CFTC probes silver market
jamakin
Posts: 1,055
Saw this interesting artical in the WSJ
probe into silver market
The most interesting nugget from the artical: "Official data from the CFTC showed that two U.S. banks had increased short positions in the silver futures market between July and August by 450% and controlled 25% of the total open interest."
In my opinion the fact that there exisits such a big lingering disconnect between the price of real physical silver and the spot price leads me to belive some amount of monkey business when on.
probe into silver market
The most interesting nugget from the artical: "Official data from the CFTC showed that two U.S. banks had increased short positions in the silver futures market between July and August by 450% and controlled 25% of the total open interest."
In my opinion the fact that there exisits such a big lingering disconnect between the price of real physical silver and the spot price leads me to belive some amount of monkey business when on.
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<< <i>Saw this interesting artical in the WSJ
probe into silver market
The most interesting nugget from the artical: "Official data from the CFTC showed that two U.S. banks had increased short positions in the silver futures market between July and August by 450% and controlled 25% of the total open interest."
In my opinion the fact that there exisits such a big lingering disconnect between the price of real physical silver and the spot price leads me to belive some amount of monkey business when on. >>
I dont get it. why do you think there is such a big disconnect in silver
prices compared to spot? just because sellers who own the metal
know people want it really bad.. why shouldn't they mark it up accordingly for the demand?
place your order for 500+ ounces at sunshine and wait till it is delivered. problem solved. i am sure they are only asking a buck or
so over spot. lock in your price and done.
many places are back ordered and have to fill earlier orders first.
simple as that.
or is this not what you meant?
Definition of spot price:
The spot price or spot rate of a commodity, a security or a currency is the price that is quoted for immediate (spot) settlement (payment and delivery). Spot settlement is normally one or two business days from trade date. This is in contrast with the forward price established in a forward contract or futures contract, where contract terms (price) are set now, but delivery and payment will occur at a future date.
I should be able to buy and take delivery not buy and wait for them to catch up on deliveries. If demand is large enough that delivery is delayed spot would rise and not tank like it did.
That is the disconnect I am talking about. Given the drop in price there should be a sea of existing silver that should be flooding the market. Instead real silver supply is tight. One can sell silver above spot with ease. Only the paper moved.
you just cannot expect 10 oz bars or even 100 oz bars.
you are going to get 1000+ oz bars that are quite raw looking and
probably have a minimum order that none of us can afford.
if you are looking for that kind of order... i think you can have it within
a few days.
if you want 1 oz bars.. you need to wait. they can only make them
as fast as they can.
that "spot price for delivery in a few days" is basically big boy talk.
us little chumps have to sweat for it.
give ohio precious metals a call and place your 5000 oz order. i am sure they can swing it. ;-)
apmex right now:
1051.33 oz Silver Bar .999 Fine - (Peñoles)
Only $0.35 cents per ounce over spot. Peñoles (full name in Spanish Industrias Peñoles, S.A.B. de C.V.), based in Mexico City, Me... More
only 14,500.
by cutting out a middle man like APMEX you can have it even closer
to spot. but be prepared for a very large order.
"We have investigated and everything is fine and dandy."
There is a much more limited market for the 1,000oz bars in comparison to any of the smaller quantities. You can buy $1,000,000 properties on ebay, why is there not a single 1,000oz bar of silver on there? It's not a popular option.
<< <i>In my opinion the fact that there exisits such a big lingering disconnect between the price of real physical silver and the spot price leads me to belive some amount of monkey business when on. >>
The spot price is a wholesale price and is not the price at which dealers will sell small retail quantities. You are not seeing a disconnect between “real physical silver” and the spot price, you are seeing a price spread between the retail price of small lots and the wholesale (spot) price. The recent increase in price disparity is at least in part due to the volatility of the spot price. When the price is volatile, the dealers face increasing risk of holding inventory, so they reduce their inventory and increase their spread (mark-up) to account for the added risk. They also have to add on hedging costs if they choose to hedge. But even if the local dealer does not hedge, the dealer’s wholesale supplier will, and the hedge cost is passed on – and add in as well fact the COMEX increased the margin on silver futures, which in turn increases the capital cost of maintaining a hedge. So all of that gets passed down to you. In addition, as retail dealers order less inventory the big processors produce few small bars, which creates a back-order situation when customers decide to buy at the lower price.
Of course that does not answer whether there was manipulation going on in the futures market, which is a whole different issue.
CG
Stricktly speaking from my experience I have bought much of my silver at or below spot either here on the bst or on ebay over the past four years.
That said the supply of that silver at spot( forget about below) has completely disappeared.
As for dealer pricing , the ones I bought from had a usual mark up of about $1.50 above spot for for small orders. APMEX was very good at staying in that range. Now the are selling $4 above spot and buying for $2 over.
I understand it takes time for the market to adjust but given the severe drop in price we should be swimming in cheap silver.
i would sort of argue the opposite.
when silver goes up people are letting silver go for spot because
the paid much less then the current spot.
the reverse has happened now. you have people who bought at
15-20 in the recent year who are hesitant to sell at a loss. they
simply hold onto it and hope for better days.
emotionally it will take time for them to let it go at spot prices.
but eventually they will!
when silver goes up, easy selling.
when silver goes down, people do not want to take a loss and
things dry up.
how long will we have to wait? i say a year.
My point is that suppose there IS some shenanigans going on, is there enough evidence out there for us "mere mortals" to be able to determine that something funny is actually going on. Or is it just that we're only seeing the details in a tiny corner of a larger market (i.e., retail). If there's no conspiracy, what sort of evidence would need to be presented to quiet the doubters?
I know some conspiracy theorists who think the Apollo missions were faked, etc. Their minds are made up, and they don't care WHAT evidence is presented. They start with a conclusion (Apollo missions are faked; silver and/or gold markets are being manipulated by an evil cabal) and reject any evidence that doesn't support their argument. And if there's evidence that requires thought or research, FORGET IT. It's easier to live with a false belief than learn the truth.
The CFTC issued a report back in May saying they found no evidence of manipulation. Now it's possible that since then, the bad guys have been doing bad things, but people have been complaining about this for more than just the last few months.
And anyway, to put it in perspective, even if there IS market manipulation, it's insignificant compared to all the other financial stuff that's going on.
<< <i>Will someone please explain the constant "conspiracy theory" mindset? Does anyone here have some sort of deep insight into the macroeconomic ebb and flow of the precious metals commodity markets?
My point is that suppose there IS some shenanigans going on, is there enough evidence out there for us "mere mortals" to be able to determine that something funny is actually going on. Or is it just that we're only seeing the details in a tiny corner of a larger market (i.e., retail). If there's no conspiracy, what sort of evidence would need to be presented to quiet the doubters?
I know some conspiracy theorists who think the Apollo missions were faked, etc. Their minds are made up, and they don't care WHAT evidence is presented. They start with a conclusion (Apollo missions are faked; silver and/or gold markets are being manipulated by an evil cabal) and reject any evidence that doesn't support their argument. And if there's evidence that requires thought or research, FORGET IT. It's easier to live with a false belief than learn the truth.
The CFTC issued a report back in May saying they found no evidence of manipulation. Now it's possible that since then, the bad guys have been doing bad things, but people have been complaining about this for more than just the last few months.
And anyway, to put it in perspective, even if there IS market manipulation, it's insignificant compared to all the other financial stuff that's going on. >>
Here is one example of the thought process behind the silver price manipulation. Merely the first one I located not necessarily the deepest report but this might give you a general idea what drives the thinking. It is not unheard of for people to work behind the scenes to manipulate situations to their advantage.
The government is known to involve itself in price controls on certain commodities when the need presents itself. Just look at corn for instance, there have been farmers in the past that were paid to not grow corn to keep the price from falling too low. Why would anyone think that precious metals would somehow be off the table for any type of price manipulation?
Exactly!
