At the moment it seems that the supply deficit in silver has people focused on getting a hold of as much physical silver as possible. With paper prices of silver at four and half year lows, it will be interesting to see how the price reacts to a lack of physical silver
Gold and silver are feeling the pressure of the combined drag of deflationary fears in the Eurozone, a slowing Asia and a stronger U.S. dollar. Gold finished the month of October down 3.3% and Silver down 5.6%.
Brent futures are trading at levels not seen since 2010, leaving traders asking why? Analysts are pointing to a grimmer economic outlook globally. However, the current situation can be seen more in terms of excess supply than weakening demand.
While many of the consequences of stimulating economic growth through currency devaluation and cuts in interest rates are known and intended, some are not. In the case of Japan’s lost decade, for example, a depressed currency and low interest rates led to carry trading.
With QE nearly finished the Fed now has to outline their plans going forward. Will there continue to be reinvestment of the QE bonds that roll off, what many expect or will market conditions decide that.