Price Spike Dips

[aztecstargazer]

I have noticed a trend in the spot price of silver. It tends to have these major price dips. I know most of the PM community attributes this to "manipulation". I want to remove this option from consideration and see what are the market influences which could account for these drastic swings down, but not up. 

For example; Do primary silver miners stock pile their silver supply and sell it all in massive transactions, or do they sell it as orders become filled? 

Do primary silver producers enter into futures contracts, then fill orders, and what role could this affect spot price?

What role does silver recycling have on spot price?

[sixgun]

When the price of the metals moves the financial media look for a reason to give. Most of the time the reason(s) given are not why there was a move. For all intents and purposes the reason for the move is always manipulation of the paper market. Always.

Sales of silver are not an issue, the physical market will soak this up and not even draw breath. Silver is in chronic backwardation. That means futures sell cheaper than spot. This should not normally happen due to carry costs. The silver physical market is very tight. There are weeks of delays in large orders for bars at the Swiss refineries. 

[HawkHybrid]

 

his figures are a bit off but I agree with his general idea.

 

silver is just volatile. drops are more pronounced than

spikes because the driving force of stop loss selling is

stronger than that of momentum buying.

 

HH

[sixgun]

The Salivate Metal video attempts to indicate the relative values of various entities, commodities and assets. It shows silver is a very tiny proportion of total assets and currency. This is all it is useful for. There is not a plentiful supply of physical silver, he is just guessing that. There are weeks of delays in filling multi-tonne silver bars orders out of the Swiss refineries which is where the largest concentration of above ground silver on the planet exists. 

The price of gold and silver are dictated by the paper markets. This is how price is manipulated. On Friday 3rd November the Non Farm Payroll data for the US was released. It was a significant miss. Price of gold and silver rose on this news. Ninety minutes later the Non Manufacturing PMI (Purchasing Managers' Index) came out slightly better than predicted. No big deal especially after a poor NFP number but gold and silver were immediately smashed down. There was a MASSIVE selloff. This was not a spontaneous event, this was not just volatility. In the space of a 1 hour bar almost 900 tonnes of paper gold changed hands which is about 4 months of global mine production.  Almost the same amount changed hands on the previous NFP report. These amounts are ridiculous when you consider at the London afternoon price fix this was decided on the sale of 2.3 tonnes of physical gold. On Friday the banks and central planners were gunning for the 200 DMA (daily moving average) where they could have triggered large numbers of stop losses,. They were confronted by relatively tiny but in the real world, large physical buying and price moved up. The banks cannot cope with large amount of physical buying b/c this must be supplied by the bullion banks and there just aren't limitless amounts of immediately available metal especially in silver.

The movement down in price was solely to do with HFT selling from the banks such as the gold desk of the Bank of International Settlements. They triggered the selloff then turned buyers as speculators piled in selling and the banks took everything speculators sold, using it as short cover. If paper trades were done away with the event seen on Friday would be impossible.

On 7th July 2017 we saw the silver price collapse in a matter of seconds, the price moving down the best part of $2. This happened in the small hours of the morning. This move was probably due to the Bank of International Settlements. A large sell orders was placed where contracts were sold at any price, at a time when the market was very thin. These trades break the rules but nothing ever happens. The regulators turn a blind eye.

The actual physical silver market is very tight. Silver has been in backwardation for months. The Swiss refineries are running at flat out and there are big backlogs. If someone came into the silver market on the buy for physical silver with $1 billion they would explode the price, except the powers that should not be would just stop the trade, well if a single trade were attempted. i am aware a very large order for gold was blocked in the last few weeks, an order that would have exploded the gold price. The physical market will eventually overwhelm the paper market and there will be a price reset b/c you can only keep price down for as long as there is just enough silver to supply the important players like Apple and Samsung. If a significant numbers of buyers appeared demanding physical delivery this paper Ponzi scheme would be finished. i am aware of the potential for this in the next few months so i expect a price reset in the near future, perhaps even this year. 

[999magnum]

very interesting read

[jacksj1]

11 hours ago, sixgun said:

If a significant numbers of buyers appeared demanding physical delivery this paper Ponzi scheme would be finished. i am aware of the potential for this in the next few months so i expect a price reset in the near future, perhaps even this year.

 

Are you hinting at silver/gold backed cryptos sixgun ?  It's surely coming sooner or later. It's interesting to keep track of who is amassing physical silver and gold. 

We should also remember silver is still the most conductive element known to man. I'll be surprised if it doesn't see use in medium term emerging technologies that affects physical demand.

In the meantime until physical demand does change it's going to be a buyers market. Great time to be buying.

[sixgun]

3 minutes ago, jacksj1 said:

Are you hinting at silver backed cryptos sixgun ?  It's surely coming sooner or later. It's interesting to keep track of who is amassing physical silver and gold.

We should also remember silver is still the most conductive element known to man. I'll be surprised if it doesn't see use in medium term emerging technologies that affects physical demand.

Yes i am hinting at this. There is nothing public except for hints like this but it is close at hand and b/c of the amount of metal going into it, it will upset the apple cart.

