Don't Let The Silver (And Gold) Bull Shake You Off

As one metals' dealer recently stated publicly, "As the paper price of silver falls, even though it is somewhat if not totally counterintuitive to what we would expect, the physical demand is stronger and stronger, as the price falls more and more."

Furthermore, he said recently, "On the COMEX, we're seeing as much silver being pulled off the exchange by the subsection called "Others" – sovereign nations, businesses, and wealthy people – during every recent delivery month as is usually the case in a typical year." (Typically, the categories involved in this activity would be the Speculators (hedge funds) vs. the Commercial Banks.)

Another eventual similarity? Now that BTC seems to be going mainstream, it has been announced that between PayPal and Square alone, all of the bitcoin "mined" in 2020 has been spoken for. Thus, anyone else who desires to own even a fractional "coin" must purchase it from someone who already owns it.

If bitcoin can rise and stay above $20,000, every current owner will be holding at a profit, with few being willing to part with their holdings until much higher prices are reached.

Now imagine this scenario for silver.

At some point going forward, investor demand, along with a few big industrial users - think EV manufacturers, electronics or solar panel producers - decide to "lay in" large quantities, or even buy outright a mining producer as Tesla has been looking to do with nickel.

What do you think might happen to silver prices – and premiums – if "all of the silver mined globally in a year has been spoken for"?

 

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