➡ The price of silver has been fluctuating recently due to various factors such as ETF withdrawals, supply chain issues, and market uncertainties. Despite the price drops, there has been a significant outflow of silver from ETFs and COMEX stockpiles, indicating a potential supply shortage. This situation is further complicated by the ongoing war and its unpredictable impact on the market. Lastly, the silver market in China is also experiencing a decrease in inventory, contributing to the overall volatility of the silver price.
➡ The U.S. is taking serious steps to secure strategic minerals, including silver, due to their importance in various industries, including the military. This was highlighted when the Pentagon asked mining companies to increase domestic supplies of 13 critical minerals used in semiconductors, weapons, and other products, just before launching strikes on Iran. Additionally, the U.S. is implementing mining reforms in Venezuela, allowing foreign companies to exploit gold, diamonds, and rare earths after removing Nicolas Maduro. Despite some controversies, these actions indicate the U.S.’s intent to control and secure access to these vital resources.

The silver price is getting clobbered again on Wednesday, although metal is on the move as you’re about to find out ETFs, COMEX, China, and more! Plus, before we wrap up, you’ll want to see what’s going on with some of those critical minerals and at least how fragile the supply chain could be. Well, hello there my friends, Chris Marcus here with you for Arcade Economics on Wednesday, March 11th. And as I mentioned, the silver price getting clobbered pretty thoroughly today, and we will dig into that. And also some of the interesting metal flows that we’re seeing with silver in particular, as well as some thoughts about the spread that continues to exist in China.

Mint’s confusion on whether that includes or does not include the VAT, so either case, we have silver down $4.03, 4.5% at $85.56. And if you take a look back out, basically since the war broke out on March 2nd, we had silver up at $96, came down to $78, has basically been pretty choppy since then. And as we talked about in the sub-stack yesterday, why gold and silver haven’t rallied, after the break out of the Iran war, short version is that I think nobody really knows what’s going on. We were sold, this was going to be a two or three day thing.

That’s changed a lot. Whether anybody really knows how that plays out or is going to play out, we’ll find out. But certainly what was presented back on March 2nd is different than what we are being told now, and I think the markets are trying to figure that out. But when you consider that, actually explains somewhat of what we’ve seen in the choppy price action. And we’ll actually touch on this more in tomorrow’s show of why specifically we haven’t seen more of reaction, because I know a lot of people have been frustrated by that. Although with that said, gold price, yes, down a little bit since that Sunday night open when it was over $5400, although still even down 55 bucks today, gold futures up at $5186.

And I might add, somewhat paradoxically, because last night the news was that three cargo ships were struck off of Iran’s coast. There is a Thailand flag cargo ship spewing out black smoke in the Strait of Hormuz, which would at least conceivably not indicate that things are closer to getting resolved, at least then as of a day or two ago. So to recap, two nights ago we had Trump said that things are going to be over very soon, the gold and silver prices rallied. Now we see ships on fire in the Strait of Hormuz and the gold and silver prices are selling off again.

And I would add that if there’s ever been an asset class where you don’t always get the typical reaction that you might intuitively expect, that’s gold and silver. We can perhaps like that or not like that, but expecting a 100% correlation in situations like this, somewhere in the bucket of a recipe for frustration. So in our case, we will talk about that more tomorrow. So if you’d like to hear more about that, hit that subscribe button and the notification bell. But let us now move on to some of the metal flows, because when you look at what has been happening in the ETFs, some pretty interesting data, because this part in the bottom here, when you see those red lines, that silver that is coming out of the ETFs.

And if we zoom in here to the three month chart, you can see from the ETFs, there’s been heavy withdrawals for the better part of 2026. Now we did have a couple of big spikes recently, so that’s helped to balance things out. Yet if we go back here to the two year chart, you can see that silver was coming into the ETFs all the way up until October. And what else happened in October? Ah, yes, India had a shortage, London had a shortage, went into extreme backwardation, metal had to come from the COMEX and China over to London, which has left us.

Well, we’ll get to the COMEX in a second, but has also left China in the situation where they have supply issues that continue on. And we’ll look at the spread in just a moment. So right at that point, that’s when we saw the reversal in the ETFs started going back in. And then again, as you can see, it’s really right there at the beginning of January before the price, which you can see if you look closely in the lighter gray line. So metal started coming out right before silver went up to $121. But the metal was coming out of the ETFs first, almost like they were front running this one.

And silver has continued to come out of the ETFs, even as the price has rebounded, which is further interesting, because as we have mentioned here before, here are the total COMEX stockpiles where on one hand at 345 million ounces, which is right here. Still historically a lot of silver in there, except for the run up that we saw in 2021. Now, with that said, well, I don’t know if you call this a run on the COMEX, but we’ve seen a rather sharp drop at that same point from October. Here we were at 531 million ounces, now down to 345 million ounces.

And what we can say, while it may not be a run on the COMEX, you can see the sharpness of that angle. This is the most rapidly we’ve seen such a large chunk of metal come out. Well, maybe if actually I correct myself, maybe what we saw here in 1995 and 1998 are close. Either case, you can see the metals coming out here quickly and especially in the situation we have where the Chinese market, let’s take a look at their inventory because you want to be really stunned. Here you go. There’s where they were at 7,500 tons back in 2021.

And you’ve seen that same decrease. Here they were back towards the end of 2025 at 2,500 tons. And right now they are down to 627 tons right there. And here you go. This is interesting because we’ve been tracking the actual number of millions of ounces because I think sometimes it gets confusing when things are in million ounces or in tons. This was 36 million ounces about a month or so ago. And I had commented several times that, gee, that seems a bit low. 36 million ounces underpinning the Chinese inventories when we saw that incident in the LBMA occur when their free float got down to 141 million ounces.

And last month I was thinking, gee, 36 million ounces where the heart of industry is. That seems a little low. And then that was down to 27 and then 24 and now it has dropped again to 20 million ounces in China, which probably has a lot to do with the Shanghai premium where we are currently at 9893 versus 8556 on the COMEX. Even on the MCX in India, you can see they’re up at 8999 versus the 8556 in the COMEX, which I continue to maintain is evidence of tightness in supply. And by the way, I know there is the question of the VAT.

And a lot of people have been saying, well, this spread, the reason a price is higher is just because that’s the VAT and shipping cost. I’m checked with multiple sources on this one. I say I’m 99% sure I’m correct. If anyone can point to anything conclusive that shows otherwise, please leave it in the comments below. Yet, as I continue to understand it and have seen documentation of the VAT is for metal that depending on where it goes after it is removed from the Chinese inventories, that is when it’s applied. So that spread is not just because of the VAT.

And perhaps one of the ways that I’ve checked that to make sure that we have the correct understanding is that here on gold charts or us, you can see the Shanghai gold exchange silver premiums. Here is Shanghai gold exchange silver price minus the New York silver price. And you can see how it spiked up right at the end of 2025 going into 2026. And I’ll zoom in on that for you. And here you can see spikes up right at the end of December, which actually would fit because, as I’ve mentioned several times before, I still remember how the silver price was soaring throughout Christmas dinner.

And then we wake up the next morning. Vince Lance had done a morning show about how silver was 75 in New York, but the premium had jumped to 82 in Shanghai. So that VAT existed before that. But here you can see it jumped right when we started reporting that it had jumped. And then certainly it has stayed elevated, got higher. That was when the price really spiked, then came back in and now they have yesterday’s silver price. But you can see $13 premium that gold charts or us has for the New York Shanghai spread. And here we have $98.88 in Shanghai and $85.56 in New York for a $13 spread.

So it would maintain my belief that this specific change, however you want to account for it, that is showing evidence of tightness in the market. And you also don’t have to take my word for it. But here back on February 10th was Bloomberg reporting China’s big silver squeeze persists, even as prices steady. Although don’t worry, because as I mentioned right as we were getting started, just in case you needed any more confirmation of just how serious the governments are taking these strategic mineral situations. In case you missed it yesterday, I mentioned how after the U.S. struck a deal for a portion of Venezuela’s gold following their incursion to remove Nicolas Maduro allegedly for drugs, that they were also doing mining reforms with the representatives that the U.S.

has supported to take over after Maduro has been gone, especially in the oil, gas and mining industries. As the Trump administration tries to exert more control, although despite their public support behind the scenes, they’re threatening a case against Delci Rodriguez, who the U.S. has supported that could include corruption and money laundering. Yet despite that, the mining law, which is expected to include provisions that would allow foreign companies to exploit gold, diamonds and rare earths, article also mentioned silver as well, sure raises some questions. That mining reform did make it a step further. And then here was a real stunner because Pentagon sought fresh supply of 13 critical minerals days before the Iran attack.

