Silver Price Watch

[STKR]

It kinda looks like the AUD/USD is topping out may be set to fall over the next few weeks, which will be good for metals priced in AUD. The overall trend is down and it's been consolidating for a little while now but It's yet to show signs of a breakout on the upside. We're at a determining price point but it's struggling to move past it. If we don't break out here, then I expect it to make it's way down to .64c over the next month or so from its current 0.67c level.

Silver has begun it's long overdue pullback. A correction down to $31 would be considered normal but it could turn around at the $31.60 mark if buying resumes. The weekly charts don't indicate that it's done with it's push to higher highs and we're still very much in an uptrend.

 

[belever]

To the moon...

...unless the moon landing is fake

 

[pmbug]

...
Because we have no way to analyse just how much silver is available in aboveground stockpiles ...

LBMA + COMEX do publish their vault numbers:

The west has roughly 671.2 mtoz vaulted at LBMA + COMEX not owned by SLV. Total global including China is ~743.6 mtoz

https://www.pmbug.com/threads/silver-demand-drivers.6364/post-101315

 

[alor]

hard to believe, most likely the info is fake anyway,
continue to drain the metals to the change in tide, we got to swim with nude people

 

[STKR]

LBMA + COMEX do publish their vault numbers:

https://www.pmbug.com/threads/silver-demand-drivers.6364/post-101315

Yes they do, but that's not where the massive void in supply is coming from. Somehow the 200+ Moz deficits are being met, otherwise we wouldn't see a multi-year slump in the price at the same time as multi-year deficits. The source of the supply has to be from a place that isn't required to provide records publicly, otherwise it would be recorded in the silver surveys... Much like Government Sales were prior to 2016.

 

[pmbug]

... Somehow the 200+ Moz deficits are being met, ...

200 mtoz/year / 12 months/year = 16.667 mtoz/month

This is in line with what is draining from the LBMA + COMEX.

 

[STKR]

200 mtoz/year / 12 months/year = 16.667 mtoz/month

This is in line with what is draining from the LBMA + COMEX.

You're right. It doesn't perfectly correlate but when you factor in reductions of other holdings like SLV etc, then it gets close enough.

Well then, this changes everything as far as disclosure. The Comex has listed holdings of approx 300 Moz's and the LBMA has listed holdings of a 800 Moz's - a combined total of 1.1 Billion Oz's. That would be:

5.5 years @ 200Moz deficits
2.75 years @ 400Moz deficits

Now I'm very curious as to what happens to the Comex and the LBMA when they run dry? What function will they continue to serve? And will they just allow their reserves to be drained completely based on incoming demand, or will they begin to limit deliveries before that time comes? Either way, both outcomes result in real physical shortages in the near future if supply and demand figures remain on their current trajectory.

What are your thoughts on this? Do you think they'll continue to let their reserves deplete at current rates until there's nothing left, or do you think some form of restrictions would be imposed before that happens?

 

[pmbug]

... The Comex has listed holdings of approx 300 Moz's and the LBMA has listed holdings of a 800 Moz's - a combined total of 1.1 Billion Oz's.

320.8 Moz of the LBMA's vault totals are owned by SLV as of May 9.
173.1 Moz of the COMEX's vault totals are owned by SLV as of May 9.

Those ounces aren't available for industry/China/India to plunder unless investors sell.

...
What are your thoughts on this? ...

Whether restrictions are imposed (to keep the exchanges liquid/working) or not, I expect the GSR to normalize to what mining produces (scrap refining is too small to really factor AFAIK).

The estimated global production of silver in 2023 amounted to 26,000 metric tons.

Global silver production per year 2023 | Statista

How much silver is mined each year? Despite having remained relatively stable over the past two decades, global silver mine production has increased recently.

www.statista.com

Approximately 3,000 metric tons of gold was produced from mines worldwide in 2023

Topic: Gold mining worldwide

Find the most important statistics and facts on the global gold mining industry

www.statista.com

According to those numbers, in 2023, silver was mined at a 12:1 ratio to gold. I have seen other people mention that silver is being mined at 7:1 presently. The Statista numbers likely include everything - including mining production from places like China that do not get sold on the open market. I don't know what the exact ratio is today for silver/gold production that makes it to the open market, but it seems to be less than 15:1.

If I'm right, #silversqueeze is going to happen. It's not necessarily imminent, and it won't occur in a straight line, but it is possible that the GSR moves closer to 12:1 (or even lower) within the next 2-5 years barring a global economic meltdown that kills industrial demand.

