The sudden drop in lease rate is a bit concerning…
Lease rate
Quick Update: Gold/Silver Lease Rates
I cautioned that the silver price could plunge due to silver lease rates going down in this post on 19th August, 2012.
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Chart 1: Silver Lease Rate |
The same is happening with gold lease rates.
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Chart 2: Gold Lease Rate |
Silver Lease Rates Jump To One Year High (and then fall back to where they were previously)
Recently, the long term silver (PSLV) (SLV) lease rates jumped to a one year high since May 2011 (Chart 1).
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Chart 1: Silver Lease Rates |
I already wrote about gold lease rates in this previous article, pointing out that high lease rates are an omen of easing price manipulation by bullion banks like J.P. Morgan and HSBC. When silver lease rates go up, it means that we can expect an increase in the silver price in the next few months.
It has to be said that silver lease rates are still below their all time high of 2% in 2008, but it’s especially the sharpness of the increase that’s notable.
The expiry date for the CME May silver options is 25 April 2011. Mostly, the price movements near options expiry dates are in declining mode just before the options expiry. This way call options are made worthless. After the expiry date, we could have a huge boost in silver price fueled by this increase in lease rates.
Edit:
Apparently it was a mistake from Kitco’s chart. The real silver lease rates are given here:
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Table 1: Real Silver lease Rates |
Well, too good to be true…