Gold & Silver Shoot Higher Again, As Metal Starts Getting Drained From The US

Authored by Chris Marcus for Arcadia Economics; Submitted by Goldfix

What else can we say about the latest stunning move in the precious metals markets, aside from that I think we have safely reached the point where we are now watching history being made.

Obviously the price moves have been stunning. Two days of $100 plus gold gains last week, and now another one today.

Meanwhile, silver continues to rally as well, and although it has not yet reclaimed its 2025 high of $35.49, the futures were back over the $33 level at one point this morning.

Yet perhaps even more stunning is some of the news that has begun to emerge.

Because after months of seeing gold and silver flow from London to New York, in the past few days, metal has now started to leave the COMEX.

‘The arbitrage opportunity ended when Washington earlier this month confirmed that bullion would be exempt from President Donald Trump’s tariffs.

Without an incentive to hold metal in US warehouses, that gold may now end up going to other trading hubs. Comex stockpiles fell each day last week, with Friday’s outflow the biggest in more than a year and worth about $700 million.’

And where is it going?

It seems as if a new wave of gold mania has broken out in China.

So at the same time that metal has started to leave the COMEX, that Bloomberg article reports the following:

• ‘The Shanghai Futures Exchange saw trading volumes of the precious metal hit the highest level in a year last week.
• The buying frenzy in China has seen prices move to a premium of around $20 an ounce over international prices, reversing a discount it saw for the majority of the past year when domestic demand was weak.’
• Inflows to onshore ETFs, driven by retail investors, have set new records week after week. Last week’s flow topped 12.4 billion yuan ($1.7 billion), almost doubling the previous week’s peak.

The article also provided an interesting, if unsurprising reason for the shift.

“China may be encouraged to continue moving forward more actively to diversify its reserves away from the US dollar and treasuries given that it is at the epicenter of the trade war,” said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. The desire to reduce exposure to the US may see China “buying more gold to bolster its reserve,” Menon said.

Yet there’s more.

Because while this is happening, there was also a report that the US may be discussing settling their trade deficit with India by potentially sending gold and silver.

‘India is considering importing gold and other high-value items, including silver, platinum and precious stones from the US to address Washington’s concern of a significant trade deficit with India, two people aware of the matter said.’

To be clear, I have not seen any official US confirmation that this is their intention as well. But if this is being discussed, in the midst of the Chinese news, is it safe to say that we’re seeing the gold start to get drained?

‘The US is a leading producer of gold, silver, and platinum. India can easily source a sizable quantity of these valuable items from the US.’

If the story is confirmed, does that last part officially end the debate of whether gold is still money?

‘According to commerce ministry’s data, India exported merchandise worth $76.37 billion to the US in the first 11 months of current financial year (April 2024-February 2025) and imported goods of $41.62 billion, resulting in a deficit of $34.75 billion.’

So to balance it out (again assuming this report is accurate), the US would conceivably start sending its precious metals.

‘Imports of energy and precious metals from USA are some of the low-hanging fruits to reduce India-US trade deficit.’

We've seen this trend building for years. And the Reserve Bank of India had a particularly active year in 2024, with multiple gold purchases, as well as a repatriation from the Bank of England.

Again, this last note will take on more significance, when and if there’s a more official confirmation. But even aside from whether that ultimately ends up happening or not, I think you can start to see where this is headed.

Perhaps in another environment it would feel somewhat less clear. But given that this is in the midst of the United States government sorting out what they don't want to admit, in that the Treasury holders are going to take a loss at some point, whenever that day may be, it all starts to fit together.

I did talk about this a bit today on this afternoon’s show on the Arcadia YouTube channel. So if you'd like to hear a bit more about that, you may enjoy this one.

But perhaps that's enough to digest for today.

As of course I do hope you are setting aside at least a few moments to let it all sink in, and then sit back, relax, and appreciate that you’ve been well ahead of what the rest of the world is just discovering now.

Sincerely,
Chris Marcus