Gold, silver signal tilt to a new monetary system

Key Points

• Gold and silver fell sharply on Monday, December 29, in thin holiday trading.
• The CME increased margin requirements for gold and silver in a vain attempt to curb the strong bull market.
• Gold and silver rallied on Monday, January 5.
• Bitcoin also rallied, signaling improved liquidity in financial markets.
• The long-term bull market in gold and silver indicates the shift to a new global monetary order.

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Gold found support at $4,300 per ounce after the CME raised margin requirements for precious metals on December 29 to take some heat out of the strong bull market. The effect was short-lived, with gold rallying off support on Monday, January 5, to again test resistance at $4,500. Recovery above $4,500 would offer a short-term target of $4,700 and a medium-term target of $5,000.

Silver similarly retreated from its high at $86.63 per ounce, finding support at $70. Support at $70 held, and the precious metal is again rallying to test resistance at $80. A breakout above $80 would signal a new advance, with a short-term target of $90 and a medium-term target of $100.

Bullion Shortages

CME attempts to crash the gold and silver markets are a sign of growing physical shortages at the COMEX futures exchange. The $25,000 margin hike for each silver contract, during thin holiday trading, was deliberately timed to maximize its effect on traders with leveraged positions.

Why would CME deliberately crash precious metals markets? Self-preservation. As in a bank run, when bank vaults are depleted, panic ensues. A collapse in inventories would send prices soaring, but ultimately would destroy exchange credibility.

Bullion dealers have warned for months that buyers are increasingly standing for delivery, which is depleting physical inventories of gold and silver at metals exchanges. Earlier in 2025, the London Bullion Market required up to six weeks to effect bullion deliveries, attributing the delay to “labor shortages.”

The CME had an “outage” on November 28, the day silver broke to a new high above $55 per ounce. The outage acted as a circuit breaker, limiting dealers’ ability to trade in a fast-moving market.

The US and China have declared silver a critical metal and are likely to increase stockpiles. China, a major global silver producer, has also instituted export controls effective January 1 that are likely to exacerbate silver shortages.

The strain on bullion markets is increasing, with JPMorgan, one of the largest global bullion traders, relocating its entire precious metals trading desk to Singapore, according to unconfirmed reports. JPM has neither confirmed nor denied the rumors, after an email apparently circulated to all JPM trading staff instructing them to move with their families to Singapore. Singapore is growing as a financial hub and will likely have better access to precious metals from China.

Currencies & Liquidity

The Chinese Yuan has strengthened against the Dollar over the past three months, with declining Trend Index peaks below zero indicating long-term buying pressure (against the Dollar).

Bitcoin broke through the 90,000 resistance level, indicating a fresh injection of liquidity into financial markets.

Declining Trend Index peaks on the Nasdaq QQQ ETF indicate continued selling pressure despite the rise in liquidity.

Conclusion

The CME is resorting to desperate measures to stem physical shortages of gold and silver inventories, a sign that the exchange is losing relevance as buyers increasingly stand for delivery.

The bull market in gold and silver is a sign that central banks are reducing their exposure to fiat currencies such as the Dollar. China is leading the drive towards a new global monetary order, with currencies backed by gold and silver as the global reserve asset, rather than holdings of sovereign debt, which are prone to default or currency debasement (inflation).

A significant advantage of such a system is that it would limit currency manipulation and facilitate fair trade. An attempt to suppress one currency against another, to gain a trade advantage, would cause an outflow of bullion reserves and a currency crisis.

The shift to a new monetary system backed by gold and silver seems inevitable, as does a long-term bull market in gold and silver as demand for the new reserve asset grows.

Acknowledgments

• CoinDesk: Bitcoin
• CNBC: China to restrict silver exports, echoing rare earths playbook
• Daniela Cambone, ITM Trading: Silver Soars 90%, $100 in Play Amid CME Outage, JP Morgan Mystery
• DiscoveryAlert: JP Morgan’s Singapore Trading Desk Relocation – Strategic Market Analysis
• Jennifer Bawden, Seeking Alpha: The Comex Liquidation – Why The CME’s $25K Margin Hike Is A Bailout, Not A Crash – The China Ban Decoupling