Silver demand simply ‘outrageous’
Silver prices made a new 30 year high of $31.75 an ounce last week and then proceeded to ratchet even higher into the weekend to around $33 on what is described as market backwardation.
Rarely seen, silver backwardation tells us the silver market can’t keep up with the level of international and retail investor demand. It indicates the fact that buyers are so concerned about future supplies, they’re willing to pay a higher premium for immediate delivery,” explains precious metals analyst from Lakeshore Trading, Dave Levenstein.
Backwardation happens when the market quotes a lower price for a distant delivery date and a higher price for a near-term delivery date.
And Levenstein believes it will continue as China demand rockets with an exploding middle class and Asian “savers” using silver to store value, while huge industrial demand increases both in China and around the globe.