THC:
I've been hearing for years that there is much silver in COMEX that is not "good delivery" .9999 grade. Wonder if its just the old story surfacing.
Penoles has been ordered to cut production by 26% because their smelter in Torreon has been emitting so much lead particulate matter that small children of this city have lead poisoning. This is not uncommon, and is why its so hard to permit a lead/zinc smelter anywhere in North America or Europe these days.
I expect we will witness a significant net reduction in silver production over the next several years despite new primary silver mines coming on stream. One major factor would be the sharp reduction in by-product silver coming from gold mines. With gold near $250, and maybe going to $200, many gold mines will close.
In summary, I think we are seeing the silver noose tighten. Silver could be held down for a while longer by 1) normal summer seasonal softness in other metals, and 2) the fall in gold. A substantial seasonal rebound in base metal prices this autumn could put silver up well over $5.00. Hence, I still adhere to buying options at or below $5.00, taking original investment off the table as the option moves up, and using momentum, relative strength and stochastics to spot the point to sell the remainder of the position. If silver begins a really big run, hopefully the charts, and intuition, will keep me in for the big move.
RH |
