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Old 11-11-2011, 07:11 AM   #1
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Investment demand for physical silver

Quote :
A new Thomson Reuters-GFMS report, commissioned by The Silver Institute, forecasts silver investment will achieve yet another historically high total this year in spite of a significant level of position unwinding by institutional investors.

In the report, "The Silver Investment Market-An Update, November 2011", Thomson Reuters-GFMS says the outlook for silver prices remains bullish, "with the potential of prices nearing, if not exceeding, the $40/oz, a realistic prospect as the fourth quarter develops."

"However, should silver exceed $40," the report cautioned, "some unwinding may occur, principally of institutional positions, given their focus on upside potential. This raises the possibility of some deleveraging in the future markets."

However, the study noted, "this should have little impact on silver's safe haven qualities, with the potential for retail and HNW [high-net-worth] investors to raise their asset allocation (in favor of both silver and gold."

This situation "argues well for bullion coin and small bar demand, not only in western markets, but also in India and China." Indian physical investment demand could comfortably exceed 45 million ounces this year, up from 29 million ounces last year.

"Overall, therefore, world investment demand in 2011 is expected to realize a near record high total in volume terms," the report predicted, and "in value terms likely to reach $10bn on a net basis for the first time."
...
Meanwhile, total silver ETFs holding have lost some ground. By the end of October, total holdings were reported at 577 million ounces, some 44 million ounces below the record peak of 621 million ounces established in April of this year.

The study determined the U.S. and Germany dominated the global physical investment market. "This year a fresh peak will be set, in excess of 41 Moz., which will therefore achieve a similar gain to the 20% improvement posted in 2010.

An interesting aspect of physical demand has been the market for U.S. Eagles manufactured by the U.S. Mint. Although the level of demand has fallen considerably short of the number of coins actually minted, European Eagle demand may amount to roughly 20%-30% of the total U.S. Eagles produced.

This year a fresh peak of 41 million coins is forecast for the U.S. Mint's American Eagle silver bullion coins sales, compared to last year record of 34 million coins. Globally bullion coins sales are on target for another record high, according to the study.

"This sales pattern therefore suggests that U.S. retail coin demand is somewhat lower than might have been expected (if one had assumed that Silver Eagles were consumed almost entirely in the United States)," said Thomson Reuters-GFMS.

In Canada, the market is dominated by sales of the locally produced 1oz Maple Leaf bullion coin. Sales of the coins rose by over 50% in 2010 with a further substantial increase anticipated this year.
...
More: http://www.mineweb.com/mineweb/view/...ail&pid=102055

Source report: http://www.silverinstitute.org/image...pdateNov11.pdf

I thought this was an interesting report. The market supply of 100oz bars could be a measure of IRA investing.
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Old 12-04-2011, 08:47 AM   #2
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From OP:
Quote :
...
This year a fresh peak of 41 million coins is forecast for the U.S. Mint's American Eagle silver bullion coins sales, compared to last year record of 34 million coins. Globally bullion coins sales are on target for another record high, according to the study.
...
Update:
Quote :
Sales of US Silver Eagles were a mere 1.384 million for the month of November, the lowest monthly total in nearly 4 years. ...

From a long-term supply-demand standpoint, sales totals for all of 2011 have reached 37.86 million, already nearly 10% higher than the previous yearly record of 34.663 million, set in 2010.
http://silverdoctors.blogspot.com/20...gle-sales.html

Sales for ASEs appear to have slowed down dramatically from October to November. Chatter around the blogosphere that I've been watching makes me think people have been waiting in cash for a better buying opportunity on a silver smash down to $26 or so. I'm sure the MF Global story (which broke in the first week of November) also had people waiting to see how things would shake out.
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Old 12-04-2011, 12:33 PM   #3
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Perhaps they are simply lying about sales. After all, we're not talking about a bunch of boy scouts here, we're talking about the Brotherhood of Darkness.
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Old 12-06-2011, 05:23 AM   #4
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Originally Posted by PMBug View Post:
Chatter around the blogosphere that I've been watching makes me think people have been waiting in cash for a better buying opportunity on a silver smash down to $26 or so.
I am one of those looking for $26 or so, possibly, though not likely, even $20 in the next 3 months. However, if a good deal comes along in the meantime, I am ready to jump. I did manage to get some at $26 at the end of October.
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Old 12-06-2011, 07:39 AM   #5
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both gold and silver have been trading pretty shitty over the past week. Gold is back to 1710 as i write this. Technical damage has been done and we need to retake 1726 pretty soon here.
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Old 12-06-2011, 07:55 AM   #6
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Physical is going on sale for Christmas as the Euro implodes and COMEX inventory games play out. I think there will be a lot of peeps taking advantage of the sale as all that supposed cash on the sidelines waiting for ~$26 silver starts moving. Perhaps we get another opportunity to test the inflection point hypothesis for a new price point.
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Old 12-06-2011, 08:15 AM   #7
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Originally Posted by PMBug View Post:
Physical is going on sale for Christmas as the Euro implodes and COMEX inventory games play out. I think there will be a lot of peeps taking advantage of the sale as all that supposed cash on the sidelines waiting for ~$26 silver starts moving. Perhaps we get another opportunity to test the inflection point hypothesis for a new price point.
What makes me cautious about waiting for $26 silver is that everyone and their dog is calling for it. Just like how everyone is calling for the Euro to plummet and the dollar to spike to the mid 80s. We are already $18 off our highs in silver which is a blessing. I just can't think of WHY anyone would drive the price down there. Who would sell?

Most funds I know are hedged out the ass and are waiting for a resolution out of europe. If the ECB finally caves and decides to print, that should help gold. If the Euro falls apart, gold should skyrocket. I just don't get it...
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Old 12-06-2011, 08:28 AM   #8
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Originally Posted by dereksatkinson View Post:
... I just can't think of WHY anyone would drive the price down there. Who would sell?
The usual supposition is JPMorgan in order to cover their massive short positions. They can manipulate the price down and trigger stop loss selling without actually having to sell much themselves (at least they could when there were a lot of people trading - recent COT reports suggest they may have more difficulty doing this going forward). They hammer the market in periods of low volume with large bids.
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