Home 2021 The Case for $50oz Silver



Shortages of The Devil’s Metal suggest that $50oz silver is not too far off“– Paul Ebeling

  • Premiums on physical silver coins are at record highs and shortages are widespread internationally. This is only possible if silver futures are not priced for a sudden flood of monetary demand.
  • Monetary demand feeds on itself, as the higher the price goes for a monetary asset like silver, the higher the demand for it goes, risking a USD run.
  • Monetary demand for silver suddenly woke up in early February, causing shortages and rare backwardation in silver that we last saw in March 2020, September 2015, and February 2011.
  • After each of those backwardation frames, the paper price of silver spiked within months as arbitrageurs moved in to bridge the physical-paper gap.
  • This backwardation is most similar to February 2011, with silver nowhere near lows, and if history aligns, it suggests we are only months away from $50oz silver

Gold and Silver bugs are frustrated with the lack of movement on the silver price while Bitcoin goes over the Moon.

Demand for physical silver has spiked, and physical shortages at coin dealers are acute worldwide.

New American Silver Eagles from the US Mint are out of stock at even the largest US-based dealers and they are only selling in presales at near 50% premiums. A big London-based precious metals retailer, is out of silver coins.

This current backwardation, from a technical outlook, looks similar to the backwardation of February 2011 because silver was nowhere near a low in February 2011, and is it not now.

If silver is in backwardation now after only a brief correction from $30, this is very close to what happened 10 yrs ago when silver fell into backwardation after a very brief correction from $31 to $26. After that, silver rode a slingshot to just shy of $50.

We do not believe that the timing this time around will not be an exact repeat. History never repeats exactly, but it rhymes.

That said, I believe we are within months of silver reaching new all-time highs above $50oz.

*Backwardation: Backwardation is when the current price of an underlying asset is higher than prices trading in the futures market. It can occur as a result of a higher demand for an asset currently than the contracts maturing in the coming months through the futures market. Traders use backwardation to make a profit by selling short at the current price and buy at the lower futures price.

Have a healthy day, Keep the Faith!

You may also like


Your Trusted Source for Capital Markets & Related News

© 2023 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.