Gold and Silver bear squeeze emerges [Video]

In this week’s Live from the Vault, Andrew Maguire revisits his gold price prediction, now close to materialising as gold hits record highs, with rising physical demand pushing prices higher despite persistent suppression efforts.

With central banks ramping up gold accumulation, short sellers are facing growing pressure, while the Basel III compliance deadline accelerates the shift to physically-backed assets, making price suppression increasingly unsustainable.

The rise of physical Gold demand

Despite repeated attempts to suppress gold prices through synthetic selling, physical demand continues to drive the market. In recent weeks, gold has maintained levels above $2,900 in 25 out of 33 price fixes, highlighting the growing influence of physical buyers over speculative traders. Similarly, silver has faced strong demand, with resistance at $32 proving increasingly difficult to maintain.

Institutional buyers reshaping the market

The market dynamics are shifting, with central banks and institutional investors accelerating their gold acquisitions. February witnessed premiums as high as $38 per ounce for immediate delivery, as buyers rushed to secure physical metal. COMEX open interest has contracted significantly, from 550,000 contracts to 490,000, indicating that bullion banks are not only covering short positions but also accumulating gold to meet growing delivery obligations.

Basel III and the shift to tier one assets

The upcoming Basel III compliance deadline in July is forcing US markets to realign, further disrupting traditional price suppression mechanisms. Gold’s classification as a Tier 1 asset is reinforcing the transition towards long-term, physically backed holdings, reducing speculative volatility and enhancing its role as a safe-haven investment.

China’s Gold buying surge

Recent data does not yet reflect China’s renewed gold-buying activity, which resumed aggressively last Friday. As this demand becomes visible in official reports, it is expected to further fuel gold’s upward momentum, adding pressure on short sellers and reinforcing the long-term bullish outlook.

The global de-dollarisation movement

Gold’s increasing role in global trade is evidenced by reports of Russia supplying gold to China via barter agreements, bypassing traditional financial systems. The growing preference for gold settlements outside the SWIFT network signals a broader shift away from Western-dominated monetary structures.

The future of Gold pricing

As gold futures open interest continues to decline, the ability of market makers to manipulate prices through traditional short-selling tactics is diminishing. The shift towards physical gold accumulation strengthens the long-term outlook for price appreciation, reinforcing gold’s role as a strategic asset in the evolving financial landscape.