FLASH

Article from 15th September

http://www.reuters.com/article/2014/09/15/silver-etf-holdings-idUSL1N0RG1L520140915

(Reuters) - Holdings at the world's largest silver-backed exchange-traded funds (ETFs) rose to a record high as a pullback in prices prompted long-term retail investors to increase purchases of the precious metal.

The tonnage of silver bullion held by the world's six largest silver ETFs increased by 104 tonnes, or 0.6 percent, to a record 17,135.04 tonnes on Friday, the latest Reuters data shows.

To put this into perspective the graph Dr Bubb posted shows that China Silver inventory for July was 148 tonnes where as the inflow into the ETF is 104 tonnes last Friday alone so equivalent to over two thirds of the total Chinese inventory. Silver is sharply down again this week so it will be interesting to see if the ETF inflows keep increasing as the prices decline which could then trigger a turning point in the price.

http://www.bloomberg.com/news/2014-09-18/silver-s-etf-demand-outpaces-gold-by-most-ever-chart-of-the-day.html

Silver’s ETF Demand Outpaces Gold by Most Ever: Chart of the Day

By Luzi Ann Javier Sep 19, 2014 12:00 AM GMT

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Investors in exchange-traded funds backed by silver have stayed loyal to the metal longer than those who bought gold.

The CHART OF THE DAY shows shares outstanding for the biggest U.S. silver ETF surpassing those for the nation’s largest gold fund by the most since 2006, when the iShares Silver Trust was created. Retail buyers are sticking with silver even as prices fell 4.4 percent this year, the most of any precious metal. Gold’s 2 percent gain wasn’t enough to halt declines in selling, and assets in the SPDR Gold Trust are set for a second annual loss.

“The perception is that silver will do well, and should outperform gold as the economic recovery strengthens,” Tom Kendall, the head of commodities research at Credit Suisse in London, said in a telephone interview. “Belief in silver’s dual properties, as a financial asset and also as an industrial metal, appears to remain strong.”

While money managers hold the least bullish bets on silver since they were net short on June 10, demand for the metal from solar panel makers is seen rising to a record this year by CPM Group, a New York-based researcher. Demand from jewelry and silverware makers will climb 4.3 percent, according to CPM.

U.S. economic growth will accelerate to 3 percent in 2015, from 2.1 percent forecast for this year, according to a Bloomberg survey of 89 analysts. Signs of stronger growth helped push the Standard & Poor’s 500 Index of shares to a record yesterday, while the Bloomberg Dollar Spot Index reached the highest since 2010, reducing the appeal of precious metals as alternative investments.

Buyers of silver are less swayed by price movements, because unlike gold, the metal is a “buy and hold and forget about it kind of investment,” said Kendall, the third-most accurate precious-metals forecaster tracked by Bloomberg in the eight quarters ended June 30. “It’s not so actively managed by the retail crowd. It’s tucked away as a retirement store of value or hedge against disaster.

I bought a rather large chunk of silver yesterday, its not looking like good timing so far but as I am in the UK I was worried a Scotland Yes vote would hit sterling so went in for a larger amount rather than average my position down like I would normally do.

Standard bank have released a report today and it talks about the Silver demand in China, it is slightly bearish but does mention there is a report coming out of China towards the end of next week with the Silver import data for August so I will look out for that and hopefully it will give us more information.

http://www.kitco.com/reports/CommsDaily_Sept122014.pdf

It looks like Chinese imports have been low and they have been depleting their own stockpiles rather than importing more Silver. The turning point in the Silver price is likely to come from the Chinese starting to import more Silver so I think these reports could be important. It does mention historically in September and October Silver imports to China are usually low but I am not sure if this has as much relevance as it used to as their stockpiles were much higher previous years but if this is still the case maybe the rally is another month away.

Is there anywhere we can regularly check the Shanghai Silver inventory levels? Is the info reported to the general public or is it only certain people who have access to this information?

Anyone know what the average silver mining production cost is and the average operating margin on top of that? It must be near the stage where mining companies are making losses?

 

This stuff doesnt materialize out of air, there must be a floor here somewhere?

I have just looked this up on the silver institute website and by the looks of this it is only $1.52 per ounce. I wish i had looked this up before loading up at $17. I have pasted the quote below.

Silver Production

Global silver mine production rose by 4 percent in 2007, with particularly solid gains from Chile, China and Mexico. Total silver mine production reached 670.6 Moz last year. Peru was the world�s biggest silver mining country in 2007, followed in the rankings by Mexico, China, Chile and Australia. Last year, silver generated at primary mines drove global totals higher, increasing by 11 percent to account for 30 percent of all silver mined. Cash costs at primary silver mines rose to a weighted average of US$1.52 per ounce, driven by a combination of labor, consumables and energy cost rises.

