Market Curiosity: Exploring Markets And Systems

March 14, 2011

Silver backwardation update – March 14 – not much change

Filed under: Just Watching — Tags: , , , — Jeff Fitzmyers @ 9:49 am

Just watching the chart now.

Scotia Mocatta has 5 of 7 silver products offered for sale.

Debunking the Gold Bubble Myth By: Eric Sprott & Andrew Morris, Contributing Editor: David Baker

The Sprotts Expect Silver to Keep on Sizzling

There are two parts to the silver story. One is industrial demand and one is investment demand. Industrial demand has been quite strong, but the thing that’s been very unusual in the last year or two has been the marked increase in investment demand. There are many ways of viewing investment demand, and it’s obvious we’re going to experience some serious growth here. Judging from the data points that we look at, and as Larisa would mention, when we look at our sales of gold and silver bullion, we’re actually selling about five times more dollars of silver than we are dollars of gold. That means we’re selling 200 times more silver bullion than gold bullion. The U.S. Mint is selling as many dollars of silver coins as dollars of gold coins. GoldMoney.com, an online precious metals bank, also has sales of silver and gold that are about equal.

I want to emphasize that we’re dealing with the flow of money here. The price difference is 40:1; but with that kind of money flowing into this commodity versus that commodity, you also have to look at the availability of one versus the other. In this case, believe it or not, that’s 1:87—there’s $1 of silver available in the world for every $87 worth of gold. The number of coins is explosively larger than the dollar figure. Something has to give when you have the same amount of money going into two products that are priced 40:1.

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