The Case For Comex Silver Shortage

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#1 Wed, Aug 24, 2011 - 10:49pm
Silver_Watchdog
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The Case For Comex Silver Shortage

The case for Comex explained in one chart https://i54.tinypic.com/sotzds.png

If silver stockpiles continue to be withdrawn at the current annual growth rate, Comex could be drained by the end of 2012. As for the Treasury and U.S. Mint holdings, the last audit in 2010 showed roughly 7 million ounces in deep storage.

There isn't much silver left.

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Edited by: Silver_Watchdog on Nov 8, 2014 - 5:08am
Fri, Aug 26, 2011 - 1:19am
Stormdancer
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Got a link to that audit you

Got a link to that audit you can share?

A mountain tree, if it would see, the far horizon and the stars May never know a sheltered place, nor grow symmetrical in grace Such trees must battle doggedly, the blasts and bear the scars. - by Marion Loyal Thompson
Fri, Aug 26, 2011 - 1:50pm (Reply to #2)
Silver_Watchdog
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PDF is here

Sat, Aug 27, 2011 - 6:50pm
Stormdancer
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Thanks SW.  I was going to

Thanks SW. I was going to say that 7 million ounces is not a huge working stock for a 30+ million ounce silver eagle program. Glad I didn't :) The audit specifically states that this is not mint working stock. It ain't a lot of silver no matter what it's being stored for.

A mountain tree, if it would see, the far horizon and the stars May never know a sheltered place, nor grow symmetrical in grace Such trees must battle doggedly, the blasts and bear the scars. - by Marion Loyal Thompson
Sun, Aug 28, 2011 - 5:20pm
Silver_Watchdog
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The US Mint has already

The US Mint has already stated (during the Ron Paul hearing), that they expect silver sales to hit 48,0000 oz by the end of this year while the planned issuance is around 45,000. They do not have the fabrication capacity to mint more coins; if seasonal demand continues along with further investment demand, there WILL be a shortage.

The problem for all minting companies is the velocity of sales that over-rides their fabrication capacity. The following chart shows what happened the last two years when shortages started to be reported. https://i55.tinypic.com/34g5ze0.jpg

I fully expect to see shortages some time in the next couple of months and also some type of event in the ETFs by early 2012. 

Sun, Aug 28, 2011 - 5:42pm
ScottJ
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Very nice graph, a trend

Very nice graph, a trend confirming the demand of physical silver is increasing (at least at the mint). 

Me thinks there is going to be some very interesting days in the silver market ahead.

Take everything in moderation, including moderation~
Sun, Aug 28, 2011 - 8:55pm (Reply to #6)
Silver_Watchdog
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I wouldn't limit it to just

I wouldn't limit it to just the mint rather consider it global demand. Indian banks now offer silver bars and coins at selected bank branches and it's becoming a trending gift idea. India has roughly 10 million marriages a year—do the math.

Sun, Aug 28, 2011 - 9:02pm
Silver_Watchdog
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I should add this chart as an

I should add this chart as an indicator for what MCX's September deliveries may be like.

Sun, Aug 28, 2011 - 9:39pm
Silver_Watchdog
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Lastly the grand daddy chart

Lastly the grand daddy chart that reveals it all. Notice the SIFO rates have completely inverted in one year and how the SIFO rates dropped 'before' the price raid in May. There was a massive squeeze on physical deliveries.

This won't go on for much longer...

Sun, Aug 28, 2011 - 10:38pm
Silver_Watchdog
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Ratio chart showing U.S. Mint

Ratio chart showing U.S. Mint silver sales to Comex physical. If demand continues at this rate, the ratio should be at 4-6:1 by next summer. Some will argue that Comex represents a small amount of silver stockpiles (I agree) but what concerns me is the falling ratio. If silver imports are falling due to Asian consumption, I'd want to be a physical accumulator, not a paper speculator.

Sat, Sep 17, 2011 - 10:32am
Silver_Watchdog
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1oz Silver vs Fractional Gold Coins

Here's another chart showing how silver's trend has surpassed fractional gold coin sales. 

https://i55.tinypic.com/15pflug.png

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Fri, Sep 30, 2011 - 12:24am
BUDDHA PRINCESS
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Sales Report out of the U.S. Mint

 They sold an additional 7,000 ounces of gold eagles...2,000 one-ounce 24K gold buffaloes...and another 300,000 silver eagles. Month-to-date sales in gold eagles total 82,000 ounces...12,000 one-ounce 24K gold buffaloes...and a whopping 3,725,500 silver eagles...making September the second largest sales month for silver eagles in all of 2011...and we've got three more reporting days to go in the month.

Fri, Sep 30, 2011 - 7:29pm
Silver_Watchdog
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Make that 4,460,500 oz for

Make that 4,460,500 oz for September silver sales. That puts the year-to-date silver sales to 33,411,500 oz. The mint only planned to issue an estimate or 40 million 1 oz silver coins this year. Do the math and you'll see how a shortage is near.

Sat, Oct 1, 2011 - 10:45pm (Reply to #13)
Captain Benny
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2012 is coming!

The mint will be shifting to 2012 SAEs soon. It wouldn't suprise me if the 2012 year will be a limited production run due to supply issues as more bullion gets bought up in other more affordable forms...

Sat, Oct 1, 2011 - 11:30pm
Silver_Watchdog
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The Mint don't have shit

The Mint don't have shit left.. Last audit report showed 7 million ounces in deep storage for 2009 and 2010. Regardless even if they have some, they still don't have the fabrication capacity to meet demand. That goes for the Perth and Royal Canadian Mint too.

There's going to be a blowback very soon.

https://www.scribd.com/doc/57852070/Gold-Silver-Audit-2010

Tue, Oct 4, 2011 - 3:20pm
Silver_Watchdog
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There are silver shortages

There are silver shortages being reported in Asia.

MCX India Silver Stockpiles Down 76% in September 

Four recent quotes from UBS metals strategist Edel Tully who today said silver has "supply issues."


Sept 27 2011 “We think silver is in danger of leeching further,”

Sept 28 2011 “We would stay out of the silver market at the moment,” Edel Tully, a London-based analyst at UBS AG

Oct 3 2011 “Surprisingly gold and silver has been rallying in a very thin market,”

Oct 4 2011 "This (silver demand) is causing supply issues, with airline capacity being stretched. And premiums are unsurprisingly on the rise,"

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