Buzz, not in Clown world. They are down to flat at best.
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AGQ & SILJ should explode on open.
$50 in 1980 is equivalent in purchasing power to about $196.59 today, an increase of $146.59 over 45 years.It's gonna hafta go A LOT higher to beat that $50.00 price from 1980.
Silver’s falling , but not because new supply showed up.
What’s really happening is liquidity breaking before inventory does.
Dealers and funds are being forced to dump paper positions to meet margin calls. Futures are falling faster than spot, so the gap keeps widening even as both drop.
The link between COMEX and LBMA is jammed — credit’s pulling back and no one’s stepping in to arbitrage.
It looks like a price crash, but it’s actually a funding squeeze.
And the irony? This kind of flush only makes the next squeeze worse. When the selling stops and real metal bids return, there’ll be fewer shorts, less liquidity, and no buffer left to contain the move
Why would they have margin calls on long positions in mining shares with the price of metals soaring?
Why would they have margin calls on long positions in mining shares with the price of metals soaring?
Way too early to panic at a pull-back. As others have pointed out in many places, shorts have to cover losses and generally the only way to do that is to sell. That is also a way that the bullion banks manipulate, but it can also happen naturally. With such a massive run-up over the past several weeks, shorts have to be feeling the squeeze. Let's see what it does overnight, and the next couple of days. I frankly will be a little surprised if the market doesn't just shrug off this brief "dip" (though prices are still higher than a day or two ago) pretty quickly. Maybe tonight. Regardless, the fundamentals of a shortage of physical haven't changed.We got a new high in silver that we can shoot for next time. I have been alive to see it hit 50 3 times now. If I have to wait another 15 years I might make it to see it do it again. Feels like the miners started the selloff this morning. They were already pulling back after we broke 50.
The big red candles and topping tails should put a lid on this rally for a minute. Perfect timing too as miners will start to report earnings again soon. Earnings should still be very good though and may fuel the next rally in the mining sector.
Not with the topping tail I am seeing and the huge volume on this sell off. I could be wrong and often am but this looks like a reversal to me. If it recovers tonight with the selloff we have had today then it would be the biggest double reversal I have ever seen.15 years? Silver is likely to break $50 again in the next 15 hours as China wakes up tonight.
Oh is that what the lease rate stuff is all about? I dont live in that world so dont have a clue how it all works.He was not talking about mining shares. He was talking about margin calls on COMEX futures.
Oh is that what the lease rate stuff is all about? I dont live in that world so dont have a clue how it all works.
I'm still learning this stuff myself, but essentially, he was pointing out that paper positions in COMEX futures were being dumped hard as futures were falling faster than spot was in London OTC market. It looked like a liquidity issue. COMEX futures are in pretty strong backwardation (less than spot) right now:
There are 2 different "lease rate" stuffs as I understand it. The lease rate for physical silver in the LBMA system (data of which is not public and can be found piecemeal when some insider posts a note on LinkedIn or where ever - about 20-30% today last I saw) and the borrow rate for SLV shares (which is public and just over 12% presently). Both indicate a physical silver supply shortage in London.
London (LBMA) has run dry with no available silver. COMEX has silver, but it's unclear if the negative EFP (futures - spot being negative) is enticing anyone to ship COMEX silver to London presently.
We got a new high in silver that we can shoot for next time. I have been alive to see it hit 50 3 times now. If I have to wait another 15 years I might make it to see it do it again. Feels like the miners started the selloff this morning. They were already pulling back after we broke 50.
The big red candles and topping tails should put a lid on this rally for a minute. Perfect timing too as miners will start to report earnings again soon. Earnings should still be very good though and may fuel the next rally in the mining sector.
Yesterday (10-9) in silver
Yesterday bore witness to some very dramatic moves in the silver markets. Let's see how it played out...
PSLV
Yesterday PSLV added another 914,946 units to the trust. PSLV continues to add units to the trust (on top of the 6M units added the day before) in spite of what appears to be some intraday market manipulation attempts (see citation below). PSLV also added 1.45M ozt (~45.1 metric tons) to the vaults - the largest one day addition since September 3. Every 1,000 ozt of silver that PSLV adds to their vaults is a London Good Delivery silver bar that is not available to the COMEX or LBMA to settle contracts.
COMEX
Yesterday, COMEX activity report for 10-8 (COMEX reports activity for the previous working day) showed another 586k ozt (18.2 metric tons) withdrawn from the Asahi vaults and 2M ozt (64 metric tons) withdrawn overall. This is occurring as someone is buying and immediately standing for delivery on October (non-delivery month) contracts for silver (see citations below). We'll have to wait until this afternoon to get data for activity yesterday 10-9 and it's possible we'll see some massive withdrawals if the bullion banks are indeed needing to move silver to London to maintain liquidity for the OTC (spot) markets.
The CME announced margin hikes for gold and silver trading yesterday and that may be what sparked the margin calls that slammed silver down from $51. These margin hikes always have a limited half life and diminishing returns on dampening buying demand. I expect trading today will already have absorbed the new margin requirement. The train will keep chugging along.
SLV
My "canary in the silver mine" is still sounding alarms - indirect evidence of London's diminishing liquid free float (available silver). Yesterday, the shares available to borrow stayed near zero and the borrow fee has spiked above 12%. Meanwhile, SLV reports (Blackrock reports shares / JPM reports inventory) adding 1.3M shares and 1,179,079.90 ozt (~36.6 metric tons) yesterday. The additional shares appeared to be quickly absorbed by the borrowing demand as the borrow fee remains over 12%. You can see in the screenshot below how the shares availability yesterday barely affected the borrow fee. I expect more fireworks today. Just how high can the borrow fee go?
SFE/SGE
China has resumed trading, but I have not, as of the time I composed this, seen this mornings update for the overnight Oct 10 trading activity. The Oct 9 trading indicated the SGE/SFE were trading at a discount to the LBMA/COMEX - they have some catching up to do if they want more silver from the West.
I wouldn't take Any "Spot" rate. Who knows what they are using there. Real backwardation on the Comex is back months lower than the front month.
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