In Ted Butler's Archive


The turnover or physical movement of metal either brought in, by truck, to the COMEX-approved silver warehouses or that was removed, also by truck, from those same warehouses, accelerated last week to just over 10.3 million ounces.  Thanks to the magic of annualization (multiplying by 52), this week’s 10.3- million-ounce physical turnover in the COMEX warehouses is the annual equivalent of 535 million ounces or nearly 70% of the Silver Institute’s 2020 annual silver mine production of 784 million ounces. In other words, last week the annual equivalent of nearly 70% of the world’s silver mine production was physically moved in and out from 9 COMEX silver warehouses in and around the NYC metropolitan area. This is seriously strange.

No other commodity experiences this type of physical turnover. Why is this physical silver movement occurring? It can only be because of a great physical demand and tightness that requires constant withdrawal and replacement. As to why there is virtually no public commentary on this I’m really baffled. The turnover data are part of the same daily COMEX statistics that everyone sees.

The silver story only gets better. With just 2 billion ounces of silver bullion in the world (in 1,000 ounce bar form – the form that determines the price) –this silver is worth roughly $55 billion. If a decline occurs in the crypto and stock markets that have soared over the past decade and tens and hundreds of billions, perhaps trillions of dollars seek diversification – how could an asset currently valued at $55 billion handle such an inflow? The only possible answer is by adjusting the price radically higher. In the past, I have frequently described trying to put a great deal of money into silver in a rush as akin to trying to put ten pounds of flour into a one-pound bag – you’re going to make a mess. Only the mess in silver will be the spectacular price run-up.

When I mention that there is $55 billion worth of silver in the world that doesn’t mean there is close to that amount available for sale. Every ounce of that silver is owned by someone and only the smallest fraction of this silver may be available for sale at anywhere near current prices. So, the real equation is not the tens or hundreds of billions or trillions of dollars that may plow into an asset worth $55 billion, but into an asset where only a few billion dollars may be actually available for sale – if that. And remember, the higher an asset price goes, the more investors want to buy it and less want to sell it. In this context, $50 or $100 or $200 silver could easily prove extremely low as a target price.

For subscription info please go to

Start typing and press Enter to search