 

[STKR]

@pmbug

I've just been analysing the silver surveys and the Comex + LBMA holdings over the past 7 years, and although a correlation between deficits and holdings is there for the past two years, all the other years don't add up. In fact, when we had a slight market surplus of 56 Moz's in 2020-1, the Comex, SLV and the LBMA saw a 500+ Moz combined increase in their holdings! So what appears to be happening is they're being fed a supply from an undisclosed source and they're using that supply to meet market demand.

 

[STKR]

320.8 Moz of the LBMA's vault totals are owned by SLV as of May 9.
173.1 Moz of the COMEX's vault totals are owned by SLV as of May 9.

It's interesting that you bring this up. Maybe there's some shifting of metals on paper for appearances. We've heard reports of this being done with the gold market with serialised bars going missing, being melted down and turning up elsewhere.

Maybe they're not being fed a supply, it's just being passed along to cook the books. An increase in SLV holdings would also show as an increase in LBMA and Comex holdings. And JP Morgan is the custodian for SLV. It's all very suspect to me.

When you get time, can you share the link to the vault data you quoted?

 

[pmbug]

I saw on Twitter/X not too long ago (yesterday? within the last week for sure) a tweet with a photo of a US DOD document stating that the military stockpile of silver had depleted a year or so ago (exact time was mentioned, but I don't recall the detail) and the military was now buying silver on the open market at $30/toz. I wish I had saved a reference to the tweet because Twitter's search feature fails me in finding things.

 

[STKR]

I saw on Twitter/X not too long ago (yesterday? within the last week for sure) a tweet with a photo of a US DOD document stating that the military stockpile of silver had depleted a year or so ago (exact time was mentioned, but I don't recall the detail) and the military was now buying silver on the open market at $30/toz. I wish I had saved a reference to the tweet because Twitter's search feature fails me in finding things.

Sounds very interesting. I'll try search this up and share here if I find anything. I thought the military reserves were discarded long ago and used to start the Silver Eagle program. I wasn't aware they had any because silver was no longer listed as a strategic metal. This may have changed over the past 20 years because the military reports I was reading were outdated.

My hypothesis is that when silver was removed from coinage, they had massive stockpiles. Something in the realm of 10 Billion Oz's. Because of this, the military didn't require strategic reserves. I speculate that the listed government sales for decades on the silver surveys was the government intervening in the markets to contain the price. Then the majority of the stockpiles were sent to (or acquired by) the Comex and SLV to serve the same function without direct government involvement.

 

[STKR]

@pmbug

I found an article that confirms it's not even listed, but that doesn't mean they didn't have reserves and aren't buying on the open market. It's an interesting read nonetheless.

Why Was the U.S. Silver Stockpile Raided by DOD?

Silver has been used for thousands of years as ornaments and utensils, for trade, and as the basis for many monetary systems. Of all the metals, pure silver has the whitest color, the highest optical reflectivity, and the highest thermal and electrical conductivity. Backstory. Whenever you...

www.moneymetals.com

 

[pmbug]

Oh hey! I found it:

 

[STKR]

I saw on Twitter/X not too long ago (yesterday? within the last week for sure) a tweet with a photo of a US DOD document stating that the military stockpile of silver had depleted a year or so ago (exact time was mentioned, but I don't recall the detail) and the military was now buying silver on the open market at $30/toz. I wish I had saved a reference to the tweet because Twitter's search feature fails me in finding things.

I think I found what you're referring to. It's hard to read the fine print but It says that the DOD has run out of their reserves. They used to buy it from the Defence Logistics Agency for $3.97 but their supply has been exhausted. Due to the scarcity of Silver, they are required to buy it on the open market for $30. They suggest the situation is so serious that they're speaking with vendors to replace Silver for lithium.

This is very interesting. When I looked into silvers military uses years ago, one thing stood out to me and that was the use of silver in batteries for torpedoes and missiles. I think it's silver nitrate or something. This makes total sense.

 

[STKR]

Oh hey! I found it:

Haha you beat me to it!

 

[STKR]

$31 US is holding for now. $32.50 is showing strong resistance. We actually dropped $2 AUD in a matter of 30 minutes today. That's some serious selling in a short period but such market movements still align with a correction to the moving average in an up trend. A breakout below $31 US would indicate a greater correction is upon us. But I think we could be back up testing $32.50 by midnight tonight.

 

[pmbug]

Consolidation periods suck.

 

[STKR]

Consolidation periods suck.

Tell me about it! I was expecting the previous 4 hour candle to make a move but it did nothing. One of my biggest weaknesses trading was knowing these times weren't ideal to enter the market and placing trades anyway. It's probably where I lost the most $$; lacking discipline.

 

[alor]

Stray Cat ears formation