➡ China’s only silver futures fund saw a significant drop of 31.5% due to a sudden change in valuation methods, leading to trading stops and over 17,000 complaints. To regain investor trust, the fund manager has announced a compensation plan. In other news, a new form of gold standard may be emerging, not requiring a central bank but instead using digital gold like Pax Gold and Tether Gold. This could allow individuals to link their finances to gold without waiting for government policy.

China’s sole silver futures, listed open-ended fund, dropped 31.5% after a sudden valuation methodology change tied to extreme global volatility. The adjustment pushed net asset values far beyond Shanghai’s 17% daily limit lower, triggering trading halts and more than 17,000 complaints. Welcome to the Morning Markets and Metals with Vince Lancy. Where each morning Vince brings you the financial and precious metals news to get you ready for your day. And now, here’s Vince. Good morning, everyone. I’m Vince Lancy, this is the Golf Fix Market Rundown. It’s Monday, President’s Day. China’s only silver futures fund plunged over 30% last week, and then they unveiled a compensation plan after thousands of investor complaints and trading halts rattled their confidence.

Now, we’ve covered this fund before. We’re going to give you an update on it, and then we’ll drill down even more into it later on what happened. Also, a gold standard may be returning, but this time it does not require a central bank. Dramatic statement aside, you just need a wallet. We think something’s going to be happening very, very relatively soon in gold. There’s the home page right there, and here’s the markets. 10-year yields. Well, it’s President’s Day, so 10 yields are unchanged. The markets close. The dollar is $9,702, up 14.

The S&P 500 is up 31. The NASDAQ is up 25. The VIX is closed. Gold is down $43. Volatile all night, mostly down most of the night, trading $49.98. Silver, $76.87, down 45 cents. A really wild ride last night. Opened up higher by $0.70 and went down as low as $0.7490, give or take, now trading $0.7690. So a wild range for Asia, and you can tell that somebody’s pushing on it to buy, at least I can tell, at least I think. Anyway, copper is unchanged bid. WTI is up $0.10. Natural gas is down 35 cents.

That’s 9.5%. $3.33. That’s the warm weather coming, and so the speculators get out of natural gas. Platinum down 24. Palladium up 5. Gold silver, unchanged-ish. And Bitcoin is nowhere. And let’s scroll up to see grains. Grains are mixed. Wheat is down. Corn is unchanged. Basically, grains are down. Grains are soft. Grains are softer. Okay. First story. China’s sole silver futures, listed open-ended fund, dropped 31.5% after a sudden valuation methodology change tied to extreme global volatility. The adjustment pushed net asset values far beyond Shanghai’s 17% daily limit lower, triggering trading halts and more than 17,000 complaints.

The fund manager has now announced a compensation plan fully covering small losses and partially reimbursing larger ones in an effort to restore investor trust amid allegations of unfair advantage and short selling ahead of the reevaluation. Quick comment. See where it says a sudden valuation methodology change. That’s when they halted the fund amidst the sell-off, because the Shanghai futures sold off more than 17%, but you couldn’t trade it down more than 17%. It was only down 17% and stopped. Global silver was down 25%, 28%, 30% at one point. And so the stock fund only reflected down 17% and people couldn’t get out.

So the whole thing was rigged, in my opinion. The whole thing was the fund has too many longs. Let’s change how the fund values things. And when we do that, let’s create an opportunity for anyone to short silver as much as they want. I’m not saying manipulation. I’m saying asymmetric information about this fund having trouble was disseminated, and that was why the market was piled on. What they’re doing here is when you step back and look at it in a geopolitical point of view, we’re showing that the SHFE, Shanghai Futures Exchange, we meeting the West, is showing that the SHFE is not ready to go global yet, because they have a 17% limit, whereas we have no limits.

This is geopolitics. This is war. Next story. We sent this out yesterday. An individual gold standard is coming. That’s our opinion. A new academic paper argues that tokenized gold, such as Pax Gold and Tether Gold, meets the functional conditions of a modern opt-in gold standard backed by physical bullion, tightly tracking spot prices, and now integrated. This is what the paper found, that I’m not agreeing with it necessarily. Integrated into lending and settlement infrastructure, digital gold allows individuals to anchor their balance sheets to bullion without waiting for sovereign policy. The infrastructure exists.

Adoption will determine scale. Historically, new gold vehicles have preceded larger bull markets. That’s my opinion. The infrastructure exists. Adoption will determine scale, and historically, new gold vehicles precede larger bull markets. Now, comments on this piece, aside from the ones that agree with it, the ones that have a problem with it have a problem with Tether. Tether’s not real. Tether doesn’t have the assets. I don’t care. I don’t care. I don’t care. The gold is being accumulated, and it can’t be rehypothecated. It will be rehypothecated. Don’t get me wrong. Not yet, though. Not yet.

And as they’re accumulating it, people are holding onto their collateral. And so here’s a message I have to that effect. I am here to tell you this is happening. There is nothing left for governments to agree on except gold for world trade. And therefore, either they get their people on a gold standard, even though they don’t call it that, or there will be world war. That’s where we stand. Gold is the only thing keeping trust together. It’s becoming extremely obvious to me that there is a plan called, we call it ACD, ACD, A for accumulate the gold, C for collateralize the gold, something that Eric and I talk about all the time, and D, deploy the gold, distribute the gold, and in there you’re going to revalue it as well.

