Posted on 03/09/2011 11:41:32 PM PST by Jet Jaguar
Silver reached a new 31-year high of $36.76 an ounce on Monday, extending its explosive run of price appreciation. Since last August, white bullion has gained over 94 per cent. Growing inflation concerns coupled with intense physical demand will likely lead to even higher prices; but increasing bank short positions in the metal mean that investors should watch for price volatility.
Last week brought news that the US Mint had again suspended production of its Silver Eagle coins, citing “unprecedented demand” as the reason. In February King World News quoted Dave Madge of Canada’s Royal Mint, who noted that “sourcing silver is becoming very difficult.
Furthermore, yesterday the US Mint issued a press release “requesting public comment from all interested persons on factors to be considered in conducting research for alternative metallic coinage materials for the production of all circulating coins.” This is a concerning development for all those interested in long-term purchases of Silver Eagles, and points again to the significant supply problems that government mints are facing.
Despite this demand and persisting backwardation in the futures market, investors should, however, be alert for bearish developments. As reported by Ted Butler on March 5, the latest silver Commitments of Trader report (COT) shows four big banks increasing their net short-silver positions by 3,000 contracts (or 15 million ounces). As Butler points out, this is a notable shift from the trend of the previous three months, which has seen banks reducing their short exposure to the white metal.
As pointed out last week by Nico Pantelis, despite these reductions in short positions over the last few months, silver remains the most advanced sold commodity in the entire commodity complex. But since last August a short-squeeze has occurred, whereby physical demand has overwhelmed short traders, who have been forced to “cover” or buy back the metal at gradually appreciating prices in order save themselves from potentially even greater losses.
However, if bank short-sellers are once again looking to assert themselves, investors should be alert to the possibility of a price correction.
Reads like short sellers are trying to scare individual buyers away from silver ,in order to reduce their losses?
Physical is the only way to go.
I have several lbs of real old german silverware my wifes mother gave us several years ago,we never would sell it.Im sure it was hoarded from the last depression.
Like - Dude!
If you got enough silver in your pockets, there’s like no way your shorts are gonna rise.
(Advice courtesy of the Jeff Spicoli School of Economics.)
Congratulations 2 All The Silver Bugs!!! <- YouTube video
buy low sell high.. ;)
Hahahaha
just another indicator that 0failure has cut the value of the US dollar in half since taking office.
thanks, loser
Yep
j/k...sorta...
I have several lbs of real old german silverware..."
Unclear: "German-Silver" was a Depression-era term for nickel. (Similar to today's ubiquitous "stainless steel" silverware.)
“White” metals?
Be on the look out for aluminum and tin quarters.
I just dumped some ‘64 quarters, dimes and halves this past weekend. 25x face value!. Gonna dump more every week until the bubble busts.
While *German Silver* is nickle, there are also Sterling Silver flatware sets from Germany, circa 1890s,that weigh about 16 lbs/service for 12. You could use the forks for garden tools.
The ST or 925 marks will be on anything that is sterling.
Everyone should be careful, though. We went through the biggest melt to that date of historically valuable silverware in the 80s. It is happening again and when it is over and done with, the art and antique pieces will be worth even more. Some 3-piece chocolate and coffee sets have doubled in value in the past 30 years and that was before the extreme silver rise. Search the maker marks.
Ask why, if silver is so valuable, are people selling 90% silver coins for so-called worthless fiat paper? $5 worth of mercury dimes for $140? Does everyone trust that silver will remain high while the dollar will be allowed to crash to nothing?
Also, check around for the premiums being charged on silver ingots and coins. They can vary from $1/oz up to $10/oz. Fine silver in manufactured form for jewelry-making can be as much as a 65% premium, because of the labor and electricity needed to fabricate the sheet or wire.
IMO, this is an unstable market. I have no idea what is going to happen to assets, but this is a panic and people should be cautious.
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