Craig Hemke - Comex vs. Shanghai: What’s Really Driving Silver?
The KE Report Jan 20, 2026
Summary
Silver doubled in roughly 2.5 months - from $50 in late November to $94 on January 20 - while gold pushed past $4,750.
US banks flipped to net long on COMEX silver in November, while hedge-fund longs shrank from 37,000 to 13,000 contracts.
Craig argues Shanghai now sets silver's price: Comex is ratcheting higher to match physical demand, with backwardation (spot above futures) confirming tightness.
Poland's decree to lift gold reserves from 550 to 700 tons follows the post-2022 pattern of central banks shifting out of US Treasuries.
Craig's 2026 outlook expects 100bp of Fed cuts, possible yield curve control, and a gold target of $5,200 then $6,000+.
Craig Hemke's takeaways
- Top takeaway Craig argues the silver rally is structurally unique, not a speculative bubble: COT data shows hedge-fund managed money net long has shrunk to roughly 13,000 contracts from about 37,000 in September–October 2025, while the five U.S. banks on the monthly bank participation report flipped from their historically persistent short stance to net long starting in November — a setup he says he has never seen before.
- He contends Comex silver is now the tail being wagged by Shanghai (physical demand), not the other way around; arbitrage is not closing the gap because Western metal cannot be sourced to deliver East, so the Comex price ratchets higher whenever the Shanghai price pushes up.
- On his 2026 macrocast outlook, Craig expects U.S. policy to run it hot — a Trump-aligned Fed cutting at least 100 bps, possible yield-curve control, and sharply negative real rates — which combined with central-bank gold demand (he cites Poland raising its target from 550 to 700 metric tons) keeps the precious-metals bull trend intact.
- He projects gold follows a recurring 20%-rally-then-2-to-4-month-consolidation pattern: from the ~$4,700 area at the time of recording, the next leg could take it to about $5,200, with a follow-on 20% move potentially reaching $6,000+ later in 2026.
- On silver, Craig had called for a doubling to roughly $96 in his macrocast — which happened by January 20, about two and a half months earlier than he expected — and floats a possible $120 target driven by industrial/tonnage supply issues, while warning a 25% pullback (back to ~$75) is plausible on a tariff headline.