[HyHy]

39 minutes ago, jacksj1 said:

 

Are you hinting at silver/gold backed cryptos sixgun ?  It's surely coming sooner or later. It's interesting to keep track of who is amassing physical silver and gold. 

We should also remember silver is still the most conductive element known to man. I'll be surprised if it doesn't see use in medium term emerging technologies that affects physical demand.

In the meantime until physical demand does change it's going to be a buyers market. Great time to be buying.

Well I assume that you meant electrical conductivity but from what I understand while working in the industry, no doubt silver has more superior electrical conductivity than copper but it is only around 6% more than copper while silver cost 65 times more than copper. Thus, it does not justify the cost efficiency using silver and I don't see there will be any significant surge in demand for silver anytime soon.

[HawkHybrid]

15 hours ago, sixgun said:

There is not a plentiful supply of physical silver, he is just guessing that. There are weeks of delays in filling multi-tonne silver bars orders out of the Swiss refineries which is where the largest concentration of above ground silver on the planet exists. 

 

there is no evidence that silver is in short supply. silver supply

could be a case of 'just in time' delivery. sellers of silver

would not choose to stock silver if it is costly to do so and

mine production is reliable enough for them to receive the

silver, refine it and then ship it out.

 

15 hours ago, sixgun said:

The actual physical silver market is very tight. Silver has been in backwardation for months. The Swiss refineries are running at flat out and there are big backlogs

compare this with intel selling processors. there is always

backwardation of current intel chips if there was an intel

futures market.(this years chips are always cheaper next

year, even like for like chips have gone down in price over

the years). so if intel runs flat out making chips does that

mean that there is a supply shortage of silicon?

 

4 hours ago, jacksj1 said:

We should also remember silver is still the most conductive element known to man. I'll be surprised if it doesn't see use in medium term emerging technologies that affects physical demand.

we already have this electrical and electronic demand.

by the silver institute figures it accounts for 2-300Moz

demand each year since 2007 and fluctuates a little up

and down ie no obvious up trend. by comparison silver

coins and bars investment have seen some of it's

largest demand figures in the last 4 years from the

2007-2016 figures. contrary to some claims it's this

coins and bars figure + solar that is making the majority

of the recent increase in demand for silver. but this is

unlike true consumption demand, buyers of coins and

bars are likely to sell at some point during their lifetime.

just as how a dealer/flipper would buy to sell on.

 

HH

[sixgun]

2 minutes ago, HawkHybrid said:

there is no evidence that silver is in short supply. silver supply could be a case of 'just in time' delivery. sellers of silver would not choose to stock silver if it is costly to do so and mine production is reliable enough for them to receive the silver, refine it and then ship it out.

You say silver supply COULD be....... So you are guessing.

16 minutes ago, HawkHybrid said:

compare this with intel selling processors. there is always backwardation of current intel chips if there was an intel futures market.(this years chips are always cheaper next year, even like for like chips have gone down in price over the years). so if intel runs flat out making chips does that mean that there is a supply shortage of silicon?

We are talking about physical silver not Intel chips.

Intel chips are never in backwardation or contango b/c there are no Intel chip futures contracts.

Last year's computer chip model is generally cheaper but there is no last year's model with physical metals.

If Intel is running flat out does that mean there is a supply shortage of silicon? i don't know, you tell me.

[HawkHybrid]

2 hours ago, sixgun said:

You say silver supply COULD be....... So you are guessing.

 

instead of being fixated on the 'facts' you believe to be true.

try being a little more open and see if any of my arguments

make any sense? I have no proof for my ideas but neither

do your arguments. my ideas are not any less credit worthy

than other ideas without proof, unless you can prove that

my ideas have flaws. (lies, lies and damn statistics, your

conclusion to what the figures say may not be the same as

mine?)

2 hours ago, sixgun said:

Intel chips are never in backwardation or contango b/c there are no Intel chip futures contracts.

in reality there is a kind of futures contract market,

it's called an end of year sale. it's just not as active

to warrant an exchange.

what is so different from intel chips market and the

silver market? intel takes a raw material(silicon) and

change it to something more desirable and then sell

it for as much as they can. silver take ore and turn it

into something more desirable and sell...

instead of claiming that the 2 markets are different

it would add weight to your argument if you could

point out where they are different and how that

difference strengthens what you believe to be true.

 

to buyers of silver for industry(silver consumed) last

years silver ounce is exactly the same(in practice) as

this years silver ounce. silver for industry accounts

for 40-50% of the silver demand.

 

HH 

[sixgun]

You assume and say i am just guessing but i don't post made up stuff when it comes to this. If i were guessing i would say. If i were talking about Intel chips i would have nothing to say b/c i have no worthwhile information on them.

i got my information about the Swiss refineries from someone who very recently went there on business to do with the upcoming gold and silver crypto currency. They were looking at sourcing many tonnes of silver. So it was very important to know exactly what the situation is. i am going to be a 'miner' of the gold and the silver cryptos. i will be  creating and selling these. This chap will be acting for me where necessary. i have my metal ready and as soon as i sell the crypto i will be reloading with more metal in a rinse and repeat fashion. To make this work, for those involved, 100's if not 1000's of tonnes will be needed. The key people involved have bought and sold wholesale precious metals for decades. They know what the position is and whether it is easier or harder to fill multi tonne orders as compared with previous years. There are contacts all over the world. A good deal of what you hear even from the Gold Council and the Silver Institutes is propaganda. 

[aztecstargazer]

I know I am a contrarian when it comes to precious metals. I just don't see a future for currencies, cryptos, being backed by PM's. I certainly don't see us going back to straight PM coinage as the money of use. 

If precious metals goes back to a commodity money, it will be gold, and only for governments in international trade. But here is the bad news in this event. If this happens, gold will be bought from the general public, not "confiscated", and made illegal to own again. I do see a future where it is illegal to own silver as an investment vehicle. The demand for silver as an industrial metal will become crucial for the ever growing tech sector. Not because it is being used as "money".

I hear a lot about how people won't comply with "confiscation". Confiscation is not likely to happen. Government buy-back is what is going to happen, if it happens at all.  I hear people say things like, "if you didn't comply with the gold buy-back, you would have seen your purchasing power go up dramatically". Um, no. You would have seen your purchasing power of gold go to zero. Since owing gold was then made illegal. What would have happened if owning gold was never made legal again? You would now be holding a worthless, illegal asset. 

I didn't want to talk about "manipulation". But here it is. If the central banks are in fact manipulating the price of silver, it is most likely for the following reason. If the price of silver was too high, the price of tech manufacturing would be too expensive, limiting the production, thus reducing the efficacy of development in said market. We need tech more than physical silver as money. And if they are "manipulating" the price of silver, you have been given a huge gift. That gift is predictability. They would have to keep silver low enough to be bought and used, while keeping it high enough for silver producers to remain open and profitable.  

[breaktwister]

17 hours ago, sixgun said:

 i am aware a very large order for gold was blocked in the last few weeks, an order that would have exploded the gold price.

can you elaborate on this "order blocking".  Was this a Comex order?  Do they ever block large sell orders cos it certainly doesn't seem like it. 

[sixgun]

No it wasn't Comex. Little physical actually gets delivered through the Comex. The issue is actually getting your hands on and carrying off physical precious metals. For every seller on the Comex there is a buyer, so a big sell order means entities have bought the contracts on the other side. The limits are generally margin requirements. When you have a 'printing press' at your back there is no limit to how much central planners could theoretically sell, except there are always limits.

No i can't elaborate further. There will be more information coming out soon, potentially this week. i fully expect this to roll out and be trading before the end of the year.

[HawkHybrid]

what I'm trying to say is the data you have on the swiss

refineries could well be fact. the conclusion you draw

from the data given is far from fact. if bakery bread went

on sale and I then put in a large order and was told it

would take a day to fill the order. can I then call it price

suppression due to manipulation(sales price) and then

short supply of flour due to limited stock available?

 

20 minutes ago, sixgun said:

A good deal of what you hear even from the Gold Council and the Silver Institutes is propaganda. 

which parts are untrue? admittedly the figures don't

quite add up. multi year physical silver deficit without

a source of reserve to draw from. maybe the figures

are not complete?(illegal silver mining?)

 

the comex spot price is just a guide for buyers and

sellers of silver. there are plenty of private sales for

physical silver bullion that are done at different prices

to spot. buying and selling physical silver bullion is

dependant on local demand and supply.

 

HH

[sixgun]

1 hour ago, HawkHybrid said:

what I'm trying to say is the data you have on the swiss refineries could well be fact. the conclusion you draw from the data given is far from fact. if bakery bread went on sale and I then put in a large order and was told it would take a day to fill the order. can I then call it price suppression due to manipulation(sales price) and then short supply of flour due to limited stock available?

The conclusions drawn is that Swiss refineries cannot get hold of the physical to keep up with orders - hence the delays. They are going flat out melting down bars out of the US and London and sending them to Asia - this is the one way drawn down on Western precious metals. 

1 hour ago, HawkHybrid said:

which parts are untrue? admittedly the figures don't quite add up. multi year physical silver deficit without a source of reserve to draw from. maybe the figures are not complete?(illegal silver mining?)

Many of the flows of metal are not official. Just as examples, the 100's of tonnes of gold smuggled into India officially do not occur - so it has been said demand in down in India when in reality it is as strong as ever. China does not reveal how much gold is held, the real figures are much higher than the official ones. The US has officially not sold a single ounces in decades and yet many tonnes of refined gold leave the country. 

1 hour ago, HawkHybrid said:

the comex spot price is just a guide for buyers and sellers of silver. there are plenty of private sales for physical silver bullion that are done at different prices to spot. buying and selling physical silver bullion is dependant on local demand and supply.

The spot price is the XAU/USD or XAG/USD cash price - the gold and silver currency prices. The Comex prices are the futures prices for the 100oz gold and 5000oz silver lots in the various futures contracts. The Comex price is not a guide, it is a contractual price for future delivery but there is nothing to stop someone using it as a guide. There are plenty of private sales indeed b/c you cannot get hold of large amounts of metal at spot price all prices have to be negotiated.