There is quite an enigma going on here in the silver market. The price is around $23 an ounce, yet when I go out looking for actual silver to buy, funny enough…there isn’t any available. If you can find it, it was going for $28 minimum a few days ago.
Would someone care to clue me in on the secret here?
I’ve got two theories myself, one of which must triumph over the other:
1) Silver demand is enormous, and pricing has been artificially pushed way too low, probably through the paper markets. If you sell, you’re a sucker, because the well connected are front running the blood (they probably helped make) to rob you in broad daylight. More importantly, small time players are not invited to buy here – You’d better be dropping $10K allotments or piss off.
2) PM brokers are in deep. They ventured outside of the normal safety of the bid/ask spread, taking on larger than life long positions in a way that would make Jon Corzine blush, and now that pricing has collapsed they can’t afford to sell at the lower pricing, so they’re waiting out praying some put orders come along the line while yanking their own inventory off the market.
Either one of these could explain why, just a few months ago, I could literally shower myself with silver bullion, but now can’t find anything smaller than 100 ounce bars.
A healthy silver market should have lots of smaller denominations available for purchase. The lack of all small ounces for sale seems relevant. A large move will be coming, and I’m betting either silver prices make a total recovery, or you’re going to see a lot of these silver and gold prop shops that sprung up everywhere since 2009 get incinerated.If you enjoy the content at iBankCoin, please follow us on Twitter