I’ll show you how low that is relative to the years past. We’ve only gotten close to that level during the 2008 financial crisis. Involve how gold and silver prices are a major consequence of less interest, less open interest and less trading in the golden futures market because it doesn’t break. The influence of the gold and silver futures market on the gold and silver price doesn’t break overnight. It’s not one thing that is suddenly there and suddenly isn’t, but it erodes and we are seeing that erosion now because as open interest remains very, very low, meaning liquidity in the gold and silver futures market is very low.

That makes the price more volatile and that is exactly what we are seeing now. So be careful what you wish for. We do all wish for the gold and silver price to decouple from the futures market, which is an unjust price because it sets the dollar as the money in golden futures is the commodity on which they’re being traded, which is not the monetary reality of things. It’s not necessarily what is done on the golden silver futures market that is so unjust, but the existence of the market itself, really all other commodities should be priced in gold and silver ounces and dollars should not be traded for gold and silver ounces on a futures contract basis.

But in any case, we are now seeing what happens when the physical market decouples from the futures market is going to get more extreme from here. We are also seeing something very interesting in gold miner stocks, gold and silver mining stocks. They are not declining in gold terms as they were during the last gold and silver bear market. They are near their highs in gold terms priced in gold ounces. Gold and silver mining stocks are still very near their recent highs, which means that this is something else. This is not a bear market.

This is the dollar trying to reassert itself in a global crisis in which we are in as the Straits of Hormuz are still closed or they’re opening up slightly. And tomorrow apparently is the open the effing straits day. As also the seventh day of Passover, the seventh day of Pesach when it was God opening the straits of the Red Sea. For the Children of Israel, is that a coincidence? I don’t know. And finally, we have Japanese rates breaking the 2.4% mark that hasn’t been hit since the Asian financial crisis of 1998.

This is the final support for rates. And after that we are in outer space for Japan and Japan gets most of its oil. I hear 90% or more from the Straits of Hormuz. They are in dire straits pun intended. And if they fall apart, the entire Western monetary system falls apart. The entire fiat monetary system, which is based on the dollar with the yen a close second based on the deal that America made with Japan and Tokyo after the nuking of the country. As that unravels, the Western monetary system unravels and gold and silver reassert themselves as money indirect exchange because there is nothing else to do once the dollar and the yen collapse and they will collapse together.

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You can get the coin. You will never forget. And with that let’s go to the slides. Here guys is the chart that shows you that the gold price is decoupling from the gold and silver or the gold futures market. Gold open interest in price no longer correlate. We have a fluctuation in the gold price between four thousand dollars and fifty four hundred dollars. That’s a fourteen hundred dollar fluctuation area. And we see here that the price is going up and down up and down since February since the top here in gold and silver.

This is gold specifically we can see here since then open interest has collapsed to around four hundred thousand contracts. And the price has been going up and down wildly from about forty six or forty four hundred down here to about a top of fifty five hundred fifty four hundred and then a bottom again of around four thousand maybe forty one hundred. And then we’re up here to about forty eight hundred again. And you can see here in the correlating open interest numbers these are these bars down here. You can see pretty easily that open interest hasn’t really gone much of anywhere from February to the middle or the end of March.

And it has fallen from about four hundred thousand contracts to now about three hundred and fifty thousand contracts. And during the time when it has fallen from four hundred thousand three hundred and fifty thousand which hasn’t been replicated since the two thousand eight financial crisis. Mind you the price has actually gone up. So the price is going up on falling open interest. It is wildly zigzagging as open interest stays relatively steady which means that the activity in the futures market in gold is not really affecting the price so much. We’re seeing a withdrawal of liquidity from the contracts and it that is making the gold price a lot more volatile and it’s going to get worse as these markets continue to decouple.

There is no instant decoupling. It is a gradual process and it appears to be happening now. Everything that happens now is happening now. What happened to them? We passed them. When? Just now. We’re at now now. Now looking more deeply into the open interest situation relative to the price you can see you’re going back to two thousand and eight. This line over here is the two thousand eight bottom and open interest this horizontal line over here. And this is where we are now at about three hundred fifty thousand. We’re actually at even below this now.

This is about three hundred and sixty three hundred and seventy thousand and we’ve gone below that to about three hundred and fifty thousand now. So we are about over here where my pointer is circling. This is extremely low. This has not been hit since two thousand and eight over here but you can see these rectangles that I drew over here show you that in each major rally since two thousand eight before the financial crisis to now you can see there was a rally here with the price moving higher. This blue line is the gold price moving substantially higher.

And here you can see a peak in open interest up to about six thousand contracts. You can see the same thing here from the 2008 bottom until 2011 that open interest rocketed from about two hundred and eighty thousand contracts to about seven hundred thousand contracts. And you can see the same thing here at the beginning of the bull market after the 2015 bear market bottom in 2016 the price went up from about ten fifty four to about what is that fourteen hundred dollars and open interest spiked from about four hundred thousand to six hundred fifty thousand contracts.

