Market Curiosity: Exploring Markets And Systems

February 24, 2011

Backwardation update for Feb 24: about the same as yesterday

Filed under: Just Watching — Tags: , , , , , , , , — Jeff Fitzmyers @ 9:09 pm

King World News interviewed Dave Madge director of sales at the Royal Canadian Mint. When asked if the RCM is having trouble acquiring silver Madge responded, “Demand right now for silver is through the roof and it shows no signs of slowing at this point. Sourcing silver is becoming very difficult. We are competing with a great many players when it comes to purchasing silver and many of these players are bidding the price higher… We are anticipating it to become even more difficult to secure supplies in the future. This is based on what we are seeing firsthand and what our suppliers are telling us.”

Scotia Mocatta was briefly out of 1, 10, 100 oz bars, a week ago. They have have been out of 1 kg bars for the past 6 days. The 100 oz bars are out of stock again.

Still a sizable $1.16/ oz difference between the front month and December 2015.

The LBMA is about the same as yesterday.

IF the fractal is a repeat, possibly expect silver to rise to 40-46 38 $/oz over the next 20 trading days, if the LBMA 12 month SIFO does not make a new low.

References:
+ Harvey Organ has today’s delivery and warehouse details.
+ Silver backwardation update for Feb 23 2011 and long term chart
+ SLW – long short term and long term calls -4%, +60%, +65%, -15%

3 Comments »

  1. Man what a wild ride today was. I see the backtest area you have circled and it wouldn’t really surprise me if there was another test in that area tomorrow due to upcoming expiration.

    There are a few months on the Comex silver futures trading well above the front month now, possibly due to today’s raid. It will be interesting to see if backwardation becomes worse again after April becomes the front month.

    I don’t know if you saw this article but it claims there is a huge comex supply squeeze developing:

    http://news.coinupdate.com/huge-comex-silver-supply-squeeze-developing-0695/

    Comment by silverflaunt — February 24, 2011 @ 10:01 pm

  2. Are you going to continue including March and April when analyzing the backwardation? I was looking at today’s trading volume and noticed that the next up delivery month of May had more volume than either March or April. Because of that I think I’m going to start with the month of May going forward when looking for backwardation.

    Comment by silverflaunt — February 25, 2011 @ 2:21 pm

  3. Thanks, I saw that article. Not sure why the author talks about the “two-tier” silver spot system. That’s how the dealers make money. Maybe I misunderstand??

    I include everything the CME settlements page shows. I assume it’s important to include all months that are trading to see the full picture.

    Comment by Jeff — February 25, 2011 @ 5:52 pm


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