$13 silver might be possible
- Thread starter leon1998
- Start date
Pirocco
Well-Known Member
Tomorrow COT report of futures market indicating how the forward component in the spot price has changed since the $15 > $14.5. If the total net position dropped from last reports 22K to 15K then basically nothing changed on the silver market.
I've seen the pattern alot times since 2011's disappearence of ETF price influence
Every 3-4 months a price cycle, due to futures market hedging.
Likely story underneath it: dealers want to replenish stock cheap and sell stock expensive.
So what do they do:
- they replenish their stock
- they buy futures ("paper") silver, driving the price afterward up
- they sell the stock at that higher driven price, and decrease their papersilver hold / hedge with it.
- until next replenishment needed
- then they wait for demand to dry up, to then dump the remainder of the papersilver.
- the forward component in the spot price drops to a minimum.
- they order a next stock replenishment.
repeat.
- and then the topics about $17 $20 are brought back up.
Haha.
I've seen the pattern alot times since 2011's disappearence of ETF price influence
Every 3-4 months a price cycle, due to futures market hedging.
Likely story underneath it: dealers want to replenish stock cheap and sell stock expensive.
So what do they do:
- they replenish their stock
- they buy futures ("paper") silver, driving the price afterward up
- they sell the stock at that higher driven price, and decrease their papersilver hold / hedge with it.
- until next replenishment needed
- then they wait for demand to dry up, to then dump the remainder of the papersilver.
- the forward component in the spot price drops to a minimum.
- they order a next stock replenishment.
repeat.
- and then the topics about $17 $20 are brought back up.
Haha.
Pirocco
Well-Known Member
14/08/2018 12376 $15.0350
Producer/Merchant/Processor/User Long 21250 Short 48121
SwapDealer Long 54283 Short 39788
ManagedMoney Long 66537 Short 88828
OtherReportables Long 26809 Short 7354
SmallTraders Long 33523 Short 18311
Total net position dropped to 12376 and price then was just above $15.
Likely it has been lower yesterday / is lower today.
Also likely is that dealers quickly replenish stock directly after mowing price down (well, just their previous bang up totally undone), after which they retake the hedge.
So basically, nothing changed.
I should have waited a week more, on the 30 kg I would have paid 470 euro less, that's a week work for nothing.
But ohwell, own fault.Didn't hit the bottom, still the purchase price was among the best in years.
Producer/Merchant/Processor/User Long 21250 Short 48121
SwapDealer Long 54283 Short 39788
ManagedMoney Long 66537 Short 88828
OtherReportables Long 26809 Short 7354
SmallTraders Long 33523 Short 18311
Total net position dropped to 12376 and price then was just above $15.
Likely it has been lower yesterday / is lower today.
Also likely is that dealers quickly replenish stock directly after mowing price down (well, just their previous bang up totally undone), after which they retake the hedge.
So basically, nothing changed.
I should have waited a week more, on the 30 kg I would have paid 470 euro less, that's a week work for nothing.
But ohwell, own fault.Didn't hit the bottom, still the purchase price was among the best in years.
Gullintanni
Well-Known Member
The mine up the road here in Otago (Macraes_oceanagold) had their numbers out for the year recently and they are pulling gold out of the ground at $600 an oz.I've to agree, the market is now crazy. Jim Rogers was talking about gold falling below $1000. If gold falls below $1000, silver will be below $10. Totally doesn't make sense because gold below $1000, all miners (gold, silver, copper) will be losing money, but then it could still happen!
Rest assured that a few billionaires are watching at silver like a hawk, waiting to pull the trigger. Warren Buffett is definitely watching. Imagine Warren Buffett putting tell his subordinates to buy all the silver bullion on jmbullion, apmex, abcbullion, provident, kitco, all the major bullion dealers all at the same time, I don't know how much it will cost him, probably $200-$300 million? The whole market will panic, physical silver will just disappear from the market.
This is how I imagine it would happen? Correct me if I'm wrong.
I would suggest if they can do that here in NZ then other nations with not as many overheads like living wages and all that BS will be pulling it out of the ground for substantially LESS.
Still plenty of meat on the bone even at $1000 OZ gold.
Ill find their report and add it to this thread.
Gullintanni
Well-Known Member
Can you post just 2 major or moderate producers that are mining BELOW COST OF PRODUCTION PLEASE?
Thanks
Gullintanni
Well-Known Member
Thanks Pirocco.
Sadly enough it was some of the pumpers using non facts like "below production costs" that really peaked my interest in silver and gold.
Even doing due diligence it still takes (or for me at least) a good few months to untangle fact from fiction and that is enough time to put up some good money before you get wise.
There is money in silver and gold at any stage of pricing but it requires way way more work than the pumpers have you believe.
As negative as many of us sound on silver and gold i personally still see it as real money.
I can’t bring myself to hold Gold for that very reason.
It depends on how you define production costs. If production costs is only operating costs of digging out silver from an already operational mine then I’m sure 100% of miners are profitable.
But from the research I’ve done, the amount of silver that can be dug out of an existing mine falls 10-15% every year so they’ll run out of commercially viable silver in less than 8 years with existing mines.
Supply is doomed to fall at the current price, the only unknown now is long term demand. If demand falls more than supply, then price will still fall.
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Number 47
Well-Known Member
Most of the world's silver is a byproduct of mining other metals. The price of silver could fall to lows never seen before and more than enough will still be produced to meet demand.
Pirocco
Well-Known Member
All mining has byproducts since no miner throws the other valuable elements in the ore back in the pit.
It's always the same story repeating, at what turns out to have been the highest price peak, the talk is about further rising to highs never seen before, and at what turns out to have been the lowest price bottom, the talk is about lows never seen before.
And I've seen a number of those folks swapping forth and back between both claims.
Gullintanni referred to "pumpers", but a more complete (
) wording is "pump & dumpers".The club that sells high > buys back in low upon every 3-4 months cycle.
And as said, all that production (mining & recycling) shows no correlation with the silver price trend.
$4 to $35 = 9 folding.
Mine Production, year and Moz
1990 521.8
1991 510.9
1992 485.3
1993 469.5
1994 451.0
1995 479.0
1996 492.9
1997 520.4
1998 542.7
1999 557.5
2000 591.5
2001 606.8
2002 594.5
2003 597.2
2004 613.6
2005 639.9
2006 643.4
2007 667.7
2008 684.7
2009 717.3
2010 753.0
2011 758.3
2012 791.7
2013 867.8
2014 895.1
2015 895.1
2016 888.6
2017 852.1
Even with a magnifying glass, the "best" correlation one can discover, is INVERSE: price rises while mine production rises.
Apparently, production failed to meet demand. That's why the price at a moment (2011) 9-folded.
Even the futures markets trading (that became the biggest price driver in recent years) was peanut in 2011, in the months before the rise to $50 peak, their total net position dropped big.
What DID the silver price drive then?
Well haha, speculators, silver stackers.
And they will drive it in the future too.
So all this talk about mine production, Please Gimme A Break !
There fixed it for you.
SilverDJ
Well-Known Member
Not saying that silver can't fall further - we've seen oil fell to way below production cost for the majority of producers a couple years back. But I've not seen any reports that shows that silver production, be it from primary silver mines or as a byproduct, is still rising at today's price.
All indications are that total silver production has peaked in 2016-2017. Of course, production is only part of the equation, there is also demand which is dropping.
Sell or hold?
Sell and buy bitcoin or stocks.