Now, if you’ve been watching the channel for a while, you’ve heard us talk before about how the military in an increasingly precarious position in terms of some of the resources they need, which has been evidenced by everything you’ve seen around the strategic minerals. And the U.S. military asked mining companies last Friday to help boost domestic supplies of 13 critical minerals used to make semiconductors, weapons and other products, which was found in a document reviewed by Reuters. And the request came the day before the U.S. and Israel launched strikes on Iran and is the latest example of Washington’s push for more access to the materials used widely in warfare.

And we can see here the Pentagon asked members of the Defense Industrial Base Consortium, a group of more than 1,500 companies, universities and others that supply the military with proposals to submit by March 20th projects that could mine, process or recycle select minerals. So at least as being suggested here, they’re going to war and they’re asking mining companies to fast track some production. While the D.I.B.C. has worked on mineral-related issues for some time, there was no immediate indication as to whether the timing was intentionally coordinated to go inside with the start of the strikes on Iran.

So again, a little bit unclear how connected these are, although Pentagon did ask for detailed information on the cost and could be awarding development funds ranging from 100 million to over 500 million. And as I mentioned, back in that article on Venezuela, they did mention silver as one of the reserves that a report from the Venezuela government had referenced regarding having mineral deposits. So it’s quite an adventure out there to the degree that foreign traders are even using the Canadian dollar for the hedge in the wake of the U.S.-Iran conflict, which according to Joe Rogan has left even Trump supporters not feeling so good about what they’re seeing.

But it just seems so insane based on what he ran on. I mean, this is why a lot of people feel betrayed, right? He ran on no more wars and these stupid senseless wars, and then we have one that we can’t even really clearly define why we did it. Well, but he said he’s against endless wars. Well, they’re all endless wars. Do you ever hear Rumsfeld talk about Iraq when it first happened? Tell me. They were talking about, like, six weeks. Six weeks. Oh, yeah. Six weeks. Yeah, but they put that was ground force, and I know that they’ve not ruled that out.

For me, that would be. They have? They have not. Oh, I’m sorry. So anyway, a lot going on. If you wanted to read that article about why we haven’t seen more of a reaction in the gold and silver markets, that is up on the sub stack. I will dig into it more tomorrow. So again, hit the subscribe button and the notification bell. And especially for those of you who are into your mining stocks, just wanted to thank Dolly Varden Silver, who kindly brought us today’s show and also has been aggressively getting more silver ounces under their control.

In addition to the deal, they just did with Contango ORE, which will give them additional capital and funding through Contango’s producing mine. And to hear a little bit more about that. Well, here is Sean Kunken and Rick Van Neuenheis. It was very much like the Moncho project, a million ounces. And we see the ability to execute this direct shipping or model for Johnson Track. And that’s where the real synergies with Dolly Varden come in because Johnson Track, it’s a high grade deposit. It’s over nine grams per ton, gold equivalent. It is gold, silver, copper, lead and zinc.

So we can put those two projects together. And as Sean referred to, I heard him say earlier, we’ve gone from a five-year plan to a 20-year plan. And that’s fundamentally what the merger does. And it does it with $100 million. When the merger happens, we’ll have about $100 million in the bank. We’ll be generating $100 million of free cash flow on average from Moncho. And then that’s plenty of money to continue to advance all three of our other projects. And I think I heard Sean referred to them as districts, and that’s what they are. Well, thank you, Sean and Rick.

Really exciting to see what’s happening, especially at this time where even with today’s sell-off, we see a very high silver price. So I hope you enjoyed the show. And in case you missed it yesterday, I think you’d want to see what is going on with Venezuela, their gold, and their mining sector. And that one is coming your way now. [tr:trw].

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