evening wrap, december 4

market vibes

“Following the light of the sun, we left the Old World.” Christopher Columbus 1491

Tonight, December 4, a super moon will delight us with a spectacular astronomical event, the “Cold Moon.” At its closest point, 216,000 miles from Earth, it will appear 8% bigger. As I write, it is already at 11 o’clock in the evening sky, and I could read a book by moonlight on my front lawn.

Unfolding tonight is chronology of events in the silver market from November 6 to settlement December 4. I have reprinted the same chart 3 times for ease of reference, prices and dates.

From October 17 to November 25 COMEX open interest fell steadily from 176,000 to 144,000, ostensibly as silver was shipped to London ahead of the large SLV option expiration on November 21. Apart from that, global movement of silver was intensely fluid, with millions of ounces in motion from New York and China to London and India. It still is.

From October 21 to November 10 silver trading was extremely orderly and well-behaved on a narrow range and light volume. Notes on the following days…truth, rumors, and narratives which I am sure most of you will recalll…. straight ahead.

November 6, SGE/SHFE silver inventories hit new lows as net outflows accelerated despite domestic refineries maxed out and rising imports. New narratives focused on acute shortages of silver, export controls, and hoarding in China.

November 13, Registered stocks were down 38M toz (20%) since Oct 1; LBMA physical silver up 54M oz (largest MoM in a decade). X posters called it “logistically impossible,” later reported as a pass-through to India. Narratives ran with a metal flowing East (China/India/Middle East) and “paper vs. physical battle” pre-OPEX in SLV. Prices topped and started a 10% drop in six sessions (see chart).

November 17, SGE silver inventories fell to a decade low.

November 18, A major Cloudflare outage (lasting 3 hours) shut down X, ChatGPT, and Spotify with 11,000+ X reports, plus additional X-specific degradations.

From November 13 to November 21, despite a frantic scramble for physical silver, silver traded down $6 from $55 to $49 and bottomed at 4:00 AM London time. I thought, as did others, that prices were forced lower. The OPEX settlements were not optimal but favorable for the shorts

November 25, Bloomberg confirmed Chinese silver stocks at new all time lows and said SGE declined to roll leases to LBMA due Dec 31. The “Leased silver recall” rumor went viral, potentially forcing 400M oz back to China, emptying Western vaults…a process of that size requiring a logistical nightmare. SGE/LBMA narrative: “bare cupboards.” Meanwhile, any sense of panic was masked by the holiday atmosphere and light volumes. COMEX silver closed up 5% in an orderly rally.

November 28, CME Globex/EBS halted for 10–11 hours due to “cooling failure” at its CyrusOne data center in Aurora, IL. Silver futures spiked to $56.77/oz pre-halt. The official explanation: “it was a single-point failure despite multiple redundancies.” Silver deliveries were delayed. A lot of tension, distrust, and focus on JPM in social media.

November 29, Markets reopen; Dec gold deliveries hit 18,896 contracts on first notice day ($4.5B record USD value). Silver: 737 November notices unheard of for a seriel month and 100% stood for delivery. Volatility spikes. The enraged Hindu BusinessLine lede alleged foul play: “[Data centers have backups],” so the “glitch” story is unbelievable. “Screens went blank to bail out trader!” Rumors on X: CME buying time for market makers to find metal… “outage intentional to hide no inventory left.”

December 1, Silver deliveries: 8,305 contracts (41.5M oz) in first two days vs. 138.2M oz registered. Gold: another 23,970 contracts (2.4M oz). The “Vault run” narrative is peaking; the CME’s “cooling glitch” fig leaf completely dismissed.

December 2 & 3, December silver open interest still has 2,361 lots outstanding. Total silver deliveries: 8,855 contracts (44.275M oz, 44% of registered stock). Backwardation widens. ZeroHedge: “Outage hides massive shortage.” Rumors: force majeure or cash settlements by March 2026.

December 4, Silver deliveries: 9,527 contracts total. Still circa 1,934 lots of December open interest is still outstanding.

These “events” have incited widespread allegations of manipulation, failure-to-deliver, pre-arranged trading, and exchange misconduct, particularly around the November 28 CME outage and off-hours price fixing. The claims, amplified on X and in media, bring back bad memories for silver traders, especially about JPM. However, as of December 4, 2025, there have been no publicly announced rule violations, investigations, or charges related to trading gold and silver futures from October to early December.

I would lay short odds there will not be any. The banks have adjusted rules and laws to enable every imaginable legal trap door imaginable over the years to assure they can escape periodic squeezes. Hyper-leverage shorting of futures and options is extremely profitable, and these blow-ups are cyclical. As I said this morning… 1980, 1997/1998, 2007, 2011, 2021, and here we are.

my vibe

The big difference today is that this isn’t a squeeze or cyclical blow off in the classical sense. It’s a six-year, ever-increasing shortage if silver, a notoriously dangerous market. A record amount of trapped money that even now, with every edge to escape, can’t get out. Demand for silver keeps rising and no matter how high prices go production will stay flat. Hecla’s CEO spoke about it on X yesterday.

The notoriety of these machinations to avoid a default has amplified the shortage narrative. In order to survive today, the shorts have assured a worse outcome tomorrow. IMHO.

Bon Iver

good luck in Asia!

JJ

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