Silver price discussion and analysis

[Telamelo]

MKR flying +7.41% .. made fresh highs!

 

[Dark1975]

Hi Dark1975,
I hold MKR (undervalued Gold producer with pretty good Silver resource as well) along with a speccie PMY.

Cheers tela

Mkr looks promising in 2022 on the MTA boppy project, I will dive further in to the info on this stock but a good small cap stock on face value

 

[Chronos-Plutus]

Hey guys,
Just gauging and was curious to see what silver mining companies people have,
I hold S32, SIL ca ( silver Crest mining) OZl and Bhp ,

I hold Myanmar Metals; not in production yet, in the development phase; here are a few brief interviews with John Lamb (CEO):

Watch this interview first, if you can, which is a few minutes:
https://videos.ctfassets.net/hnlfgs...73ca99ae02c6d0c9782/Myanmar_VO_2020-02-05.mp4


Then this interview, which is also a few minutes:

 

[Dark1975]

Mkr looks promising in 2022 on the MTA boppy project, I will dive further in to the info on this stock but a good small cap stock on face value

Thanks Telamelo for MKR bought at 36cents, i thought I'd share some important substantial shareholder purchase a couple days ago I noticed lance Rosenberg from tricom or parent company spinite pty Ltd,

 

[explod]

Silver is really starting to break out. A month back the gold/silver ratio was hitting 120 to one, now 70 to one.

Stocks such as SLV, SLR, RVR, PMY, ARD and HRD are ones to monitor.

Silver is up almost 30% since July.

Love my silver coins and SVL

 

[qldfrog]

and the ETF ETPMAG 45% profit since 06/07 yes a month.. and will be more tonight
I bought more 23/07 thinking hum that is pushing a bit already up 16% yesterday
silver the Zoom of metals but with actual usage and profit

 

[finicky]

Go ETPMAG

All Data Monthly

 

[Chronos-Plutus]

I just read an article by FXSTREET suggesting that Silver is often correlated with Copper because of its industrial applications: "It does have a safe haven status and can track the movement of gold but the price action does often correlate with copper and iron ore." (https://www.fxstreet.com/news/silve...ahead-of-this-weeks-fomc-meeting-202009141837)

I decided to test this claim and found that Silver is ~2.8 times more correlated with Gold than Copper. I used the weekly close data over 5 years for the commodities. See below:

 

[Dona Ferentes]

writing in Hero Zedge

The SLV ETF surged 11% late last week which came after Reddit user 'TheHappyHawaiian' posted the following thesis on buying silver noting that "the worlds biggest short squeeze is possible and we can make history."

'TheHappyHawaiian' cites two reasons to buy - The Short Squeeze and Fundamentals.

The short squeeze:​

Buy SLV shares (or PSLV shares) and SLV call options to force physical delivery of silver to the SLV vaults.
The silver futures market has oscillated between having roughly 100-1 and 500-1 ratio of paper traded silver to physical silver, but lets call it 250-1 for now. This means that for every 250 ounces in open interest in the futures market, only 1 actually gets delivered. Most traders would rather settle with cash rather than take delivery of thousands of ounces of silver and have to figure out to store and transport it in the future.
The people naked shorting silver via the futures markets are a couple of large banks and making them pay dearly for their over leveraged naked shorts would be incredible. It's not Melvin capital on the other side of this trade, its JP Morgan. Time to get some payback for the bailouts and manipulation they've done for decades (look up silver manipulation fines that JPM has paid over the years).
The way the squeeze could occur is by forcing a much higher percentage of the futures contracts to actually deliver physical silver. There is very little silver in the COMEX vaults or available to actually be use to deliver, and if they have to start buying en masse on the open market they will drive the price massively higher. There is no way to magically create more physical silver in the world that is ready to be delivered. With a stock you can eventually just issue more shares if the price rises too much, but this simply isn't the case here. The futures market is kind of the wild west of the financial world. Real commodities are being traded, and if you are short, you literally have to deliver thousands of ounces of silver per contract if the holder on the other side demands it. If you remember oil going negative back in May, that was possible because futures are allowed to trade to their true value. They aren't halted and that's what will make this so fun when the true squeeze happens.
Edit for more detail: let’s say there’s one futures seller who gets unlucky and gets the buyer who actually wants to take delivery. He doesn’t have the silver and realizes it’s all of a sudden damn difficult to find some physical silver. He throws up his hands and just goes long a matching number of futures contracts and will demand actual delivery on those. Problem solved because he has now matched the demanding buyer with a new seller. The issue is that the new seller has the same issue and does the exact same thing. This is how the cascade effect of a meltup occurs. All the naked shorts trying to offload their position to someone who actually has some silver. My goal is to ensure that I have the silver and won’t sell to them until silver is at a far higher price due to the desperation.
The silver market is much larger than GME in terms of notional value, but there is very little physical silver actually readily available (think about the difference between total shares and the shares in the active float for a stock), and the paper silver trading hands in the futures market is hundreds of times larger than what is available. Thus when they are forced to actually deliver physical silver it will create a massive short squeeze where an absurd amount of silver will be sought after (to fulfill their contractually obligated delivery) with very little available to actually buy. They are naked shorting silver and will have to cover all at once and the float as a percentage of the total silver stock globally is truly miniscule.

