1/6Being in the markets since 1992, I have seen a lot. One thing I have learned is that prices can be dictated by events “at the margin” versus overall supply/demand. Large players understand this and use the knowledge to push order flow or price action.
2/6Case in point, the 2008 silver crash. The following article was used to provide this information.
seekingalpha.com/article/94767-…
“the 2000 tonne increase in SLV inventory throughout 2008 amounted to about 7 percent of overall annual silver demand”
seekingalpha.com/article/94767-…
“the 2000 tonne increase in SLV inventory throughout 2008 amounted to about 7 percent of overall annual silver demand”
3/6One would ask how could the price drop from $21 to $12 over this time? The following data shows a flurry of redemptions in August of 2008 in SLV which heavily impacted the price. Other markets reacted similarly.
4/6Prices reacted to conditions at the margin at that moment versus the overall demand for that year. This is how the game is played.
5/6Fast forward to today, players shorting silver via the Comex can be pressed in a similar but opposite manner if buyers decide they see value in taking delivery and moving the metal off the Comex in a collective manner.
6/6Unlike the excitement earlier this year which saw retail premiums skyrocket for smaller coins and bars, this effort is focused more on the industrial bar form of silver which has more influence on the spot price.
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