Sunday, February 13, 2011

Silver Backwardation Hits Mainstream

The silver backwardation story is huge and is now mainstream.  Backwardation proves beyond a reasonable doubt that shortages are happening in silver. For the most part this story has only hit blogs and websites who specialize in the silver sector, now Reuters has picked up on this explosive story.

What we are seeing is extremely bullish for physical silver.  Bullion dealer GoldCore said:  "The extent of the backwardation in silver is unprecedented. It suggests that retail investment and industrial demand internationally is very robust and the small silver bullion market cannot cater to the level of demand for refined coin and bar product."

The article goes on to say: "Strong silver coin sales have more than offset outflow from the world's largest silver-backed exchange traded fund iShares Silver Trust (SLV), which notched its biggest one-month drop in its silver holdings in January."

The outflow from the SLV is bullish.  This means large investors are demanding delivery.  We are getting very close to the next leg up and it will be breath taking.

Full Reuters Article Here

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