• 595 days Will The ECB Continue To Hike Rates?
  • 596 days Forbes: Aramco Remains Largest Company In The Middle East
  • 597 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 997 days Could Crypto Overtake Traditional Investment?
  • 1,002 days Americans Still Quitting Jobs At Record Pace
  • 1,004 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,007 days Is The Dollar Too Strong?
  • 1,007 days Big Tech Disappoints Investors on Earnings Calls
  • 1,008 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,010 days China Is Quietly Trying To Distance Itself From Russia
  • 1,010 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,014 days Crypto Investors Won Big In 2021
  • 1,014 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,015 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,017 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,018 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,021 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,022 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,022 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,024 days Are NFTs About To Take Over Gaming?
U.S Targets Russian Gold Stockpiles

U.S Targets Russian Gold Stockpiles

In its latest round of…

Is It Time To Pay Attention To Gold Miners?

Is It Time To Pay Attention To Gold Miners?

The invasion of Ukraine by…

Keith Weiner

Keith Weiner

Keith is founder of the Gold Standard Institute USA in Phoenix, Arizona, and CEO of precious metals fund manager Monetary Metals. He created DiamondWare, a…

Contact Author

  1. Home
  2. Commodities
  3. Precious Metals

The Silver Plunge Continues

Silver

A few days ago, I wrote about a big silver crash. The price dropped around 7.5%.

And the basis dropped from around 2% to 0.6%. At the end, we said:

“The key question is: what is the follow-through? If the price stays down and the basis goes back up, that will be a bearish signal. If the basis stays down, that means the silver market is markedly tighter at $24.50 than it was at $26.75.”

This brings us to yesterday’s silver dive.  Here’s the graph of the day’s action.

At the start of our graph, 2am (London time) the price is just a bit lower than at the end of the first crash day. $24.25. But we see the basis is up to 2.3%. That’s higher than it was at the beginning of the first crash day when the price was $26.75. 

Clearly, there was some buying of futures in the meantime. Perhaps speculators were betting on a quick spike in price.

Over the course of the day, the price drops to around $22.80. This is a drop of 6%. And the basis ends at around 1.5%. 

So, yes, there is a drop in basis. From a higher level than on the first crash day when the price was much higher. To a higher level than at the end of that day. And not that big a drop.

The selling was driven by futures, yet… yet… there was plenty of selling of metal too.

We are now $4 down in price, and the basis is not down very much. That means the abundance of silver to the market at $22.80 is not much less than it was at $26.75.

A price floor is expected when further selling the price down causes scarcity (and a price ceiling when further bidding the price up brings more and more metal to the market, i.e. abundance). Which hasn't happened yet. But we have some additional thoughts to share, so stay tuned.

By Keith Weiner via Monetary Metals

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment