Market Curiosity: Exploring Markets And Systems

January 19, 2011

UPDATE 2: LBMA SIFO must be a mistake? Looks like huge backwardation

Filed under: Just Watching — Tags: , , , — Jeff Fitzmyers @ 7:05 am

UPDATE Feb 11: COMEX backwadation to day 6, LBMA to day 7; Scotia Mocatta still out of 1,5 and 100 oz bars

UPDATE Feb 3: More recent post: Silver tasting LBMA backwardation, Scotia Mocatta out of silver bars, etc.

UPDATE Jan 22: Sorted out now.

UPDATE Jan 19th: A helpful article on Zerohedge FMX Exclusive: Silver Contango Crushed ā€“ Short Squeeze Imminent Or Position Limit Ruling Fall Out?

UPDATE Jan 19th: I have made charts of all the past SIFO data and don’t recall seeing something like this. I am sending an email asking what is going on. I would guess it is either a mistake, or panic.

Jan 19th: It appears to me that the negative numbers represent backwardation, and all the numbers represent lease rates.(??) Apologies if I have mislead in the past — I will sort it out this weekend.

No matter what the exact meanings of the labels, if this is not a data error, that seems to mean silver supply is tight relative to demand. Specifically:
– Silver you can get right now is more expensive than silver you can get in the future — despite the addition of storage and insurance costs of that future silver.
– And possibly, people are unwilling to lease silver at all.

References: LBMA silver backwardation ended, with a surprise

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