Last Updated : 30 April 2013 at 14:05 IST
Comex Silver at $19.5/oz is a possibility that cannot be ruled out, given certain conditions.
Going by the words of Manoj Kumar Jain, President Commodity & Forex Business, India Nivesh Commodities Pvt. Ltd, “for silver, the level of $24.8 is a crucial one. If it fails to close above the level on a weekly basis, chances are more that it would go down to $22.40 -$22.50. And subsequently, on breaching the same, would could go down to as much as $19.5.”
In terms of INR, this means silver can go down to as much as 39000 levels.
As of 01.36 PM, silver for May delivery on India's MCX was seen trading at Rs.45213/kg, a loss of 0.11% as of 01.25 PM IST. Silver on the Comex for delivery om July 13 was seen trading at $24.305/oz, a gain of $0.139 or 0.58% as of 01.38 PM
Silver physical shortage?
In yet another piece of information, Rick Rule, President of Sprott Asset Management USA, Inc. outlined that there is a physical shortage in retail denominations of gold and silver even as there exists no reported shortage of silver or gold in bullion bars.
“I think we are in a physical shortage in retail denominations (of gold and silver). There’s no shortage of kilo bars. There is a shortage of coin rounds and strips, which are used to make coins.”
This, however comes with a caveat: Rule has said that there could be shortages in the wholesale bar market as they begin to get converted to smaller denominations.
Currently, many dealers are charging 20-25% premiums when it comes to retail sale, which could eventually kill the retail markets.
Inventory depletion
From 60,000 ounces in silver holdings to just 54 ounces in two and a half week's time: it happened with Silver Bullion Pte, one of Singapore's leading suppliers of coins and bars of bullion as they saw heightened physical demand taking toll on inventories. Delivery time has now almost doubled.
Subsequent to the slump in silver and gold prices, the physical demand of bullion rose, especially in Asia and particularly in India and China.
Reports from sources say that at the height of shopping frenzy, a few jewellers in India even chose to shut shop as demand was over whelming.
Perth Mint works at weekend
Meanwhile demand for coins--Maple Leaf gold and silver coins brought out by the Ottawa-based Royal Canadian Mint and Australia's Perth Mint-- have soared strong.
“The Perth Mint is meeting the surge in demand for physical silver and gold by ramping up productivity as quickly as possible to ensure lead times are kept to an absolute minimum,” Ron Currie, sales and marketing director, said in an e-mailed response to questions by Bloomberg.
The Mint is learned to be working at weekend as well.
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