To answer your question properly will require someone with intimate knowledge which I don't have. Perhaps wrcmad can offer something solid. What I do know is the LME, for example, has more than 700 approved warehouses across Europe, Asia and the U.S.A. There is nothing to stop silver moving to Europe from the comex approved warehouses to create an illusion of shortage. It has been done before successfully. The comex can be a shell game and must be treated as such.
Maybe it is a bunch of the things mentioned here by others and maybe the 10 year resistance in Usd has people stacking up / and or waiting as well. I cant help but feel the whole down trend was my fault :lol: when I replied to @tozak in 2013. Maybe if I reply here to his very good post it will reverse the curse on silver that has enabled some to increase or even have a stack I enjoy reading what dealers are saying about the stock levels and what others are thinking. I try to take away a bit of knowledge from each post even when it might not be what I agree with or from the usual suspects.
Explanation of how the comex works https://www.bullionvault.com/gold-news/comex-gold-stocks-072420136
The current total of all registered gold is 182,611 troy ounces, or roughly 5.68 metric tonnes. There are a total of almost 8 million ounces of eligible gold in all the US Comex Warehouses. I have included that chart at the end. So some will say, 'see, there is more than sufficient gold in the warehouses. This is all nonsense.' And to that we may respond, yes, but at what price? That gold is presumably private property and not for sale at these prices, except for 182,611 ounces of it. http://jessescrossroadscafe.blogspot.com.au/2015/09/registered-only-gold-inventories-at-ny.html?m=1
From Martin Armstrong from my latest post http://research.perthmint.com.au/2015/09/14/who-is-the-player-and-who-is-being-played/ "They were moving silver from New York to London where the Buffett orders were being executed. This made the US warehouse inventories drop sharply. Go look at the analysts who talked silver up on that very fundamental. If they said there was a shortage of silver and you better buy it is going to $100, then you may be dealing with a shill or a biased analyst." Changing eligible to registered is and electronic process. A bullion bank buying/storing silver elsewhere and then delivering it into its own Comex warehouse (or others) can be done relatively easy but does have to be planned ahead and there could be containers of silver on the water now which no one knows about and then all of a sudden it "appears" in the warehouse. I would take these warehouse figures with a grain of salt.
So far as I can tell, the shortage is in retail silver ... not in gold. Couldn't this be because the GSR is out of wack right now and people are buying silver (at a retail level) rather than gold? It makes sense from my experience as I haven't looked at gold with a GSR upwards of 70. This could be why there are retail shortages in silver (and not gold) while the wholesale supply is untouched. Just a thought ...
After entering a storage facility, a warrant must be issued to the exchange for the metal within 3 business days. As far as registering eligible metal, it is just a case of filing the paperwork, and inventory is updated to the exchange daily by 2.00pm. From above, I'd say 2-3 business days. No problems. The idea that shorts can be surprised by a rush of delivery notices is unlikely since there's a position limit system in practice ahead of delivery. This is intended to prevent cornering of the market, by ensuring that a dominant position can never be accumulated by one party in a such a way that the physical market is overwhelmed. On top of this, traders can opt for an Exchange of Futures for Physicals (EFP), whereby the buyer or seller may exchange a futures position for a physical position of equal quantity. EFPs may be used to either initiate or liquidate a futures position, effectively bypassing the COMEX warehousing system. Futures contracts and a physical commodity equivalent can be exchanged outside of the exchange and an EFP form can be filed to the clearing department at the COMEX. Another alternative is to settle in cash. Enough from me now. Google is your friend.
Pretty much. I've spent half of the day on the phone with US suppliers sourcing product. Same story from all - raw material is readily available, there's been very slight increases in costs of 1000oz bars for fabrication (think 5-7c/oz extra premium) because of delivery demand, but production is just backlogged everywhere because of huge retail demand. Production at capacity everywhere and the lead times are getting longer. The past two weeks have seen US Mint production cut because of Labor Day in the US, putting even more pressure on ASE supplies, which has in turn resulted in MORE demand for private mint product, because ASEs are on allocation, and there was less to allocate this week. Every supplier is taking orders business as usual, but some suppliers I spoke to had suspended ASE sales simply because they had none and they did not want to pre-sell the next allocation. Unfortunately for stackers, most private mints are hiking their margins on both their own and sovereign mint products. ASEs are wholesaling for more than they were retailing a few months ago, and the premiums are changing every couple of days. Premiums are rising faster than spot can drop. The best data point in all of that is that "production is at capacity" - metal supply is not a problem, the supply bottleneck everywhere is manufacturing capacity, and once you hit capacity, you can't just buy a few more induction ovens, continuous casters, rollers, blanking presses, coin presses, etc out of a catalog somewhere and have skilled staff automagically appear to operate them. There is no "silver shortage". The market is experiencing a "retail investment silver fabrication capacity deficiency" (RISFCD, pronounced rizfukt). Google it - it's a real acronym, this thread will probably even show up in the results :lol: The bloody premium hikes though - methinks a few US distributors will be buying new superyachts for Christmas. Good time to be a mint owner. Rizfukt is making them rich.
