Today's Gold & Silver Price Action – What Are the Implied Gold & Silver EFPs and CME Gold Warehouse Stocks Telling Us?

Gold briefly broke above its 100-day moving average of $4,389, but was unable to hold that level as a stronger U.S. dollar weighed on prices later in the session. Both gold and silver finished well off their intraday highs. At the same time, implied Gold and Silver EFPs remain elevated, while London OTC forward rates also continue to trade at relatively high levels.

The September Silver EFP declined by approximately 2.5 cents as silver finished slightly lower on the day. It closed in the broker market at 16.5 cents and was implied between 16–17 cents on WatchGold. At 16.5 cents, the implied annualized yield is approximately 4.84%, compared with the 1-month London OTC forward rate of roughly 3.8%—still a meaningful premium. With LBMA London silver inventories standing at approximately 907 million ounces at the end of July, silver lease rates remaining negative, and OTC forward rates indicating ample liquidity, the market will likely need stronger physical demand and renewed ETF inflows to provide additional price support. Gold lease rates also remain negative, suggesting stronger investment demand would be constructive there as well. Meanwhile, crude oil has retreated from its recent highs as headlines continue to point toward the possibility of a diplomatic solution regarding the Strait of Hormuz. One development that caught my attention was the activity in CME gold warehouse stocks. Despite the December Gold EFP continuing to trade at a healthy premium to London OTC, which would normally encourage banks to ship gold into the U.S., the past two days have seen more than 200,000 ounces withdrawn from CME warehouses. If those withdrawals reflect stronger physical demand elsewhere rather than routine logistics, it could prove to be a constructive signal for the broader gold market. This is certainly something worth monitoring closely.

All eyes now turn to tomorrow's U.S. CPI report at 8:30 a.m. ET. A softer-than-expected inflation reading would likely reduce pressure on the FOMC to raise interest rates, which would generally be supportive for gold and silver. While markets remain highly sensitive to both economic data and geopolitical headlines, it does feel as though the precious metals market is attempting to break out to the upside. Tomorrow's CPI report could be an important catalyst, so let's see what the data brings.

This commentary is provided for educational purposes only and should not be considered investment advice. #Gold #Silver #PreciousMetals #CPI #FOMC #USD #EFP #OTC #LBMA #COMEX #GoldMarket #SilverMarket