Interesting view in the WSJ from MKS Finance. I suppose you can find a contrary view too if you look for one. Anyway, the article: SINGAPORE (Dow Jones)--Gold and silver were down in Asia Thursday while platinum group metals saw some profit-taking after recent gains. A sell-off in regional equities after stronger-than-expected China gross domestic product data pulled the rug out from under risk appetite, dragging the precious metals lower with equities and industrial commodities. The fourth-quarter GDP result, up 9.8% on year compared to average forecasts of 9.2%, increased concern that China may take more tightening measures in the near term, including increases in interest rates, which would be bad for precious metals as it would increase the opportunity cost of holding positions. At 0825 GMT, spot gold was at $1,362.80 a troy ounce, down $7.70 since Wednesday's New York close, with Tokyo Commodity Exchange December 2011 gold at Y3,624/gram, down Y22. Spot silver was at $28.36/oz, down 41 cents as it tracked gold lower. MKS Finance said prospects for silver were still bright, however, as it had already absorbed significant selling pressure in recent sessions, possibly due to some producer hedging via forward sales. "We are particularly bullish in silver, which held very well, close to highs, while a supposed 20 million ounces has been sold in the market. Thereby, in that context, we wouldn't be surprised should the metal quickly reach $35/oz in the short term," it said. Other brokers reported tightness in the physical silver market in London Wednesday, although the metal still ended lower on the day. Spot platinum was at $1,819/oz, down $14 after hitting a 30-month high of $1,854/oz Wednesday, while palladium was at $802/oz, down $10. -By James Campbell, Dow Jones Newswires; 65-64154-082; [email protected] http://online.wsj.com/article/BT-CO-20110120-703005.html
I like the "supposed 20 million ounces" quote. Even the financial commentators are getting the picture about paper silver.