There is no "silver shortage" in the sense there is much silver above ground, as there always has been and always will be. However, there is a marked difference now in the amount of silver being sold to refiners and to local coin stores by "collectors" and "stackers", etc., most likely due to the low price levels. There will always be some silver being sold by folks who desperately need money, but the usual "flow" of silver has changed in the past month or so based on what my local dealers are telling me (from what they hear from refiners and such and see in the business). There will never be a shortage of silver as if it has disappeared off the face of the earth, perhaps like fungible commodities like grains and such. The issue is, at what price are people willing to release their silver? Obviously that price is higher than what we see today. Whatever is going on now is different than what has happened since 1980 in the silver market with respect to supply. Silver seems to be the only asset whose "paper price" drops as investor demand skyrockets. If silver drops further in the paper markets, these delivery delays for retail product we see will get larger. Perhaps if silver stayed low for months and months we would see more inventory coming into the market from current holders, but that remains to be seen. One of my coin dealers who has some friends in the mining business says here in the US some smaller mines are holding back metal due to the low prices, as well as laying off miners. Many mines will sell at a "loss" due to cash flow need, but at some point even that is not feasible. Many copper mines (where silver is a byproduct) are also having trouble due to the very low prices, and they too are shuttering smaller operations and laying off workers in some places here. Thus, there will never be a silver supply problem (as in the silver is all gone) in the sense there will always be silver, sitting someplace in a vault or in a hole in the ground, but whether or not people are willing to sell is another thing. That is why right now US junk silver is WHOLESALE over $5 over spot. That's crazy. That stuff used to sell for less than melt a couple of years ago when the price was higher and more consistent. US junk silver comes only from current holders since they can't make it anymore (talking pre 65 coinage). Virtually all the new supply wholesalers will get is newly minted material, either gov or private. Not even seeing much in the way of old bars/rounds being sold back into the "system". It's all new crap. Just my opinion. Jim
Meaningless dribble. If you remove the fact of demand from the equation then of course there will never be a supply problem. But in the real world there is both supply and demand, and we rarely, if ever, see persistent market equilibrium between the two.
Wow, that's a fantastic retort. Point out ONE thing I said that is INCORRECT. You can't, so you make a "meaningless dribble" remark yourself. Since you probably don't understand what I was trying to say, let me try and clarify. I will type slowly so you don't get confused. Some PM bears are trying to make it look like all is well in the silver world because there exists silver someplace above ground in bar form (I am not referring to anyone here, just a general view I keep seeing on PM blogs). I am a PM bull and think such an argument is not relevant, because there will always be silver available, but not necessarily accessible silver at current prices. In other words, some try to make everything seem OK now in the silver market and that unless somehow it can be proven all the silver is GONE, as if space aliens came down and removed it from the planet, everything is peachy. For those zecharia sitchin fans, of course gold and aliens is another story, but I digress. My response was geared towards those who make the argument that everything is OK because there still exists silver above ground some place, and by acknowledging there will never be a time all the silver is truly GONE. However, it is highly possible supply problems, caused by the current excessive demand AND LOW PRICES, can result it true supply deficits which I BELIEVE we are witnessing now to be unfolding and will more thoroughly be revealed in coming weeks/months. This could eventually result in a situation where it is kind of, just partially OK, to say- ALL the silver is "gone". But of course it is not gone off the planet, just gone off the market. It will take a while to eat through the 1000 bars that exist, but if prices keep dropping and demand stays even just steady (which it will gain if prices drop), it WILL happen. Right now 100 ounce bars are starting to dry up and wholesale premiums on 100 ounce bars has gone up more than a few percentage points. This has NOT happened in the silver market since at least 1980 and probably further back, but that I cannot verify. The ONLY cure for the above is rising prices. If prices keep dropping we WILL see relevant supply problems. The silver will be GONE. Just my opinion. Jim
You have a serious lack of understanding of the concepts you so confidently pontificate about. Since you asked, here's one stupidly wrong thing you said: Now feel free to look up the concepts of supply and demand, shortage and surplus. Source:
You are free to think what you wish Pete, but I will leave you with this. Even is DEMAND is as high as it can go, even is PRICE is as low as it can go, and even if SUPPLY is as low as it can go, the silver still exists in the same amount as if these conditions were changed (let's pretend there is no loss of metal in industrial use for this). This is not an economics lesson but a reality lesson. The silver is there, will always be there. It will just not be FOR SALE at current prices. I don't need a chart like you post. Just tell me price and the availability level of the metal. That's all I care about That's why I say a rise in prices MUST happen if things even stay the same as at this moment. There will not be enough raw silver to keep this level of demand at these prices (or lower). There is much silver in the pipe that is being fabricated, but eventually that will dry up. I don't understand your problem with what I am saying? What is your view or theory? Do you even have one? Just my opinion. Jim
I think you are confusing physical silver demand with the ability of mints to produce premium retail products. There is a huge difference.
You are mixing up concepts related to the total, aggregate quantity of silver that exists, and the quantity that producers are willing to supply at a specific price point on the supply curve at a specific point in time, and consumer demand at a specific price points at a specific points in time. Shortages and surpluses are relational concepts. The total silver that exists (known and unknown) is a fact.
One flows from the other. Physical demand from what I call Investment side of silver is what is causing this current lack of available product in the retail and wholesale markets. I am not considering what transpires in the Comex market, because in large part that is paper only and very few try to get delivery that way. It is much easier (or WAS much easier) to get physical via the wholesale markets - whether large bars, small bars or rounds. I have been an active buyer (and seller) since 2005, and have not seen what we see now with respect to supply. That was even when silver dropped to $8 or so in 2008. Premiums went up yet there was still metal on the shelves at the local stores, unlike now. Wholesale premiums are quite high as well, especially junk silver. Just my opinion. Jim
