Introducing the New Synthetic Silver Price Index
Learn how the proprietary Synthetic Silver Price Index (SSPI) can help you confirm and even predict silver’s price movements.
In this update, I am introducing the newly reformulated Synthetic Silver Price Index (SSPI), a proprietary indicator I developed to help confirm whether moves in silver are genuine or simply noise, and to anticipate potential price moves in advance. This indicator has proven highly accurate and has earned the respect and fascination of my subscribers as well as myself.
To better understand the philosophy behind the SSPI, I recommend reading the in-depth guide I published a few months ago. Unfortunately, recent tariff-driven distortions in U.S.-traded COMEX copper and gold futures, the two components of the SSPI, forced me to revise the formula. The good news is that the updated version performs just as well as the original. In today’s update, I will walk you through the new formula, show how to use it to validate silver’s moves, and explain what it is signaling about silver right now.
As I have been explaining in my updates over the past year and in the guide I published, I discovered that silver’s price moves are essentially a hybrid of gold’s and copper’s moves. This is because silver is both a precious metal and an industrial metal (as shown in the chart below), and apparently, arbitrage trading algorithms take cues from both gold and copper to pull silver along with them.
When gold and copper are rising, chances are silver will rise as well, and vice versa. Furthermore, if silver is making a move that is not confirmed by gold and copper, chances are it is a false move in silver that will then reverse, often violently. Very often, these false moves are deliberately engineered by the bullion banks to manipulate and suppress the price of silver, as I explained in this report.
So I created the original Synthetic Silver Price Index by averaging the prices of gold and copper, adjusting copper by a factor of 540 to prevent gold’s much higher price from exerting undue influence. The original SSPI used U.S.-traded COMEX copper and gold futures, and it can be tracked on TradingView and other platforms using the formula: (540*HG1! + XAUUSD)/2. Lo and behold, I discovered that even though silver itself is not included in the formula, the SSPI is highly correlated with silver’s price—showing an impressive five-year correlation of 84%.
Now let’s discuss why I had to modify the formula (and I’ll share the new one shortly, but first I want to explain the reason). In July, COMEX copper futures went on a head-spinning round trip. They first surged 13% on initial news that U.S. copper imports would be tariffed, then plunged 20% when it was revealed that the tariffs would not apply to copper cathodes, which are what COMEX copper futures are based on. You can see that dizzying move in the chart below.
In recent weeks, a similar but less extreme spike and drop occurred in COMEX gold futures (learn more). This was driven by initial speculation that the Trump administration would impose tariffs on gold bullion imports, but that was later denied:
What’s important to note is that the tariff-related distortions affected only U.S.-traded COMEX gold and copper futures, not global spot prices or futures contracts traded outside the United States. However, because my original Synthetic Silver Price Index formula relied on COMEX gold and copper futures, it became distorted as well, as shown in the chart below, and was no longer as effective for confirming or predicting price moves in silver.
Thankfully, those tariff-related distortions were confined to U.S.-traded futures, while global gold and copper prices remained largely unaffected. This is clearly illustrated in the chart of London Metal Exchange (LME) copper futures below: