Silver ? Heres what I dont understand

[SilverStacker]

If the vaults are so short of physical ? If they are flying around cargo 747's full of the white metal "which only a desperate type or a moron would do ? If India ? "arguably the worlds biggest silver market during its whatever holiday where they buy the most silver" is dry ? With silver so high ? And more likely to go much higher ? And very doubtful it will go much lower in dips ? If there are no Hunt brothers and their scams ? , so that we can't even anticipate much price adjustment in the future ?

With the Historic model of silver transactions, the availability covered by lending contracts ? In fact with the entire system going to hell in a handbasket and who knows where silver is going to end up, even this year, except every expert agrees it will be 3 figures ?

With all that ? With all that in it entirety ? Then why in hell would refiners refuse to take in 90% pre-1965 silver ? You'd think they'd be begging for it, just set a price and let the metal come in. Then, refine it to 100% pure bars and throw it on a ship or trucks and let it flow to London or the COMEX. 90% pure is still pretty pure and I know theres a limited silver refining capacity here in America, I worked at a recycler, but with everyone sitting on gobs of the stuff wouldn't it be worth the investment ?

I just dont get it.

 

[Voodoo]

Eh well that's a heck of a run-on sentence. But I get the point in the end.

I think they're biggest issue is the volatility. They don't want to invest in silver. And when they take that much in they hedge using futures but that looks a little more Sus now. As such, they are starting to rethink some of how the business works, IMO.

 

[nickndfl]

Stockpiling will kill the paper game and turn the PM market into an OTC. The west is losing control of the PM markets. At some point spot price on the COMEX will mean diddly if there is nothing to deliver.

 

[Cigarlover]

refiners are loaded to the gills with 999 silver to process. It's a lot easier and faster to process 999 silver so why bother with the other stuff for now. If they ever run out of 999 to process then they will take in some of the other stuff. They are even being selective in taking in 999 thus the reason they dont want to mess with 1 or 5 oz stuff. 10 oz minimum.

 

[pmbug]

... why in hell would refiners refuse to take in 90% pre-1965 silver ? ...

Refiners are focusing production on .999 fine LGD bars for COMEX/LBMA. 90% silver and sterling (92.5%) require extra work to purify. The refineries want .999 fine to speed up production (avoiding the extra work for less pure silver).

 

[Voodoo]

I don't quite buy that explanation. If anything 1,000 oz bars are the Easiest thing to produce. You should be able to churn and burn those if you are going do anything.

 

[Voodoo]

I do wonder what their typical inflows and outflows for a month looked like 5 years ago versus today. That would be interesting.

 

[Casey Jones]

I know nothing - this is an idiot spouting off. But I expect (without any facts) that this may be the suppliers taking a turn on manipulation, creating a retail and industrial shortage.

They see where the market is going. People are restless; uneasy. Now, finally, they're looking to PMs; and the masses...well, gold is the money of kings. The people have to buy what they can.

So they're deliberately holding back production. They don't believe it will cut sales; but why sell this week for XX crowns, when they can sell next week, or next month, into a market that's maybe 20-percent higher?

For years the banksters have hammered the market with paper contracts. Now there's a grassroots appetite for physical, and they're gonna get their pound of flesh.

 

[Cigarlover]

I just heard tonight that at least 1 refinery is on a 10 day delay. Located in Dallas.
I'mnot exactly sure what that means. Does that mean they will quote you a price today and just delay accepting the metals for 10 days but honor the price or are you just in some holding period for 10 days and you get a quote then.

This is going to impact smaller coin shops in a big way. Cash flow is dependent upon them buying today and moving that metal right away to the refiner. If they have to sit on it for 10 days either the prices they offer are going even lower or they will just stop buying altogether. They could also lower the premiums and just start selling closer to spot in order to move product.

 

[rblong2us]

And I am puzzled that with a shortage of .999 yet a surplus of lower grades that no one will buy, how can mr slammy work his magic ?
And if the market goes bidless, does that imply infinity or zero for the underlying value ?

 

[pmbug]

... how can mr slammy work his magic ? ...

Mr. Slammy needs LBMA to maintain a stock of London Good Delivery bars to play paper games.

 

[Casey Jones]

Mr. Slammy needs LBMA to maintain a stock of London Good Delivery bars to play paper games.

So...to play paper games, there needs to be a Potemkin Inventory standing there, with your neighborhood Honest Broker, smiling and ready to do Good Delivery.

Interesting. Feeds in with my theory. The interruption in supply, while demand soars, breaks that facade and calls into question the whole derivative juggling-act.

 

[Voodoo]

To me it looks like the whole physical market is Starting to Lockup. We are on the way to Unobtainium.

 

[Wellsburg]

Somebody big must be dumping "paper metals" or profit taking.

Gold and silver down big past 24 hours.

 

[Joe King]

I just heard tonight that at least 1 refinery is on a 10 day delay. Located in Dallas.
I'mnot exactly sure what that means. Does that mean they will quote you a price today and just delay accepting the metals for 10 days but honor the price or are you just in some holding period for 10 days and you get a quote then.

This is going to impact smaller coin shops in a big way. Cash flow is dependent upon them buying today and moving that metal right away to the refiner. If they have to sit on it for 10 days either the prices they offer are going even lower or they will just stop buying altogether. They could also lower the premiums and just start selling closer to spot in order to move product.

It's a delay in the processing and settlement of their customers silver because of large influx of scrap silver. Which makes sense considering the recent run up in price.

 

[rblong2us]

Gold down $270 ( so far ) in a day
This has to be the biggest move ever .........

And I look forward to a similar upday in the not too distant future

 

[Cigarlover]

Supply and demand is dependent on location. In wealthier communities I'm sure demand is high. In not so wealthy communities people are selling to pay bills. Since refineries are backed up it would appear there is more selling then buying rn. If dealers could move silver themselves they would definitely take advantage of that. Way more profitable than taking less than spot from the refineries.

 

[nickndfl]

Gold down $270 ( so far ) in a day
This has to be the biggest move ever .........

And I look forward to a similar upday in the not too distant future

The price goes.up in an escalator and down in an elevator.

 

[pmbug]

Eventually it goes up in a rocket

 

[Joe King]

After hitting record highs, shouldn't a selling spree be expected?

 

[rblong2us]

After hitting record highs, shouldn't a selling spree be expected?

yes but not a nearly $300 drop in a few hours .......

 

[Casey Jones]

After hitting record highs, shouldn't a selling spree be expected?

Not like this.

The big buyers appear to be institutions - central banks.

Apparently they weren't happy with what their large POs did to pricing - time to get the algos to trade some paper!

 

[nickndfl]

Sh*tbags!

 

[Bottom Feeder]

Its silber — that's what it does, stop whining. Couple weeks ago at the coin show it was about 48 & change when I was trying to sell my 100 oz bar for spot. It went up to fast anyways…

 

[Joe King]

Its silber — that's what it does, stop whining. Couple weeks ago at the coin show it was about 48 & change when I was trying to sell my 100 oz bar for spot. It went up to fast anyways…

Exactly. Anytime there is a run up like we've experienced, a drop is in order.

I'm only surprised it didn't happen just prior to hitting $50.



In 2011, end of April/beginning of May, it dropped $14 in short order after hitting it's high then.

Climbed back to $44 only to be crushed back to $30 and ended the year around $27


It only took 3 Months to go from $26 to $48

Then it fell almost $7 in one day, on May 12th.

Fell almost $5 on Sept 23rd.


1980 was the same too.

On Jan 22nd 1980 it fell just under $8, and another $3 the next day.
.....and in 1980 dollars, that was huge.


Within a Month, it was down almost $20

Jan 18th it was over $49 and on Feb 22nd it was $30

 

[Voodoo]

To me it looks like the whole physical market is Starting to Lockup. We are on the way to Unobtainium.

James basically says as much in this video. Good video and a little bit of history all the way back to the peak apparently in like 1853 or so. Same game, been around a long time.

 

[Joe King]

On Jan 22nd 1980 it fell just under $8, and another $3 the next day.
.....and in 1980 dollars, that was huge.

Just to further the point, $8 in 1980 is like $31 today.

The total two day drop adjusted for inflation, would be $43.25

 

[Ttazzman]

And I am puzzled that with a shortage of .999 yet a surplus of lower grades that no one will buy, how can mr slammy work his magic ?
And if the market goes bidless, does that imply infinity or zero for the underlying value ?

...no expert here....but i think the issue is there is not a shortage of 999 silver.......just a shortage of 1000oz tradeable comex bars (obviously they have sold more comex bars than they can deliver via contracts).......so refiners are melting and pouring 999 silver into 1000oz comex bars at full capacity and still cant keep up.......and with the comex sucking up all the refiner capacity with 1000oz bars eventually new retail availible 999 silver will dry up to the retail market

as i see it right now....comex is sucking up all the refiner capacity world wide .......the refiners/smelters obviously can source silver from mines or recycled supplies such as the retail products we sell to dealers that go to wholesalers-refiners

if comex demand continues eventually refiners will add capacity.....sooner or later capacity to refine will meet demand one way or the other

a byproduct of this that i havent heard mentioned is i wonder how the market is for MINERS selling dore bars into the refining market since if the refiners do not want alloyed retail products for refining they may be also turning down mine production or down pricing it.....obviously the miners that can refine and produce comex bars in-house will have a price advantage and a direct market for their production

to boil it all down ....i personally think this is not a silver shortage .......just a shortage of contract fullfilling silver

again i could be wrong no expert here just my take on things in the simplest of terms