Bill & all,
URL: biz.yahoo.com
''Deliverable silver is getting harder to find, resulting in a premium in London over New York prices, and the silver forward price curve has swung into backwardation, something that has not happened on a sustained basis since 1980,'' he said.
''Backwardation'' is a market price structure where prices of a commodity for immediate delivery are higher than price for delivery in the future.
''But hedge funds and bullion banks may of course be riding these fundamentals to their advantage,'' he said.
COMEX March silver ended up 42.7 cents at $5.875 an ounce, after seeing a new contract high at $5.885. The COMEX March/May spread swung into a backwardation of 1.5 cents.
Estimated total COMEX silver volume was a higher-than-average 45,000 lots.
In the bullion market, spot silver fixed at $5.8350 an ounce, the highest fix since May 1995, while the spot price was higher than the three month price at $5.8205 and the six month price at $5.7980, reflecting the lack of available deliverable near term supplies.
COMEX warehouse silver stocks fell a further 564,012 ounces in Tuesday night's data to 124,135,001 ounces, a new 12 year low.
The gap between newly-refined silver supplies and fabrication demand widened widened to 197.8 million ounces last year and another supply deficit is expected this year also, CPM Group's Kempf said.
Silver is mainly used in photography, jewellery and electronics applications.
The relative strength of silver saw the spot gold/silver ratio tumble further Wednesday to 48.70-to-1, its lowest level in more than a decade.
If I understand the numbers correctly, there could be severe shortages within the next six months. Sometimes it only takes a higher price to bring out the sellers though. Sorta like PFG stock.
Dave |