Same thing over here in 2019 until the 2020 lockdowns there was an all time spike all time high to about eight hundred thousand contracts in open interest in gold contracts. That’s the amount of contracts that are open in the gold futures market. But here you see something different in the red rectangle. What is that difference? You see this enormous spike in price from two thousand dollars an ounce to about fifty five fifty six hundred dollars an ounce. That is more than a doubling. And what has happened to open interest. It has gone basically nowhere on net.

It was about four hundred fifty thousand contracts at the beginning of this rally. And now it is even lower. It is about three hundred and fifty thousand. We have actually lost about one hundred thousand contracts as this rally has progressed. You can see on a long term time scale or a medium term at least in the last two years that price has decoupled from the futures market over here. It is very obvious when you look at this comparative chart. Now what about silver open interest. We can see here I drew the black line where we are now at about one hundred fifteen thousand contracts.

We haven’t been this low since also around twenty twelve maybe. I didn’t go back that far on the chart here though. I think the last time we were at this number of one hundred fifteen thousand was around twenty twelve and we are substantially below the low and open interest that happened post lockdowns when the covid era began. There is no interest. There is very little liquidity in the silver futures market as well which means that prices of gold and silver are going to get a lot more volatile not as volatile as the dollar itself or as volatile as tech stocks are going to become.

Silver and gold are still going to be relatively less volatile than other derivatives. But as the decoupling progresses from the futures market we’re going to see some huge swings. Gold miners refuse to decline in gold terms. This is I think one of the biggest proofs that we are nowhere near a bear market in gold and silver. You can see here that how have gold mining stocks been acting in gold terms. They are still near their highs meaning this is an inverted chart. So the lower you go the more expensive gold stocks are in gold terms meaning how many ounces of gold does it take to buy one share of gold stock or gold stock index in this case the Huey.

So you can see we’re right near the bottom here so we’re right near the highs in gold stocks priced in gold. The fact that this has not gone up as it did during the bear markets of twenty fifteen and the huge collapse in gold mining stock shares in twenty twenty you can see that over here and there was another bear market in gold mining stocks from twenty twenty until twenty twenty five actually but we’re back down over here at five point seven eight and the low meaning the high in gold stocks relative to gold is at about five.

We are very close to that and we could hit it any day. This is not a bear market in gold stocks at all. Lift off time for Japanese rates. This chart came out this morning. We was over here in 1998 during the Asian financial crisis at about two point four. We have hit two point four two two and the reason this is happening at least the proximate cause is the fact that Hormuz is still blocked up by about eighty five eighty percent something like that. I’ll show the chart in the next few slides.

It might be the next one actually. I don’t know but as these rates go higher and higher Japan is risking a vortex over here or rates go higher and the yen goes lower because the yen basically is Japanese government bonds because most of what the bank of Japan owns that issues the yen is Japanese government bonds. So generally speaking the higher rates go the lower the yen will continue to fall. Hormuz actually is slowly opening up which is why I would ignore all headlines as to what Trump is saying as to what Iran is saying just watch the actual ships that are going through.

You can see here that we are at twenty percent of normal these used to be at about one percent of normal about a week ago or a week and a half ago we were at about ninety nine percent blockage. Now we’re at about eighty percent blockage. We have twelve ships going through in the last twenty four hours an average normal daily volume about sixty ships and you can see here here is the volume going up slowly over the last week. This is a week ago and we’re slightly higher now. The insurance premium is at about six point seven times normally used to be about twenty times normal.

So we do have a slow gradual opening up over the straight. Is this a trend or is this just a fluke. We’ll see. But as Trump shared in a very presidential truth that he truth. Now it’s strange that in the time of lies almost complete lies everywhere where nobody can tell the truth that the word truth has become a verb. But anyway he says that Tuesday is going to be open up the bleeping straight day which I think is kind of coincidental or interesting because that day is also open up the Red Sea Day.

It is going to be the seventh day of Passover. I’m going to be offline celebrating with my family and the rest of the Jewish people the splitting of the sea which will read in the Torah and we’ll see if Hormuz opens up on that day or not. And if Trump follows through on his word to blow up Iranian infrastructure which would make things a lot worse in terms of the dollar and prices who knows what would happen to silver and gold. But oil will probably go up in that event and eventually lead to the collapse of the dollar which will lead to the endgame.

Are we in that right now. Well if Trump destroys Iranian infrastructure and they retaliate by destroying the oil infrastructure of their golf neighbors probably. But I guess we’ll see what happens and I’ll see you guys after the seventh day of Passover. Have a good holiday for those who are celebrating whatever holidays they happen to be celebrating and I’ll see you guys at the end of the week. Bye. [tr:trw].

See more of Rafi Farber on their Public Channel and the MPN Rafi Farber channel.