Commodities Report: Precious Metals Unwind

Market Flow Analysis $USO $URA $GLD $SLV

Hello Traders,

We’re seeing a massive sell-off in gold and silver as investors scramble for cash to cover their losses elsewhere. History shows that when oil prices spike like this, it almost always leads to stagflation—and eventually, a recession. If you look at the chart, every time oil deviates this far from its normal trend, a recession has followed. It looks like the recession clock is ticking again, and the market is finally starting to price in a hard landing and traders deleverage first in precious metals as it happened in 2007.

Source: Pictet Asset Management, Refinitiv Datastream

Over the last week, our scanner picked up a massive surge in 'crash insurance' (Put GEX) for silver. Traders clearly got spooked between March 11th and 13th as the reality of the global supply shock started to sink in. This unusually high level of put activity shows that while the long-term story for silver is still bullish, the big players were bracing for a messy short-term drop—and as we’ve seen with the recent 10% slide, they were right to be nervous.

USO Gamma Exposure