Considering the big jump in the Euro I would have expected a decent jump in Silver in Asian trading especially after Fridays unjustified drop.

Intresting Bloomberg Article and very strange imo the fact that it is so bearsh. One guy says he would not touch Gold with a 10 foot pole. Another says it oversold yet would not buy. If any asset class is oversold why would you not want to buy? this applies to anything from housing to stocks to Gold.

Gold Falls on Reduced Demand for Inflation Hedge; Silver Drops

By Pham-Duy Nguyen

Sept. 10 (Bloomberg) -- Gold tumbled to the lowest price since October on speculation a drop in commodity costs and a stronger dollar will reduce demand for the metal as a hedge against inflation. Silver plunged to the lowest since 2006.

The Reuters/Jefferies CRB Index of 19 raw materials dropped for a ninth straight session and is down as much as 24 percent from a record reached in July. Gold has declined 26 percent from an all-time high in March and the euro is trading 13 percent below its July peak against the dollar.

``Gold's diseased,'' said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. ``A lot of the inflationary fear has eased because we've seen energy and commodity prices come spiraling down. The dollar has not given up a lot of its gains. That's leaving traders up in the air about what to do with gold. I wouldn't want to touch it with a 10-foot pole.''

Gold futures for December delivery plunged $29.50, or 3.7 percent, to $762.50 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $761.50, the lowest for a most-active contract since Oct. 24.

Silver futures for December delivery plummeted 82.5 cents, or 7 percent, to $10.89 an ounce. Earlier, the price touched $10.81, the lowest since Oct. 5, 2006.

Silver has fallen 27 percent this year, while gold has dropped 9 percent. The declines today were the biggest since Aug. 15.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has fallen 11 percent to 631.2 metric tons from a record 705.6 tons on July 11.

Oil Skid

From mid-July to Sept. 2, commodity index investors sold $39 billion of oil futures, said Michael Masters, president of Capital Management hedge fund. Ospraie Management LLC, the hedge-fund firm run by Dwight Anderson, last month said it will shut down its commodities fund after losing 39 percent this year on wrong-way bets on energy and mining stocks.

Lehman Brothers Holdings Inc., which today reported the biggest loss in its 158-year history, bought a 20 percent stake in Ospraie in 2005.

``Commodity funds are getting out,'' said Joel Crane, a metals strategist at Deutsche Bank AG. ``Ospraie is indicative of what's happening across these markets.''

Funds are unwinding bets on a gain in raw materials and so- called commodity currencies, along with wagers on a falling dollar, Crane said.

Gold, which often climbs in times of financial turmoil, hasn't benefited from a plunge in U.S. equities and the credit crisis, analysts said.

Not Normal

``Surprisingly, people have not flocked to gold as a flight to quality,'' Zeman of LaSalle said. ``Gold is not acting like it normally would. People's risk appetite is very low. No one is willing to step in and buy at this moment.''

Any rebound in metal prices will be fleeting, said Dennis Gartman, economist and editor of the Suffolk, Virginia-based Gartman Letter.

``Gold is egregiously oversold,'' Gartman said. ``It is due for a rally, but it will be short-lived and it will be technical in orientation. The trend is down. Weakness is not to be bought.''

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

OK - so we're all a bit bruised.

Here's a hypothetical question:

 

If you could get back all your losses on PM's and Juniors now, but only on the condition that you put all the money into a bank account and left it there (GBP, AUD or USD let's say) - would you do it?

You should suggest this offer to the central banks im sure they would be more than happy to bail us out on the condition we never purchase PM's again

Not quite the jump I was expecting I would like to buy the silver etf tomorrow so i will be please if it stays fairly low.

According to Kitco, NY Globex opens in less than half an hour (2300 GMT), then Sydney at midnight and Hong Hong at 0130.

Thanks i'm keeping an eye out see if I can get in quick enough before it goes up.

It looks like the dollar is falling quite hard in out of hours trading (as reported by IGIndex, so make of it what you will), so may be a "shiny" start to the week, in dollars at least.

What time does asian trading start it might be worth getting a spreadbet going to until tomorrow morning I was hoping to buy some $12.32 Silver but may not get the opportunity tomorrow.

Just read this on Bloomberg,Not a good sign.

