Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17
Can Marine Le Pen Win? French Presidential Election Forecast 2017 - 21st Apr 17
Why Stock Market Investors May Soon Be In For A Rude Awakening - 21st Apr 17
Median US Household’s Wealth Has Declined by 40% Since 2007 - 21st Apr 17
Silver, Platinum and Palladium as Investments – Research Shows Diversification Benefit - 21st Apr 17
U.S. Stock Market and Gold, Post Tomahawks and MOAB - 21st Apr 17
An In Depth Look at the Precious Metals Complex - 20th Apr 17
The Real Story of China’s Strong First-Quarter Growth - 20th Apr 17
3 Types Of Life-Changing Crisis That Make You Wish You Had Some Gold - 20th Apr 17
The Truth is a Dangerous Thing - 20th Apr 17
2 Choke Points That Threaten Oil Trade Between Persian Gulf And East Asia - 20th Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Where Silver Prices Are Heading

Commodities / Gold and Silver 2013 Aug 12, 2013 - 12:30 PM GMT

By: Money_Morning

Commodities

Silver prices today continue to wander aimlessly around the $20-an-ounce level as the white metal is buffeted by many of the same factors restraining the gold price. This drifting comes after a dramatic drop of 35% in the first half 2013.

As with gold, much of the drop is due to fears that the U.S. Federal Reserve will begin "tapering" purchases of bonds from its current $85 billion-a-month level. If this comes to pass, the financial markets currently believe this will reduce excess liquidity and therefore any possible inflationary fires.


Here's what investors watching today's silver price have to understand...

There are other factors at play in the silver market, of course, besides the Fed. In fact, most of these factors point to an upswing in silver prices going forward.

Here are a few reasons to bet on higher silver prices in 2013.

Silver Prices and Physical Demand

As with gold, there's strong global demand for the physical metal itself.

Just look at the sales of the U.S. Mint's 1 oz. American Silver Eagle coins. The Mint reported that, during the first half of this year, it sold 25 million Eagle coins, an increase of nearly 44% from 2012. In the first half of last year, the Mint sold about 17.3 million of the 1 oz. coins.

The trend continued in July with the Mint reporting sales of 4,406,500 ounces of Silver Eagle coins. That is up from June's 3,275,000 ounces and May's 2,278,000 ounces.

It looks as if the Mint is well on its way to a record year for sales of the Silver Eagles.

JPMorgan's Bet on Silver Prices

Next we turn to JPMorgan Chase (NYSE: JPM), the custodian of the iShares Silver Trust (NYSE: SLV), the largest silver exchange-traded fund.

The Wall Street bank is infamous among silver investors for the huge amount of shorts it has had in the marketplace for years. The bank was even sued with a lawsuit claiming it was manipulating the silver market. But the lawsuit failed.

Nevertheless, it is always interesting to see what JPM is up to in the silver market...

Early settlements in the July silver futures contract were eye-opening. It was reported that JPMorgan took delivery of approximately 7.4 million ounces of physical silver in COMEX warehouses for its own benefit.

And the pattern has continued with the August silver futures contract.

According to an article appearing on the TheStreet.com, JPMorgan had virtually no silver in its warehouse in May 2011. But now, the bank has accumulated about 37.7 million ounces of silver...

Again, I want to emphasize that the silver is for the firm's benefit, not clients or the SLV ETF.

A related note is the sharp drop in short positions on silver futures by commercial traders, otherwise known as Wall Street banks.

Short positions stood at nearly 260 million ounces of silver in February of this year. Now, according to Sprott, short positions have fallen to less than 20 million ounces. This is the lowest short position by commercial traders in more than 10 years.

How to Profit from Higher Silver Prices

For investors looking to join JPMorgan and hoard physical silver, as discussed earlier, silver coins are a great choice.

Another option is to own exchange-traded vehicles directly backed by silver bullion in vaults not controlled by JPM.

These funds can be bought on the stock exchange like a stock and include the ETFS Silver Trust (NYSEArca: SIVR) and the Sprott Physical Silver Trust (NYSEArca: PSLV).

Whichever way you decide to invest in silver, do it soon before the price slingshots to $60 an ounce - which, with these five silver price drivers, it could do in 2014.

Want to know what resources expert Rick Rule is doing with silver this year? Is Now a Good Time to Buy Silver? Rick Rule Weighs In

Source :http://moneymorning.com/2013/08/09/where-silver-prices-are-trading-today-and-whats-next/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife