Pirocco, what is your opinion of this news SLV Adds Record 572 Tons Of Silver In One Day, More Than In All Of 2012 I know that you are not a fortune teller, however do you think this means the new shares will be used to push the price down, or it's too soon to tell, etc? Thanks
Any thoughts about the term "Deep Storage" in relation to US Gold reserves? http://www.zerohedge.com/news/2013-...ikely-assuage-public-concerns#comment-3162195 Relevant because a sharp rise in demand for physical gold, due to concerns about less on supply then previously believed, would also see increase demand in Silver and other PMs as a lack of trust (well more thereof for some of us on these PM related forums) in Central Banks increases dramatically.
Lorian is a smart guy. What's he doing around here Someone better smack the hecklers with a big stick. Personally Pirocco, if you didn't like Kco, get out now!!!!!!!!!!!!!!
I don't know what you mean with that 'Deep Storage', the linked article talks about German State owned gold stocks. So what would cause your 'sharp rise in gold demand'?
I don't consider reserves as something to take into account in todays/near futures target price determination. Simply because its impact is massively overruled by the impact of inflation hedging. The supply sides of au/ag changed little relative to 2008. The price doubling and tripling was due to doubling and tripling demand.
Thanks for all the HARD WORK Pirocco. I am sure it will be greatly appreciated here vs some other places.
Hello and thanks too. It wasn't lack of appreciation on that other place, it was due to rules application that I was too stupid to recognize. "If you have to ask others when to spend your money on silver, better stay away from silver at all". Warning! Rules infraction! After a while I had a last 'ohwell'. And I showed my tail light. About my current silver attitude: I'm buying. Today the last avail chunk I saved since summer 2012's $27, was spent on silver. Despite the high Comex position. Because I feel safer with silver than with euro's, and it just needs some spending (yay crisis is over) to make others flock again to silver. I see alot negativity. That I also see as a signal to buy. Since the tail light story, I have 5-6 kilo more. Nearly all of it in recent weeks. Simply because the same bids that barely managed to give me a coin a month, now give enough silver to spend it all. Regards Atlas Mike.
The COT report of yesterday shows this: 19/02/2013 37956 $30.10-$29.30-$29.46 Producer/Merchant/Processor/User Long 13800 Short 53939 Swap Dealer Long 22686 Short 20503 Large Traders Long 27296 Short 9320 Other Reportables Long 11761 Short 3281 Small Traders Long 27179 Short 15679 This was the week before: 12/02/2013 46797 $30.60-$31.20-$31.10 Producer/Merchant/Processor/User Long 14384 Short 58555 Swap Dealer Long 20337 Short 22963 Large Traders Long 31071 Short 4733 Other Reportables Long 9134 Short 3400 Small Traders Long 26683 Short 11958 8841 positions were dumped, and the price dropped $1,64. That's 5391 positions per price dollar. Yesterdays/todays price was $28,67. If I assume the positions per price dollar was the same, then the current total position would be $31,10-$28,67=$2,43 x 5391=13100 less, or thus 46797-13100=33697. If I would use the 10 years recordlow position (thus 'worst' price case) of 26/06/2012, which was 12011, to determine a bottom price, then 33697-13100=20597 positions left to dump. 20597/5391=3,82 price dollars the Comex can remove. Todays $28,67-$3,82=$24,85 as silver bottom price. Keep in mind, I assumed a linear total position drop with dropping price, usually the lower the price, the more positions they need to dump to succeed in bringing the price lower, because they have to overcome/compensate for an increasing other (non-Comex) demand. That big 5391 position per price dollar is good (for those that don't like lower silver prices or want to see some support) news. But the good news is seriously needed, because the Comex started from a much bigger total position than in past occurrences of this price level.
I can put it in one sentence too you know, the Comex side of the silver market dumped the silver price down but it costed them alot positions.
That's a nice cross-check calculation - Thanks! Hopefully the law of diminishing returns is indeed kicking in, and they are emptying their shot locker.
They actually are increasing their short positions to dump the price. They can do it almost indefinitely because they use "fractional" silver (they issue multiple short positions for each 5000 oz they hold) and also game is rigged beyond repair I believe. The only thing that can stop their evil game is physical delivery. Yes they do have a couple of aces up their sleeve: raise COMEX margins and speculators will be forced to sell silver an masse, enforce the rules about no single player holding vast positions, but that means JPM among them. As a last resort they could settle all contracts in fiat to save their face, but that would mean game over. Even single big player (China, Russia, Bill Gates) could end the game by asking for considerable physical delivery. They won't do it for a while, because this means they won't be able to buy any more physical for a reasonable/low price. Ultimately I think that's how the paper silver game is gonna end: either single player or just huge demand for physical from everybody. Remember every time you buy physical this increases demand mints and refineries put on physical delivery.
Actually, all that happens is that the demand side, which has for silver futures always a net long total position, dump their longs, and since a contract requires two sides (seller and buyer), the short position is closed too (named 'covered'). So it's the opposite, the amount shorts drops since the amount longs dropped. And in the end, short positions are a hedge against the potential of a dropping price, and since people buy long positions only to draw out money from the market, if those long positions are abandoned, the potential of a dropping price decreases, and thus the supply sides hedge can suffice with a lower amount short positions too. And Comex margins have no effect on people owning silver outside Comex depositories. Those margins only affect those that bought silver but actually didnt want it (at least not at that price), only other peoples free dollars. So what difference to margins then make to the delivered side of the market? None. In the end, the paperrepresented demand was bogus anyway, and if it wasn't margins that forced some to sell or away from taking a position, then it would have been their position-dumps for profit later on.
26/02/2013 30886 $29.18 Producer/Merchant/Processor/User Long 13243 Short 52043 Swap Dealer Long 25619 Short 17705 Large Traders Long 25946 Short 13361 Other Reportables Long 11807 Short 2655 Small Traders Long 24540 Short 15391 19/02/2013 37956 $29.46 Producer/Merchant/Processor/User Long 13800 Short 53939 Swap Dealer Long 22686 Short 20503 Large Traders Long 27296 Short 9320 Other Reportables Long 11761 Short 3281 Small Traders Long 27179 Short 15679 Another 7070 long/short contracts/positions (35Moz) cancelled. The price barely moved, meaning that others bought a fat 30 Moz and prevented a price drop. Question now is who will run out first at which price, the Comex gang of its positions, or those others of their dollars. As of recent I ran out of euro's, so it will be a story without me. For what my silly 5-6 kilo matter.
A short Comex position trend update since previous: <date> <amount futures contracts> <end of day price at date> 02/04/2013 18503 $27.07 26/03/2013 24041 $28.63 19/03/2013 26439 $28.94 12/03/2013 29423 $29.19 05/03/2013 29183 $28.69 To help interpreting these numbers: A 3 years low is around 20000. A 10 years low is around 12000. A 3 years peak is 50000. A 8 years peak is 75000 (I don't have data for older). Every position reflects 5000 ounces in the spot price. So 50000 positions means 250 Moz. A year total silver supply is 1000 Moz.
This is a great read Pirocco and I just wanted to add my thanks. More reading and learning for me! I agree with your teach a man to fish ideology and it's one I prefer to adhere to being a producer not a parasite "Do not let the hero in your soul parish, in lonely frustration, for the life you deserved but never have been able to reach. Check your road and the nature of your battle. The world you desired can be won. It exists, it is real, it is possible, it is yours."