That’s where we stand. We’re going to go more all in now. And on that note, coming out this morning, Tether now holds 125 tons of gold. That’s actually low. It’s 148 tons ranking alongside mid-tier central banks and rivaling major ETFs in quarterly flows. This is a trading article. This signals a structural shift. Gold is gaining digital payment rails. Stage one is ownership. Stage two is monetization. As gold becomes collateral, early holders benefit from expanded financial relevance. What does it mean? Don’t sell your gold. That’s what it means. That’ll be out earlier this morning or later this morning, I should say.

There’s the chat. We have a new chat. Hopefully it’s a little bit cleaned up. It’s less noisy. And here’s the data on deck. Busy week, GDP, PCE, and Fed minutes are all out today. Nothing is scheduled. It is President’s Day, but you can look for Thursday and Friday to be very busy days. And we have the Fed minutes on Wednesday. Let’s look at the chart for a second here. Okay, so we start with that fund. The SDIC, LOF does not mean long, lonely fund. I’ve heard me say that before. That’s wrong. It’s listed open end fund.

It’s not a closed end fund, but it’s moving towards closed end behavior. So here you have the fund. It’s on the highs and on the highs, hear me out. On the highs, the fund, the people running the fund, UBS, decides to change how they value it. And so that causes silver to drop. Silver didn’t drop causing that to freeze up. That froze up on the revaluation news, causing silver to drop. Silver drops 17% in Shanghai. They can only buy Shanghai futures. So they’re limited to a local future. Meanwhile, on the COMEX, it was down 20, down 25, down 30%.

Interesting, right? How it kept going down, but you can’t get out of your shares. So you can’t see it because it’s, um, it’s, uh, yeah, I’ll make it a little bit bigger. There’s the first day they settled it, but it was trading below that. There’s a second day didn’t trade. Third day didn’t trade. Fourth day didn’t trade. Fifth day didn’t trade. Sixth day traded. They got their balance. What was that balance? That balance was everyone who wanted to sell silver sold it and everyone who wanted to buy it back, brought it back.

And all these people could not get out of their positions because it was closed. Meanwhile, futures were selling off. So let’s say you’re a big hedge fund. I mean, you wouldn’t do this, but let’s say you’re a big hedge fund and you were along this fund, this LOF fund, and you couldn’t get out because the phone was closed. What would you do? You’d sell futures. So people that were sophisticated were selling futures, but futures were down 17% and they couldn’t sell it anymore. COMEX was down 20, 25, 30%. So whether intentional or not, wink, the Western hemisphere spoofed silver lower to get the buyers to stop buying over in China.

That’s where I stand on it. It’s pretty brilliant. When you know that there’s going to be a rule change coming and that information changes asymmetrically, well, that’s how you do stuff. I’ve seen it before. All right. Let’s go to let’s take a look at the charts. There’s gold. Let me just zoom in a little bit, a little bit less. Yeah. So I mean, look at these ranges, right? It’s insane. Again, I believe higher, higher lows and lower highs, generally speaking. I believe that we’re in a range and we’re consolidating and we’re working off a lot of froth.

And so my position reflects that, but it’s in silver. So you could look at this as a big potential. Remember, you may or may not remember I said we cleared the bear flag, but something worse could happen. It would be like a big whoosh lower, but we got a little whoosh lower, a little whoosh, 150, $200 move lower. And now we’re back up in the range. So now it looks like we’re in this wedge. If you’re trading gold, you’re trading wedges. You’re in this wedge, right? And you could draw a line here and say, it’s going to respect that line.

Or you could do like I do. And I say, this is a new ledge. Somebody bought it here. And I know that people like tether and they’re buying. So now I’m looking at it like this line is important, but this line is more important going forward. So if we crack this line going forward, then this becomes kind of like a bounce rounding top structure. I like the market going sideways for some time. Chop city is what I say. Silver, a little bit more nervous because that’s where my risk is. And there’s my line.

Below 71, I get very nervous. I believe a similar ledge is being formed in silver at a lower level, because let’s face it, you did kill some of the Chinese demand on that long only fund it cracked out. Gold rallied like this. Silver rallied like that. So we’re basing at a lower level. It looks like we may have found the home. Maybe the gold silver ratio needs to be in. Where is that? The 62 to 68 range. Now, maybe that’s right. I believe that there’s buying at 75 give or take. And I believe that buying will continue all the way down to 70 below 70.

Then I get nervous again. That’s where I am. That’s, that’s a hell of a big range to say, Oh, I’m okay with that. Well, my position is structured accordingly to that. I don’t think the market is something I want to be long right now. I don’t want to be shorted either. I just want to be, I want to watch it go like this and not have stress. So my position is accordingly like that. I have a, I have a skewed condor. Maybe it shouldn’t be skewed, but I have a condor. Let’s check in on oil.

You know, I was in love with oil for the last couple of weeks. So here’s your breakout. Here’s your breakup, right? See that level there? 65 93. That’s, that’s, I put it up over here. So it has to get above that area for me to say we’re off to the races again. You’ll see it on a weekly, a little bit easier, right? It has to get above this level here for me to cross the worst line. I’m Vince. See you tomorrow. Well, thanks for watching this morning’s markets and metals with Vince. Lancy, we sure appreciate you tuning in and starting your day with us here.

Hope you enjoyed the show and we’ll see you again tomorrow. Please note that this video is not intended as legal license, financial trading advice, and is to be used for informational purposes only. Please contact your financial advisor before making any decisions and thanks for watching. [tr:trw].

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