Silver price discussion and analysis

[Mr Z]

I noted this in the gold thread, but it is a small silver mine.

They are closing out hedging positions for a profit.

http://www.alcyone.com.au/images/alc...aishooghip.pdf

...if it applies to one it applies to all, so you should see more of this activity.

TH wanted to see quantity in demand, well, here you have one source. For many of these guys it is now cheaper to go mining on the Comex and LBMA than in the pit. Many of them are required to deliver metal into these forward sales so it will not necessarily be restricted to paper activity. Mind you it will not matter much as far as price is concerned, when they turn buyer it will be hedged on the Comex regardless if it isn't directly done on the Comex.

 

[Mr Z]

Just FYI...

Tulving silver supply, scroll down.

Note the minimums, not a one coin at a time dealer but not big money granted.

Selling out of silver slowly.

http://www.tulving.com/goldbull.html

Don't mistake that for a metal shortage issue, this is a supply chain issue, the supply chain simply cannot cope with the wild fluctuations in volume that investment demand can generate. The fact is that nobody is willing to step up manufacturing capability in response to demand until they see and believe that it will be sustained. Given the investment required that is logical.

As I said before it is just an indication of demand not a significant statement on metal availability per say. That is to say coins are coins, they need to be made there supply is not indicative of the raw material supply. At least in the short term, should this persist then maybe the story has changed.

 

[Trembling Hand]

Oh yeah.... and in the real world, beyond your screen, this type of buyer reaction has been a very reliable indicator of an approaching high or low. Now it ain't a high is it?

Actually I'm surprise it hasn't already had a damn good bounce. I'll say if it doesn't kick on by Monday/Tuesday night its more likely that we will see another low print come end of next week. So it just may be a high.......

 

[Mr Z]

Actually I'm surprise it hasn't already had a damn good bounce. I'll say if it doesn't kick on by Monday/Tuesday night its more likely that we will see another low print come end of next week. So it just may be a high.......

I am looking for a low in the 19 area, I don't think we have not got the low yet and it likely will not come until the first week or two of May! A high, now you are just being silly

 

[explod]

Based on a calculation of kilo bars on ebay the average bid for pysical silver per ounce is Aus$34.50

The paper spot price is Aus$22.60

As it is of interest to me personally, and for the benefit of my ASF friends, I intend to conduct this service each Sunday,,, free of charge.

 

[CanOz]

Based on a calculation of kilo bars on ebay the average bid for pysical silver per ounce is Aus$34.50

The paper spot price is Aus$22.60

As it is of interest to me personally, and for the benefit of my ASF friends, I intend to conduct this service each Sunday,,, free of charge.

Perhaps if you intend to use eBay as an approximation of an auction market, you should also give an idea how long bids stay alive for, you need to factor in TIME. An efficient market discovering a fair price should do slow and steady heavy volume at the fairest price. A price lower than a fair value price should do less volume (as buyers scramble to purchase at what they perceive to be an "unfair" value") and the inventory at that price should move quickly. Obviously, vise versa for a high price as sellers rush to unload inventory at a profit in what is perceived to be an unfair price.

The eBay exercise could prove to be an value discovery process, as it would provide an auction market for the physical at the "retail" level.

Perhaps you could track both gold and silver Explod?

In regards to the Comex silver price, you would not expect that the current price to necessarily be the fair value price after a move like we saw...the price should return to the mean to test that fair value within a reasonable period of time...According using a monthly & weekly VWAP we can attempt to visualize where that "value" area lies at the moment...for GC as well as SI.

Here are the monthly and weekly Volume Weighted Average Price Channels. The center of the channel is fair value according to THIS market.

Let see if the market can test this price in the coming days/weeks. Price can be manipulated temporarily, but not permanently, just ask the Japanese...



CanOz

 

[explod]

Thanks for the ideas CanOz and take them onboard.

Looked at gold but could not find offers today. I may also need to include samples from dealers. I did notice that there was still a fairly large spread when the pirces were higher, from memory, spot 31 to 40 ebay. Have thought for some time it could be worthwhile. We will see.

 

[FlyingFox]

Based on a calculation of kilo bars on ebay the average bid for pysical silver per ounce is Aus$34.50

The paper spot price is Aus$22.60

As it is of interest to me personally, and for the benefit of my ASF friends, I intend to conduct this service each Sunday,,, free of charge.

I would prefer using the average quote from a set of bullion merchants. You can get a 1 kg bar for around the $25 mark not the $35.

The problem with ebay is that you have enough uneducated buyers to skew things and the whole auction mentality kicks in.

 

[young-gun]

Does anyone in here buy well above spot? Not for a bar of bullion, but for items like 1 oz canadian maple leafs, kookaburras 1oz coins, silver eagles, 1-2oz snake coins. The kookaburras and snakes seem available at aus bullion companies.

I have never understood why people would purchase these. Is it of the belief they would be easier to sell off instead of 66 rounds for example? If you were going to buy silver wouldn't you go for say a 5 or 10 oz bar and save on the purchase?