The fundamentals:​

The current gold to silver ratio is 73-1. Meaning the price of gold per ounce is 73 times the price of silver. Naturally occurring silver is only 18.75 times as common as gold, so this ratio of 73-1 is quite high. Until the early 20th century, silver prices were pegged at a 15-1 ratio to gold in the US because this ratio was relatively known even then. In terms of current production, the ratio is even lower at 8-1. Meaning the world is only producing 8 ounces of silver for each newly produced ounce of gold.
Global industry has been able to get away with producing so little new silver for so long because governments have dumped silver on the market for 80 years, but now their silver vaults are empty. At the end of WW2 government vaults globally contained 10 billion ounces of silver, but as we moved to fiat currency and away from precious metal backed currencies, the amount held by governments has decreased to only 0.24 billion ounces as they dumped their supply into the market. But this dumping is done now as their remaining supply is basically nil.
This 0.24 billion ounces represents only 8% of the total supply of only 3 billion ounces stored as investment globally. This means that 92% of that gold is held privately by institutions and by millions of boomer gold and silver bugs who have been sitting on meager gains for decades. These boomers aren't going to sell no matter what because they see their silver cache as part of their doomsday prepper supplies. It's locked away in bunkers they built 500 miles from their house. Also, with silver at $23 an ounce currently, this means all of the worlds investment grade silver only has a total market cap of $70 billion. For comparison the investment grade gold in the world is worth roughly $6 trillion. This is because most of the silver produced each year actually gets used, as I have mentioned. $70 billion sounds like a lot, but we don’t have to buy all that much for the price to go up a lot.
**If the squeeze happens, it would be like 40 years worth of their gains in 4 months **
The reason that only 8 ounces of silver are produced for every 1 ounce of gold in today's world is because there aren't really any good naturally occurring silver deposits left in the world. Silver is more common than gold in the earth's crust, but it is spread very thin. Thus nearly every ounce of silver produces is actually a byproduct of mining for other metals such as gold or copper. This means that even as the silver price skyrockets, it wont be easy to increase the supply of silver being produced. Even if new mines were to be constructed, it could take years to come online.
Finally, most of this newly created silver supply each year is used for productive purposes rather than kept for investment. It is used in electronics, solar panels, and jewelry for the most part. This demand wont go away if the silver price rises, so the short sellers will be trying to get their hands on a very small slice of newly minted silver. The solar market is also growing quickly and political pressure to increase solar and electric vehicles could provide more industrial demand.
The other part of the story is the faster moving piece and that is the inflation and currency debasement fear portion. The government and the fed are printing money like crazy debasing the value of the dollar, so investors look for real assets like precious metals to hide out in, driving demand for silver. The $1.9 trillion stimulus passing in a month or two could be a good catalyst. All this money combined with the reopening of the economy could cause some solid inflation to occur, and once inflation starts it often feeds on itself.

 

[explod]

writing in Hero Zedge

The SLV ETF surged 11% late last week which came after Reddit user 'TheHappyHawaiian' posted the following thesis on buying silver noting that "the worlds biggest short squeeze is possible and we can make history."

'TheHappyHawaiian' cites two reasons to buy - The Short Squeeze and Fundamentals.

The ratio has dropped to 64/1 today. Silver is off to the races now.

 

[rederob]

The ratio has dropped to 64/1 today. Silver is off to the races now.

I have never really been a fan of the ratio, especially seeing that POG and silver have different price drivers.
Here's why:


Versus"


Nevertheless, as the reddit team have had some recent success in the markets, silver looks to be a short term (at least) outperform.
Longer term silver has abundant supply through byproduct credits, whereas gold barely meets demand.

 

[noirua]

 

[noirua]

 

[DaveTrade]

Noirua thanks for posting those two videos, they were really interesting. I'm posting a couple of charts that look at the Silver market through a different lens, I'm not suggesting this is the best way to view it but I find it useful.

 

[DaveTrade]

If your not familiar with the above indicator please see below;

 

[peter2]

Looks like silver is going down to test the support at 22.00 (triple bottom). ASX silver companies are not in demand atm.

 

[frugal.rock]

Looks like silver is going down to test the support at 22.00 (triple bottom). ASX silver companies are not in demand atm.

This too, will pass, for today it would seem.
Are we ever going to see a physical silver squeeze?

POS doing its best to climb out of the mud overnight.
4hour bars.

 

[StockyGuy]

Silver still stubbornly holding above 22 USD... currently 22.185, just up from 22.155, looks shaky. I keep on asking myself at what price I'd be a buyer for long term ETF hold. Problem is it still looks expensive to me, considering March last year prices in the 12ish USD area.

 

[mullokintyre]

Last Friday after the Aus market closed, in the Northern Hemisphere markets, both Gold and Silver were traded into the red for about the fourth time in Four days. This morning before the market opened, both gold and silver were in the red further here in OZ.
Hence, I fully expected that stocks mining both of these would continue their downward trend.
The gold stocks followed expected behaviours, but were not marked down as much as I expected.
However, silver seemed a bit odd.
SVL, MKR were marked up. ARD was the only silver play marked down.
I was fully expecting to be able to pick up[ both MKR and ARD at cheaper prices than my last sales.
Perhaps the players seem to think a low in silver is upon us.
Mick

 

[Telamelo]

Trade the Trend *weekly update plus Silver chart (from 6:10 onwards)