, those seem low. Not much of the public is currently holding metals and he believes taxes are likely the ways the government will get money. A small amount of new money entering the silver market will have an outsized effect.

He recommends people review his presentation which is linked below.

Time Stamp References:
0:00 – Introduction
0:30 – Presentation Overview
5:07 – Silver & Markets
6:58 – Palladium & ETFs
8:56 – Silver & ETFs
12:48 – Discovery vs. Behavior
14:04 – Silver Open Interest
22:00 – Silver Drawdown
24:36 – Gold Open Interest
27:18 – Gold Bull Index
29:35 – Entry Opportunity?
30:46 – Available Inventory?
32:25 – Pension Deficits
34:38 – Deconfusing Markets
39:30 – Reducing Risk & Taxes
40:50 – Nationalization Risk
43:19 – Market Corner-ing
47:17 – Wrap Up

Talking Points From This Episode

  • Determining the impact of futures on metal prices.
  • Open interest for gold and silver.
  • Protecting your wealth and deciphering the metals markets.

Guest Links:

Bob Coleman is a Registered Investment Advisor since 1992. In 2001, he founded Profits Plus Capital Management, LLC (RIA) and Dollars and Sense Growth Fund. Recognizing the necessity for physical metal storage, he founded Idaho Armored Vaults and Gold Silver Vault in 2008. They are a distinguished and respected leader in the precious metals industry specializing in storage, transportation, shipping logistics, and security.

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