China is About to Send Silver Prices Surging

Demand for silver in China is off the charts and yet if you look at the price chart of silver it's not keeping pace and what this demand component is setting up for is a huge surge in prices. So today we're going to look at what's going on in China and why there's such a huge demand for silver. I'm going to show you the technicals we're going to look at the charts and then I'm going to tie it all together what's going on in the macro economy what's happening right there in China and why I think silver prices are headed a lot higher. So if you've been looking for an entry point if you missed out on the rally or maybe you want to add to your lungs well today's show it's all for you. Because China's imports of silver have now surged to an all-time high in March as demand from retail investors and this is huge and the country's massive solar industry pushed purchases well above seasonal averages. So anytime you start to see demand from retail investors jump this is a big indication that prices are about to follow through because there's a reason they're buying there and of course the mainstream media is pushing it's an inflation narrative. I'm going to show you why it's something far worse because the world's biggest silver consumer imported around 836 tons last month. That compares with a 10-year seasonal average for March of about 306 tons and as you can see for 2026 it is completely off the charts. Now many of the experts are saying this demand isn't going to last but when you look at what's happening in China you look at the charts up and everything going on around the world it makes perfect sense why Chinese consumers are buying hand over fist and why I think prices are a whole lot higher because demand was bolstered by retail investors piling into small silver bars and solar manufacturers front-loading production ahead of the removal of the export tax rebates on April 1st. So why would retail investors be buying? Are they worried about inflation? No they're worried about their economy because we've been talking about for a while how China's economy continues its downward trend and what's happening right now due to the oil shock is likely to be the tipping point that pushes them into a recession. So why are Chinese consumers buying? Because they're afraid of having another financial crisis one that could topple their banking system. But speaking of the energy crisis you see the demand for solar surging higher demand for silver going right along with it so right now as we look at the setup here you can see there's a strong bullish narrative for silver. Now let's take a look at the price chart because you've got to see what's going on here. Now we're going to look at the SLV ETF and I know many of you trade you know actual physical silver you trade it on the futures market and I like to look at the ETF chart because it's really easy for me and here's the first thing we need to notice see that red line going across your screen there that is what's called a volume profile. So if we're looking at the last six months this is where the most shares have been traded so what this does is it acts as a level support so what we can see is buyers have been stepping in underneath it and they've been holding this price level. Now some other bullish things here you notice this blue line that's your 100-day moving average and the 50-day moving average that's in green so what you're seeing here some key major moving averages are holding support as well. In fact if you look at the volume here you can see it's right on the cusp of a breakout so if you're looking to trade this you want to put you know your stops down here somewhere right around that volume profile line which is but look at the upside if this starts to break up to the upside what happens you next move into this volume right here around $80 again this is the ETF from there the volume starts to decline and now you're setting up for a run right back up near a hundred potentially if demand holds up it could go even higher but again some of the experts are saying look there's no way this can because explosive imports is definitely not going to sustain and future inflows are going to return to normal this is from a shenzhen-based analyst he said there's no long-term demand supply balance for silver given that china's the world's biggest silver producer now i want to know what do you think about that claim do you think that he's right and that well silver is just going to keep around his current value maybe even decline or do you think we're facing the fact that the world's largest exporters head into recession consumers know it and with this energy shock you're going to see an increased demand for solar and along with all that silver what's the call make the note in the comment i want to hear from you because if you're looking on how to trade the market remember back on april 15 we told our cta subscribers to buy silver we put that we noted it on the show but look at this trade back on the 6 we told her all our subscribers to buy iwm that's small caps and since then it has rallied 9.88 as it closes business friday now i'd love for you to join us and start making money trading the markets and all you have to do is grab those links in description below we give you a free 30-day trial for our trading program all you've got to do is sign up and start making money because let's take a look at the macro perspective now commercial traffic through the strait of hormuz is at a virtual standstill on monday after a brief and confused reopening over the weekend ended with the first u.s seizure of an iranian vessel i'm just going just how difficult it will be to restore activity in the vital straight so when you're looking at trading it's not just about charts it's not just about short-term narratives but when you can tie the macro perspective and it starts to make more sense so why does this matter for china well because around 90 percent of iran's energy exports well they go to china of course china's not paying market price they're probably playing below average so that means their cheap energy import source is going away meaning of course all the producers they're going to face higher import prices for energy which means it's going to lead to higher export prices and next thing you know as we already are finding out as prices go up demand is going down so the issue here is what are chinese consumers seeing their economy slowing down they're seeing demand go away and some other evidence this turned to japan now because china's exports of rare earth magnets and materials to japan fell sharply in march as our relations between the asian nations heightened concerns about a potential supply squeeze and volumes of magnets shipped to japan in the month fell 17 percent from february to a nine-month low about 184 tons and this is an issue because volumes of intermediate materials also fell which include oxides dropped by nearly 90 percent so again you start looking around and you see the issue here global demand is falling exports for china going down what does that mean their economy likely to head into recession so you see the consumer reaction here in silver and you can see why in the chart we're standing up for an explosive move higher but on top of that even the government's admitting there's issues with their economy the finance ministry plans to sell 85 billion yuan that's about 12 billion u.s dollars worth of 30-year special bonds in april 24th that's the largest single offering on tenor on record it will also issue 34 billion yuan of 20-year notes according to statements released last week so why does this matter how do how do bonds tie into silver well think about this why would beijing issue a ton of bonds why they need money and they needed to stimulate the economy and keep in mind not long ago remember about a year ago they were telling the banks do not buy these long-term bonds you're going to get slaughtered and yet what are we facing here we're seeing the economy slow down you're seeing consumers demanding silver and what does this mean interest rates in china likely to come down as the economy weakens so when we start tying this all together it's going to come back to the dollar as well well let's take a first look here because the ministry also published an issuance schedule showing it will keep the tenors of such bonds unchanged at 20 30 and 50 year auctions from april to october defying earlier market speculation the shorter maturities could be introduced and again china's kicking the can down the road here they know their economy is weakening and that is again one of the issues we're seeing in the currency markets why the yuan is appreciated again why the dollar is coming down again that's going to be a tailwind for silver but first let me tie this all together because the move in the bond market signals policymakers continued preference for locking in long-term funding for major projects so again they're going out to the debt markets they're borrowing money to stimulate their economy because the reality is it's continuing to weaken and they're helping fund infrastructure and subsidies for consumer goods and business equipment without formally widening fiscal metrics and become a routine off-budget funding tool since 2024 so there's your tie-in on the macros perspective you've got energy costs in china going up because their key export source is gone next thing you know you've also got the issue you're seeing on the bond market and of course on top of that we also see rare earths dropping so all this is validating what's going on but let's take a look at what's going on with the dollar because i think we start to tie the big picture together and today what's happening the dollar dxy has broken down you look over the last few days but it's 200 day moving average that's the line running slowly across your screen in orange and what happened it's not confirming it's trying to get back up there but it's failed what we're seeing here is the dollar continue to weaken and we know as the dollar goes down what does that mean it's a huge tailwind for silver so you can start to see how this is all tying together and yes even the banks know and investors know china's economy is weaking but retail investors they don't buy bonds they're buying silver because investors took the larger 30-year supply in stride with chinese bonds extending a rally meaning price goes up interest rates go down yields on 30-year cash bonds fell one basis points to two and a two and a quarter percent while futures contracts on those notes rose 0.2 percent to the highest in since december so what is the market saying yes we're confirming china's economy is weakening here the structural problems are not turning around china's getting desperate to borrow as much money as they can to fund all kinds of projects and stimulus and yet consumers they've got this thing locked in they see what's happening see demand falling they see the economy weakening they're turning to buy silver and so now let's tie this all back to what we talked about in yesterday's show with machine positioning and why we could see us stocks go up for the same exact reason because remember when the dollar goes down there's something else that goes down it's called the vix but right now we see that systematic strategies have added roughly 135 billion of global equities over the past two weeks assuming no major shift we'll add 50 billion this coming week and that's just from golden sacks alone you tack on bank of america that number goes up even more so what we're seeing here are higher prices are still inducing more buying so right now we have a huge amount of support under the market from these systematic machines so regardless of what the news is saying dips are being bought in every outcome and what we're facing here is risk control players could be coming back to the market in a major way so even if we don't get sizable moves to the upside what happens even if markets are flat week over week what we could see is these risk controls strategies will come back in with around 185 billion over the next month assuming again the s&p average plus or minus around 50 basis point daily moves so again there's a lot more buying from these systematics that can come in and then you factor the dealers being forced to buy and right now according to golden sacks dealers flip meaningful short gamma on a one to three percent move higher which would force them to buy deltas to the upside which means as the market goes up the dealers start to buy and the evidence that that's coming well it's all in the call volume as we look at call versus put volume has surged to the upside now sitting in the 95th percentile since 2010 this from deutsche bank again validating what we see from the dealer's perspective here that as the market goes higher what we're going to face is dealers having to buy the upside so let's take a look at the vix today and see what's going on there bring this all together because yes the vix jumped on the news of course perhaps things with iran the us are going to escalate we don't know what's going to happen over the next couple days but notably even though the vix jumped up here as it failed to hold resistance on its 200 day moving average what do we know that vol sellers are still active here and what's the driving force behind that systematic machines so again as volatility comes down the dollar comes down and what happens for silver price goes up stocks goes up and we've talked about this here in the last week or so that as u.s equity prices go higher well it also means silver likely to chase to the upside so there's your case for why i think china's demand for silver it's going to send the price a whole lot higher and with that i'm steve admeter thanks for watching thanks for being fans bye now