Silver Has a Problem, And it is Getting Worse
Zero Hedge gives the Silver Problem some love
Today:
Zero Hedge gives the Silver Problem some love
Meta Stupid: Goldman and JPM on Meta Meltdown
Recap: GS trader on yesterdays activity. *rec read
Good morning: Yesterday morning we saw an advertisement for APMEX saying they would buy back silver coins above spot, which gave us reason to post this tweet1. The pricing power of Comex has finally started leaking in the public eye.
Then, Zero Hedge posted this, which makes the concept even more high profile….
As Physical Silver Demand Soars, Bullion Dealers Offer Huge Buy-Back Premiums
For those who have been keeping an eye on silver, things are getting a little tight.
Earlier Wednesday we noted a report from Ronan Manly of BullionStar.com, who revealed that more than 50% of deliverable silver on COMEX is suddenly 'not available.' Manly brought up this Oct. 19 tweet from metals expert Nicky Shiels, who said of delegates in attendance at the annual LBMA (Gold) conference in Lisbon; "they are mildly bearish Gold for the year ahead ($1830 by 2023s conference) but super bullish Silver ($28.30!) as the focus was on physical tightness driven by unprecedented demand."
Second, the spot market for silver remains in backwardation - meaning that the spot price of silver is above the futures price, which indicates an extremely strong demand for physical metal right now. ..
And as the chart below shows, while silver futures have gone nowhere in the last four months, the price of physical coins has been soaring...
Demand has become so strong that, as the chart below shows, the extent of the physical silver percentage premium over spot is almost unprecedented...
The result? Bullion dealers are offering giant premiums over spot to buy silver.
APMEX, for example, is offering $10 over spot per coin right now.
While SD Bullion is offering $10.50 and $11 over bid.
More from Dr. Wall;
Silver stackers we talk to on a regular basis seem to be getting tired of hearing about the market tightness without any movement in the bank spot price. However, obviously that could be about to change if the COMEX and LBMA vault drain continues for much longer. One of the individuals I speak to regularly who has first hand knowledge of a COMEX depository's operation told me recently that they didn't think there's any unspoken silver left, just people haven't figured it out yet. An interesting comment, given that there is supposedly 35 million ounces of registered silver left at the COMEX.
Some silver bullion production is ordered out through March 2023 and nearly every silver round/coin is at least 4 weeks delayed from purchase, most 6-8 weeks. There already exists on the wholesale market what will be manifesting in retail trading across the space in the coming weeks: a complete uncoupling of price for live, deliverable Silver. You can already see that in the US Silver Mint Eagles where premiums are now nearly 100% of spot price. In the rare occurrence someone is quoting inventory that's actually there, on a shelf and ready to ship that day, premium becomes almost irrelevant in this market. There's virtually no price quoted that is too high with the benefit of 3 hours hindsight. You snooze, you lose. -Dr. Tyler Wall, SD Bullion, Inc.
The big question, as always - where do we go from here?
END
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