First Majestic Silver Slashes Premiums

Looks like First Majestic Silver is finally giving in on lower silver prices and just slashed its silver bullion sales price from $20/ounce to $17.5/ounce. This tells me that silver sales aren’t as strong as the media is telling us.

Premiums have fallen from 35% to 20%.

 

As you can see below, First Majestic Silver expects that silver prices will stay around the $15/ounce level.

Junk Silver Premium: 42%

 Rising higher…

 

Update on silver premiums

Just a small update. It’s amazing how silver can keep going down with record high short positions, while the premiums are going through the roof, especially junk silver. U.S. Mint halted sale of silver eagles.

 

Junk silver premium at new high APMEX

I kid you not, junk silver premiums are showing that physical silver is in shortage.

30% premium now, the highest since I monitored it. If this quickly goes to 50%, would you say the bottom is in?

http://www.apmex.com/product/24/90-silver-coins-1-000-face-value-bag

Gold/Silver Premiums Update

On the premium front in precious metals we see that the trend is still going up and I’m pleased to say that silver is a good buy at this time. Here is why.

Silver premiums are going to hit new highs in the coming weeks, both at APMEX, silver miners and Shanghai.

 

 

There is a huge chance of a short squeeze in silver next week.

The gold front is a bit less interesting. No short squeezes on the horizon and the premiums are flat, nothing special has changed.

 

APMEX Silver Premiums Soar

What could happen in 3 weeks of holiday? Apmex premiums can spike from 20% to 30%. Junk silver spike from 5% to 20%. I went to Apmex site and they only have 2 bags of junk silver left. That’s because the U.S. Mint sold out of silver.

But this is only temporary, as Shanghai silver premiums are showing a decline from 14% to 7%.

Shanghai gold premiums even went negative.

Gold premiums on Apmex are pretty normal and even declined a bit.

First Majestic Silver Decreases Silver Premium For First Time In A Year

First Majestic Silver, after one year of waiting, has finally thrown in the towel and dropped their silver prices from $23/ounce to $20/ounce, a 13% drop. I wonder if this has anything to do with the end of QE announcement last night…

This is also not consistent with what they said a few weeks ago, namely betting on a higher silver price in the fourth quarter, thus retaining a large amount of their silver inventory stock for the sake of selling it at a higher price in the future.

In fact, a week ago the CEO encouraged other silver miners to halt their silver sales, how will lower premiums accomplish that goal?

https://youtube.googleapis.com/v/4cIpAL8UVvE&source=uds

Gold/Silver Update

I wouldn’t worry too much about the drop in price of precious metals.

If you look at the premiums, you can see easily that the dealers aren’t dropping their prices even though the paper price is dropping.

Surprisingly, the gold/silver miners did drop. I see this as a buying opportunity.

Shorters are at their highs, but I see that gold shorts have peaked. 

Large commercials have started to lean to the long side. I’d say we are bottom fishing.

Gold and Silver premium update

Small update on premiums. I see very good news for precious metals investors.

Even though silver dropped to its low of $18.7/ounce, miners have not dropped prices of silver bullion. The result is a record high premium to get your hands on physical silver. It’s amazing that these silver producers won’t drop their selling price. For months we have had a selling price of $23/ounce.

APMEX silver premiums are steady.

Junk silver premium is bottoming out.

Shanghai silver premiums are soaring to almost 13%. If this goes to 20% (above the 17% VAT tax) we will see arbitrage opportunities.

Remember, this 13% premium is the highest since 2008.

BullionStar.com

While Shanghai gold premiums are zero, but rising! That means China could start raiding the GLD again and we see that GLD reported very low stock numbers recently.

APMEX gold premiums are up again.

Shanghai Silver Inventory Vs. Shanghai Silver Premium

There is a negative correlation between the Shanghai Silver Inventory and Shanghai Silver Premium to London Silver Spot Price.

Whenever the Shanghai silver inventory drops, this indicates that China is running low on silver, which means it will need to pay more money to get its hands on silver from the Western market, resulting in higher premiums between Shanghai and London.

For example, the peak in inventory in March 2014 (Chart 1) coincided with the bottom in silver premiums (Chart 2: blue line). The record low inventory in September 2014 coincided with the record high 11% silver premium.

Chart 1: Shanghai Silver Inventory

Chart 2: Shanghai Silver Premium

If you want to monitor the weekly inventory of silver at the Shanghai Exchange, you can go here.

Click on “weekly inventory” (by the way, these are real physical inventories, not imaginary inventories from the LBMA).

For example: 5-Sep-2014: Inventory of silver is 93304 kg.