These are extraordinary times for the precious metals markets. And not just because of the headline price action. Underlying developments in the supply-and-demand fundamentals for physical gold and silver are extraordinary in their own right.

If recent trends could be summed up in one word, it would be bifurcation. On one hand, the paper market (i.e., futures contracts) continues to be heavily pressured in a bearish direction by extraordinary levels of institutional short-selling. On the other, the physical market is heating up with robust investor buying and increasingly bullish long-term supply/demand prospects.