I was just looking online at abc bullion, they are flogging a 1 oz PAMP bar for 52.70, or you can buy a 2 oz snake coin for 59.50. Who the hell would buy the 1 oz PAMP bar? and why is there such varying price differences?

I personally buy in kilo bars as it seems to be the msot cost effective way, and is rarely much higher than spot from my dealer.

 

[FlyingFox]

Does anyone in here buy well above spot? Not for a bar of bullion, but for items like 1 oz canadian maple leafs, kookaburras 1oz coins, silver eagles, 1-2oz snake coins. The kookaburras and snakes seem available at aus bullion companies.

I have never understood why people would purchase these. Is it of the belief they would be easier to sell off instead of 66 rounds for example? If you were going to buy silver wouldn't you go for say a 5 or 10 oz bar and save on the purchase?

I was just looking online at abc bullion, they are flogging a 1 oz PAMP bar for 52.70, or you can buy a 2 oz snake coin for 59.50. Who the hell would buy the 1 oz PAMP bar? and why is there such varying price differences?

I personally buy in kilo bars as it seems to be the msot cost effective way, and is rarely much higher than spot from my dealer.

smaller denominations are easier to sell and keep I guess. Also easier to purchase. The big difference in price maybe due to factoring in service costs and minting cost.

One thing I did notice the last time I was at a dealer was that gold or silver in metric denominations tended to be slightly cheaper than that in troy oz.

 

[explod]

I would prefer using the average quote from a set of bullion merchants. You can get a 1 kg bar for around the $25 mark not the $35.

The problem with ebay is that you have enough uneducated buyers to skew things and the whole auction mentality kicks in.

Rubbish on p/m's they are mostly experienced dealers selling, but not of late, have been following it for 10 years.

My understanding with the dealers is that unless you have long standing accounts or stand in large queues for long periods this is no longer practical. The physical is just not there anymore, which is the point I am trying to get through.

You tell me where I can buy 20 x one kilo bars at open for business in the morning (and take delivery in the hand)near to spot, say AU$30 an ounce just to be fair on you?

 

[FlyingFox]

Rubbish on p/m's they are mostly experienced dealers selling, but not of late, have been following it for 10 years.

My understanding with the dealers is that unless you have long standing accounts or stand in large queues for long periods this is no longer practical. The physical is just not there anymore, which is the point I am trying to get through.

You tell me where I can buy 20 x one kilo bars at open for business in the morning (and take delivery in the hand)near to spot, say AU$30 an ounce just to be fair on you?

Things might have changed in the month since but last time I bought some physical was about a month ago. Ordered online, paid cash and picked up the next morning. I bought from goldstackers in Melbourne.

Will they have 20 bars, don't know. At the moment they are quoting ~$780 per kilo.

If you are buying such a large amount, get it form the perth mint and amortize the delivery cost. I would be surprised if the perth mint can't meet your order.

 

[explod]

Things might have changed in the month since but last time I bought some physical was about a month ago. Ordered online, paid cash and picked up the next morning. I bought from goldstackers in Melbourne.

Will they have 20 bars, don't know. At the moment they are quoting ~$780 per kilo.

If you are buying such a large amount, get it form the perth mint and amortize the delivery cost. I would be surprised if the perth mint can't meet your order.

Thanks for that, will report back.

 

[FlyingFox]

Thanks for that, will report back.

Not a prob. A lot of dealers that resell, may not have stock or are reluctant to sell due to price drops. Also if they are selling Pamp only they have to wait for overseas supply to arrive. perth mint dealers should have more stock. Just my thoughts, I might be wrong.

 

[Mr Z]

ebay lags....

1. Listing times
2. Unsophisticated sellers that don't hedge.

Dealers, the bigger the better are your best indication.

JMO

 

[Trembling Hand]

Actually I'm surprise it hasn't already had a damn good bounce. I'll say if it doesn't kick on by Monday/Tuesday night its more likely that we will see another low print come end of next week. So it just may be a high.......

Silver aint looking too good....



Cannot wait to buy some more as it keeps falling..................

 

[Country Lad]

Silver aint looking too good....

Unless you have SDI shares.

Cheers
Country Lad

 

[young-gun]

Cannot wait to buy some more as it keeps falling..................

Cannot wait to buy some more as the PAPER price keeps falling

 

[Ann]

This chart for silver appears to have a very bearish Ascending Broadening Wedge (magaphone tilted upward). A very dangerous pattern which can have quite a nasty fall when and if it falls down out of the megaphone shape.

Over several months I watched the quarterly gold chart also forming this shape. The result was carnage for the gold price when it fell out of the megaphone shape. Here is a link to the gold chart just before it fell spectacularly. #9801 https://www.aussiestockforums.com/forums/showthread.php?t=2366&page=491

Will this megaphone herald the same with silver's price as it did with gold? Let's see!

I am using a different chart as my normal chart does not show volume and volume plays a roll in the shape's definition which I have included on the chart.

 

[Mr Z]

$19.xx ???