SILVER

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(UPDATED NIGHTLY SUNDAY THROUGH THURSDAY) 

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New York Closing Price (MARCH Contract)
   Friday,  December 29  (March contract) $12.935
   Thursday    (previous trading day) $12.940
Total No. of Open Contracts:
   Thursday (latest available) 101,390
   Prior Trading Day 101,102
Click here for a daily chart Click here for physical Silver fundamentals. Click here (scroll down the page) or here for 24 hour spot Silver price. Click here for silver futures trading quote.

Latest Commitment of Traders, December 19

Long Short
Large Speculators 42%  6%
Small Speculators 25%   8%
Industry Hedgers 23% 76%
Offsetting spreads   10%

 10% 

TOTAL

100%

100%
Click here for comparative report  

 

(COMMENTS BELOW ARE AS OF THE U.S. CLOSE ON THURSDAY, DECEMBER 28) 

TECHNICAL FORECAST: Short term indicators improve but longer term still continues to turn down.  Silver is influenced by the gold price which has recently been influenced by the Crude Oil price.

Summary:  Silver traded today (Thursday) in a relatively narrow range, mostly between $12.90 and $12.98 and settled little changed at $12.94, still not far from the lowest point in 2 months.  The price still remains below this year's high of near $15 in May, the highest point in 24 years.  Click for March contractClick here for 2 year chart.  Click here for nighttime futures trading quote. Click here for 24 hour spot silver price (scroll down the page).

The short term indicators improved today, but have been showing signs of turning down in the past 2 weeks.  The silver has been mostly moving with the other precious metals, gold and platinum, which are influenced by the U.S. Dollar and recently influenced by the Crude Oil price which is near the lowest price in a year.   (Visit the gold page for more details.)  

The New York silver market (Comex) experienced high volume 3 weeks ago.  High volume often (but not always) accompanies a change in trend - recent high volume may be indicating a change in the recent trend.  The sharp drop of the 2 weeks ago is suggesting the trend is now changing to the downside.

Although things may be changing with the recent decline in the crude oil price, up until recently there have been some similarities to the gold and silver market in 1979 and 1980 when silver soared to around $50 an ounce.  Now, as then, the oil price rose to levels not seen before.  There was uncertainty in the Middle East as there is now.  U.S. interest rates were rising then as inflation hit double digits although this is not the case now - interest rates have been rising in the past 2 years, but a relatively minor rise compared to 1980.  

These may have been factors in the rise in precious metals prices earlier in the year, but their influence may have run their course as precious metals have weakened in the past few months.  Crude Oil has declined sharply in the past month and U.S. interest rates have paused in their recent rise. The hope for silver rising sharply as it did in previous years has diminished sharply in recent weeks.

The precious metals are also influenced by the U.S. Dollar.  The U.S. Dollar Index (MARCH contract) closed today (Thursday) at 83.56 from 83.69 yesterday, still well below last November's high of 92.53.  (The Dollar Index is usually influenced by activity in the Euro which represents 57% of the index). Click here for a longer term chart of the Dollar.  (See our gold page for remarks about the Dollar.)

The latest Commitment of Traders report (as of December 19) shows that long speculators outnumber the shorts by almost 5 to one, the long speculators accounting for 67% of the market versus 14% short.  

Before the silver started to rise in the past 2 - 3  years, the average open interest was usually between 70,000 and 80,000 (compared to near 101 thousand now) down from the record high of 158,000 last November 2005). 



Silver Fundamentals - Supply and Demand:

For an easy picture of silver demand for the past 10 years (and other interesting information), click on the World Silver Institute, one of the premier industry sources (scroll down the page for more demand information).  (There has been a very noticeable change in demand for photographic use due to the use of digital cameras.)  

Following are supply and demand figures (in metric tons) for the past 6 years.  Most notable is that demand is down over 40 tonnes in the past 5 years, while supply has risen. 

Global Silver Supply:*

2000

2001

2002

2003

2004 2005
   
Mine Production 582.2 589.2 585.9 595.6 634.4 641.6
Global Government Sales*   78.1  87.2   71.3 82.6 61.7 68.0
Old Silver Scrap  179.2 182.7  184.9 191.6 181.1 187.3
Total Supply 839.5 859.1 842.1 869.8 877.2 896.9
= = = = = =
Global Silver Demand:*

2000

2001

2002

2003 2004 2005
Industrial Applications 377.1 338.1 342.4 351.2 367.1 409.3
Photography 219.5 213.9 205.3 196.1 181.0 164.8
Jewelry & Silverware 281.4 286.0 259.2 276.7 247.5 249.6
Coins & Medals 29.8 30.5 31.3 35.3 41.1 40.6
Total Demand 907.8 868.5 838.2 859.3 836.7 864.4

* Excludes producer hedging of future production (relatively minor); figures may be rounded off.

As a indication of the public's interest in silver now, following are the figures published by the U.S. Mint showing the amount of silver coins sold by the U.S. Mint (in no. of ounces):

No. of Ounces

1997

3,636,000

1998 4,320,000
1999 9,008,500
2000 9,133,000
2001 8,827,500
2002  10,475,500
2003  9,153,500
2004  9,617,000
2005 8,405,000
2006 (through June) 6,521,000

Judging from these figures, it appears there is no rush to buy silver coins in the U.S. 

(Average open interest in the past decade was mostly between 75,000 and 115,000 open contracts.

Click here for a long term look at Silver (Monthly Chart) (updated monthly) or click for the Silver Weekly Chart (updated weekly).

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*Nighttime quotes are delayed, usually 30 minutes.  (56k modems may take slightly longer.)

* Commitment of Traders percentage figures rounded off.

** Open interest figures refer to the previous day's trading since they are not released by the exchange until the following day.