And considering that gold has been acting as the inverse to the US dollar for years, it would be far easier to produce changes in the USD via the tiny gold markets than to do it in the Forex market which is 100X larger. More bang for the buck in manipulating paper gold prices. And best of all, no political body in the world would care one iota that you are doing it, whether legally (shorting) or illegally (naked shorting).
roadrunner
And while gold has been moving inversely to the dollar, it's the movement of the dollar (IMHO) that causes gold to move, not the other way around. Oil moves the dollar, but I don't think gold does anymore.
www.AlanBestBuys.com
www.VegasBestBuys.com
<< <i>the silver market has been faced with shenanigans for a couple of eyars now.... for proof look at the gold to silver ratio. traditionally at 17 to 1 or 20 to 1 the ratio has been about 55 to 1. someone or something has been depressing silver. and a few big short positions could do it. >>
And now the ratio is about 75:1.
Regards, John
1947-P & D; 1948-D; 1949-P & S; 1950-D & S; and 1952-S.
Any help locating any of these OBW rolls would be gratefully appreciated!
SEC oversight really depends on who is doing what to whom. The SEC has been pretty much discredited at this point. It seems that in the financial world, first blood always wins, and the repercussions are borne by everyone else. SEC oversight...........pshawwwwwwwww.
I knew it would happen.
<< <i>
<< <i>the silver market has been faced with shenanigans for a couple of eyars now.... for proof look at the gold to silver ratio. traditionally at 17 to 1 or 20 to 1 the ratio has been about 55 to 1. someone or something has been depressing silver. and a few big short positions could do it. >>
And now the ratio is about 75:1.
Regards, John >>
I guess that it has been generally assumed by the regular public that gold is more valuable then silver. Not sure exactly were that assumption comes from, wether they think gold is "prettier" or rarer or harder to get, who knows. This 75:1 ratio does seem to be completely absurd though. Even though the average Joe feels gold is better then silver, even he would be surprised when he found out it was 75 times better. Just think about it, gold is less then 1/4 of the way away from $1,000 per 1oz.. and silver is slightly above $11 ?
The jewelry industry has good examples of what the metals can be sold for. Compare 2 plain rings, one of 24k gold and the other of pure silver, and they both weighed 1 oz. Realistically the silver ring would be priced at about $20 or less. Would the gold ring be priced at $1500 keeping with the 75:1 ratio? No it wouldn't. The gold ring would be priced at about $500 or less making the ratio more like 20:1.
Also for anyone that thinks there is no manipulation, do you read any of Ted Butler's stuff? Is he just a cook or does he have conflicts of interest or what?
<< <i>The jewelry industry has good examples of what the metals can be sold for. Compare 2 plain rings, one of 24k gold and the other of pure silver, and they both weighed 1 oz. Realistically the silver ring would be priced at about $20 or less. Would the gold ring be priced at $1500 keeping with the 75:1 ratio? No it wouldn't. The gold ring would be priced at about $500 or less making the ratio more like 20:1. >>
Where can I buy a 1 oz 24K gold ring for $500?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>
<< <i>The jewelry industry has good examples of what the metals can be sold for. Compare 2 plain rings, one of 24k gold and the other of pure silver, and they both weighed 1 oz. Realistically the silver ring would be priced at about $20 or less. Would the gold ring be priced at $1500 keeping with the 75:1 ratio? No it wouldn't. The gold ring would be priced at about $500 or less making the ratio more like 20:1. >>
Where can I buy a 1 oz 24K gold ring for $500? >>
bah ya I confused myself on that one.
<< <i>
And considering that gold has been acting as the inverse to the US dollar for years, it would be far easier to produce changes in the USD via the tiny gold markets than to do it in the Forex market which is 100X larger.
roadrunner >>
This is essentially what the larger banks have done to kill companies, including other banks. The SEC looks the other way since they are only doing what Paulson and the FED want. The SEC only looks at what the FED or Paulson tells them to look at. Note that no one cared about the Hunts and illegal actions were taken against them. The playing field is no different today if other than more stacked against the metal bulls. Say it ain't so Mr. Coxe!
Odd isn't that the SEC or Commodities Trading Commission has never found a single instance of improper trading in the gold sector. I guess that means that such a thing doesn't exist.
Too bad O.J. just got nabbed as Mr. Coxe was going to use him to help find the culprit in the silver manipulations.
roadrunner
as well as the probability of such happening.
The Government knew and chose to do nothing
for a very long time.
Camelot