Silver ETFs unload 580 metric tonnes

In the Lead: “NickelOdious”

Such odds currently appear a bit distant. Silver-based ETFs leaked another sizeable tonnage amount from balances in the latest reporting period. More than 580 metric tonnes of the white metal were off-loaded by silver ETF investors, bringing remaining balances to the 14,267 level – a one-year low (so much for the putative “major silver rush” being depicted in various subscription-based publications; it is more like a rush to the exit doors). Net speculative positioning in the silver futures markets also fell according to the CFTC’s latest report on such matters. More than 110 tonnes’ worth of speculative long positions evaporated from the market and drew such aggregate levels to their lows for the current year.

Veteran market observer Ned Schmidt, in his latest “Gold Thoughts” opines that the “Great Silver Crash of 2011” may not yet have run its course. Mr. Schmidt points to the previously parabolic in character rise in silver on the charts and notes that based on previous annual lows, highs, and closing values recorded in the white metal, not only is the metal collapsing out of said parabola, but it is doing so in an “obvious and irrefutable” manner. His “to-watch-as-it must-not-be-broken” level is the $32.25 spot level, beneath which the possibility of free-falls to the teens in the white metal’s price is a distinct possibility.

One metal that has clearly plunged into a bear market paradigm is nickel. At this juncture, the industrial metal is witnessing its largest oversupply in four years. Albeit nickel has traded as high as nearly $52,000 per metric tonne four years ago when the signs of overhang emerged, there are analysts who currently project it to decline to $20,000 and then to a possible $15,000 per tonne.

The nickel market is buckling under a roughly 60,000 tonne surplus at the moment, and analysts feel that its only support – a strike at miner Vale- is now gone and tilting it firmly into bear territory. Nickel’s primary application is the production of stainless steel and its largest producer is China. However, nickel is not the only base metal in abundant supply out there. Estimates place the overhang in aluminium at 301,00 tonnes and the one on zinc at 11,000 tonnes. Copper’s supply, on the other hand, might fall some 380,000 tonnes short of demand in the current year

Platinum and palladium sold off in sympathy with the remainder of the metals’ complex this morning. The former fell $12 to ease to the $1,814.00 mark per ounce (lows were seen at $1,782 earlier but the noble metal recovered well) while the latter dropped $9 to touch the $801 level after a brief overnight dip to $796.00. A sizeable dip was noted in rhodium which fell $200 to return to the $1,900 mark following a brief foray to higher ground recently, in the wake of the launch of a new ETC vehicle by Deutsche Bank.

The on-going SAAB story in the automotive niche saw another turn of the page this morning with the announcement that there has been an agreement reached by the nearly-defunct Swedish automaker with two Chinese firms. Nearly a quarter of a billion euros are thought to have been part of the deal struck by Pang Da and Zhejian Youngman with SAAB’s current adoptive parent, Spyker. At this point, Volvo as well as SAAB could be considered as Chinese-owned.

We are now at The Alamo; or, nearby, in any event, to…remember and take note of the busy goings-on at the 35th Annual International Precious Metals Institute Conference. Some 500 delegates from 22 countries have made the trek to San Antonio to hear presentations on a wide range of topics of interest.

Economic analysis, metals technology and processing, conflict gold, impending regulation in precious metals, market overviews, and a whole spectrum of other important issues are being discussed. Kitco News is covering the event and we continue to bring you fascinating video clips with some of the delegates in attendance here.

Stay Tuned,

Jon Nadler is a Senior Metals Analyst at Kitco Metals Inc. North America

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About the Author
Jon Nadler Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America
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