Gene Arsenberg: Silver Shortage and Backwardation

Posted: February 5, 2011 in Financial Survival, Precious Metals, Silver

Gene Arsenberg from gotgoldreport.com explains we continue to see backwardation in silver.  Backwardation is a sign of huge demand, it shows spot is higher than the future market for that particular commodity.  Backwardation happens when demand for delivery exceeds the ability for the market to deliver that commodity.  In other words there are many buyers and few sellers. 

If you understand the silver story there is zero reason to sell.  We broke through key resistance of $28.70, it looks like silver will move higher for here.  We will need to see much higher silver prices for investors to be willing to part from their physical silver, particularly if you understand the story.  As I have stressed in the past there is no way commodities will explode higher without gold and silver participating.  Continue your strategy of accumulating metal.

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Comments
  1. Bud says:

    Enough said in this article….the lowly silver and gold bugs will soon see their years ( 40 or so since covert price manipulation began) of waiting for the real valuation of these to forms of historic currencies to be reinstated. Fiat currency always finds it’s intinsic value….that value throughout history has been zero…..gold and especially silver will find their intrinsic values based on set value in relation to weight….throughout history this has been the case and will be once again….no matter how much the banksters and bullion banks try they cannot stop the inevitable return of gold and silver as the only true forms of currency….that’s the way I sees it!

  2. yourhedge says:

    Great points Bud. I could not have said it better myself. Thanks for the comment.

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