why is silver going up?

I last saw $11/oz for september projected spot price so why is it about to break $14/oz is it still expected to drop or is it going up to the "record prices" ppl are talking about?

 

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When the stock market goes down Commodities go up, Silver and gold are commodities, and Obama isn't helping the stock market (This is me being nice about him) So people are investing in silver and gold, but be careful because these people that are doing know this, and much more than I do so they will get in when silver/gold is cheap and sell before it drops

 

As of Friday, I believe September silver futures were $13.875 compared to a spot price of $13.87. I don't know where the $11 comes from.

But silver has been in a volitile uptrend for several years. Even with prices in the mid-teens, most silver mines seem to be running at or close to a loss, so over the longer term either the price will have to rise or the world will have to do without silver. It is also interesting that there are only about 1billion ounces of silver estimated to be above ground in the world. There are about 2billion ounces of gold. Normally, the commodity that is more scarce has a higher price. It's something to think about.

 

TO ANYONE: where are you getting the futures spot prices and does anyone see the futures prices dropping at all?

 

kitco.com and not in the very long term.

 

Take your pick from many online sources that report the commodities futures, here are a few to get the idea, others may have their preferred sites/indexes they refer to...

WSJ *
Bloomberg
Daily Futures
Commodities Futures Charts & Quotes

What are futures?

 

Also keep in mind that the futures market is largely a cash market. Very little physical metal changes hands compared to total trading volume. So the silver price in the futures market is almost always lower than the actual value of coin silver. If all futures contracts were required to be settled in delivery of silver by law, the price would most likely be much much higher.

 

so is all the futures just based on a whim by people or is their actual legitimate information that proves the opinion? not just mere speculation that one may or may not use to try and influence the prices?

 

The original purpose of the futures market was to enable producers and consumers of physical silver to hedge their needs in the future. It was a price discovery process for silver. In more recent times, the volume of trading by speculators on both the long and short side has dwarfed the legitimate hedgers. In my opinion, the result is that the price of silver established by the futures market has lost some of its connection with the actual physical market. The fact that one ounce silver coins exceed the spot price is evidence that the price of physical silver exceeds the price of paper silver.

 

silver industrial uses

Also what can help drive silver up faster than gold is the fact that silver is consumed in industrial uses. This silver cannot be recovered, or at least is impractical to recover. Therefore should the consumption be greater than the amount mined the supply will drop off.

 

Howdy,

Cloudsweeper is spot on as the disjoint between the Paper price of silver (gold) and the Street price of real bullion has diverged greatly. It was enormous this past summer/fall and actually resulted in spot shortages of supply for the real stuff. Note that this was while the paper price was on the low side.

The paper price is controlled by hedge funds and speculators and a LOT of naked shorting. This is when you sell futures that you don't own. Most of last year there was more Paper silver than the total of all the silver ever mined on the planet.

rono

 

No new mines and demand for silver is up. so is the $$$

 

Howdy,

Right now we're seeing a surge in commodity prices due to the "anticipated economic recovery'. Silver is an industrial commodity much more than gold and is being impacted more. I say this because over the past couple of months, we've also been seeing the Noble Sisters (platinum and palladium) being strong and they too are industrial metals. We're seeing it in copper, nickel, zinc, etc.

If anything, gold's being dragged along for the ride.

Now this is current.

Over the longer run, many of us believe that silver is undervalued relative to gold and will out perform. Historically, the gold/silver ratio has been between 1-15 and 1-20. Right now it's 1-68. Back in 1980 at the peak, gold topped out at $850 and silver at $50 (1-17).

So, while I'm a coin collector and also a gold and silver coin collector, I'm a bullion hoarder and precious metals speculator AND I overweight silver relative to gold.

peace,

rono

 

Well, that would be an exaggeration. For example, Silver Standard opened a new mine this year at Pirquitas in Argentina that is producing 6 million ounces per year. Coeur d'Alene opened a new mine at Palmarejo, Mexico this year that is producing 20 million ounces per year. There are others. It is important to stay grounded in reality and not let the excitement over silver cloud your judgement. The important thing is that normal industrial demand plus growing investment demand has a high probability of driving up the price of silver over the next several years.

 

Here's a link to an article I found that may shed some light.

http://www.marketwatch.com/story/new-etf-could-further-boost-silver-2009-07-27?link=kiosk

 

I'm not sure where your figures came from, but according to The Silver Institute, www.silverinstitute.org, the world mine production of silver just for the year of 2008 was in excess of 680 million ounces, with total mine production in the last 10 years of over 6 Billion ounces. Unless the vast majority of this production has been lost or re-buried, I think the above-ground silver is more like 25-50 billion ounces.

 

For most of the past 20 years, more silver was consumed by industry annually than mined, so inventory numbers have actually decreased. The 1billion number is an estimate from Ted Butler, who is a silver analyst. It is an estimate of the amount of silver in deliverable form. If you can get women around the world to sell their jewelry for melt value, there would probably be more.

 

1 billion supply

I also have seen the same figure as cloudsweeper. 1 billion dollars would buy all the silver in some New York holding vault. I will try to find the link rugrat.

 

This link contains information about the amount of silver in the New York Commodity Exchange warehouses according to Dr. Larry Bates http://www.christianinfocenter.com/ at the sight go into the Finances and Economics section, then the Acquiring Precious metals tab. Scroll down a little to the Silver section.:thumb:

 

because it is too cheap.