X-Spaces: Precious Metals Defy Expectations - Silver New Highs & Backwardation

In this episode of The Competent Investor, host Tom Bodrovics engages with market analyst Bob Coleman and contributor Jim Hunter to dissect the evolving precious metals landscape, focusing on gold and silver amid a global bull market. The discussion highlights structural shifts since the 2008-2011 cycle, including reduced futures open interest, which has tempered leverage and whipsaws, though silver remains volatile due to its small market size and susceptibility to stops. Key insights include the interplay of backwardation and contango, where spot prices exceeding futures—driven by physical demand from fabricators and investors—creates arbitrage opportunities, potentially reversing metal flows from New York to London to alleviate tightness and elevated leasing rates.
Bob unpacks Basel III's role in de-leveraging unallocated accounts, boosting physical demand from Asia (e.g., India and China) while Western retail selling earlier this year gave way to post-Labor Day buying from high-net-worth individuals, tightening specific products like sovereign coins and rounds. ETF inflows, such as SLV's recent 5 million share creation, underscore paper market influences, but borrowing fees spiking to 9.8% signal dislocations, with authorized participants struggling to provide liquidity despite physical backing. Manipulation is framed nuancedly: short-term spoofing by banks affects daily pricing but hasn't derailed long-term gains (gold up over 10x this decade), while industry greed—high buy/sell spreads and sensational marketing—has eroded retail trust more profoundly, pushing flows to ETFs. Broader risks include counterparty exposure in ETFs, sub-custodian vulnerabilities under London law, and energy-intensive mining costs rising amid industrial demand for silver in solar and batteries.
The panel views metals as a confidence barometer against fiat debasement and systemic debt, with central banks stockpiling gold as a hedge. Long-term bullishness prevails, though mining stocks appear overbought, and volatility looms from potential economic warfare or bubbles. Emphasis falls on physical ownership for true risk mitigation in an analog world increasingly strained by digital narratives and energy constraints.
Timestamps:
00:00:00 - Introduction
00:02:55 - Silver Market Changes
00:07:20 - Market Structure Differences
00:07:21 - Backwardation Versus Contango
00:10:10 - Metal Flow to London
00:13:07 - Basel III Impact
00:22:14 - Physical Supply Tightness
00:29:27 - Paper Versus Physical Markets
00:46:54 - ETF Borrowing Mechanics
00:48:00 - Market Manipulation Discussion
01:19:26 - Futures Market Update
01:39:29 - Audience Questions Session
02:55:02 - Concluding Thoughts
Bob Coleman Guest Links:
X: https://x.com/profitsplusid
Website: https://www.goldsilvervault.com/
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.
Jim Hunter - Registered Commodity Broker with Allendale
X: https://x.com/JimSuncomm1
Website: https://allendale-inc.com