Gold Bulls `Running for Cover' Signal Price Drop: Chart of Day

By Millie Munshi

Aug. 20 (Bloomberg) -- Gold, down 21 percent from a record $1,033.90 an ounce in March, may be headed down after open interest in New York futures contracts for the precious metal plunged to the lowest level in 11 months.

The CHART OF THE DAY shows open interest, or the total number of contracts yet to be closed, liquidated or delivered. This reached 365,611 on Aug. 12, down 26 percent from a four- month high on July 18 and the lowest since Sept. 10. Open interest on the Comex division of the New York Mercantile Exchange reached 593,953 on Jan. 15 -- the highest since at least 1994 -- before gold rallied another 15 percent to a record on March 17.

``Open interest in gold is down sharply and it just shows you people are running for cover from this market right now,'' said Ron Goodis, the futures-trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``No one wants to get into gold now.''

Gold plunged 8.4 percent last week, the biggest drop in 25 years. Gold for December closed yesterday at $816.80 an ounce.

Commercial users of the metal, including investors or mining companies, also have reduced their bets on price gains to the lowest since September. Net-long positions fell by 20 percent from a week earlier to 130,660 contracts on Aug. 15, the biggest drop and the lowest level since September.

``An outflow of passive and active investment money'' means ``it is hard to be positive about the out for precious metals over the next month or so,'' John Reade, the head of UB AG metals strategy in London, said in a report on Aug. 18

silver back up to $13 lets hope it stay there.

Its a bit concrening that Gold seems to be falling faster than Oil due to the fact that it is possible Oil could bottom in the $80-$100 range although I suspect $100 is probably the floor but it means Gold probably still has further to fall.

Couldn't believe my luck when I saw the prices this morning and bought another 1000oz silver. I warn you the last twice I have bought the price has plumetted so there may be a bargain coming your way.

In August 07 I was 100% invested in Gold and Silver but gradually reduced my positions. I am now thinking of doing the same I will put around half of my money in tomorrow and if there is a decent pullback invest the other half.

That's my reading of it Gatesy. In a word: volatility.

 

I do remember they changed the margin requirements for silver on the Comex around about April 20th, 2006 and we got a horrible nasty sell off

Is this likey to affect both gold and silver, i.e if the gold price falls will it take silver with it?

Looking into this a bit more, the suggestion seems to be that it was a forced sale to cover a margin call on oil. That makes sense if you think of what went on at the weekend and the (daft in my opinion) expectation that Saudi would pull a rabbit out the hat and oil would fall today. That backfired and any short would have been squeezed. Dumping gold (and silver) at the open could have provided the funding but, like you say, it would have needed to be a big position.

IMO Long Gold and Short Oil is looking like a pretty good trade now. My theory is if both rise Gold will rise much more than Oil so there will be an overall profit same if both fall there is much more potential downside to Oil than there is to Gold. I also can't foresee a scenario that Oil rises substancially and Gold doesn't. As long as you have enough money to maintain the margins this seems like a good trade to me.

I was considering these a while back, until I came across the following article which kind of put me off... a kind of reality check about the pitfalls of trying to be too greedy (well, that and my lower understanding and familiarity of these methods).

 

Thanks for the info. I decided against it in the end I may set up a long spreadbetting position instead and put I smaller amount into the ETF to spread my money round abit. As its only a short term position I can't justify the fees of buying twice the amount through bullionvault Goldmoney etc and I didn't really want to have a majority of my net worth in ETFs incase something went wrong with the company running it even though I think it is unlikely.

Does anyone here use the Leveraged precious metals etfs through ETF Securities? I am interested in purchasing some as I want to add to my position for a short term purchase of about 6 months in addition to my core position and was wondering if anyone has any experience of these and would recommend them. I appreciate that they dont exactly follow the price but as long as they are close enough for a short term trade hopefully this should not matter too much.

The US economy would just fall off the cliff. Helicopter Bernanke won't do this.

Even if they did raise a quarter point here and there isn't going to stop the dollars decline they would need to increase rates to at least 6% to do this and like you say there is no chance of that happening.

Anyone seen the anti Gold comments on the front page of HPC? That site is now getting beyond the joke and has taken an anti Gold stance altogether. Look at the comment about the CNN article.

I have finally managed to track down my favourite thread from the HPC site. I was formerly FLASH_2007. As has been mentioned $1050 looks like the next short term target for Gold and $25 for Silver. Its all happened a bit too quickly for my liking, I switched some of my Gold to Cotton a few months back and then planned to switch back to Gold but the Golds gone up just as much so a short term correction would come in very handy.