Archive - Apr 4, 2011

Silver for immediate delivery has gained another 1.7% to $38.50 an ounce, the highest level since February 1980, the year silver reached a record of $50.35/oz. An ounce of gold bought as little as 37.32 ounces of silver in London today, the lowest level since September 1983. Silver has come out of backwardation and returned to contango with longer dated future prices again higher than nearer month contracts and spot for delivery (see table below). This suggests that default on the COMEX, as warned of by some analysts, is not imminent and the tightness seen in the physical silver market may have abated somewhat. However, the Dec12 contract trading at only cents over spot for delivery (less than 10 cents) suggests that tightness remains. Given the degree of tightness in the physical silver market, silver may return to backwardation sooner rather than later. The latest COT report shows speculative long positions, or bets prices will rise, outnumbered short positions by 37,139 contracts (see news and chart below). This is a level of net longs by hedge fund managers and other large speculators that was seen as long ago as 2002.

We live in
Belgium, a little country right in the heart of Europe. The country is in many
ways a small version of Europe. Most have heard of Brussels, which is not only
the capital of Belgium, but of the whole of Europe. Belgium is becoming a divided
country, with the two largest communities – the Flemish (Dutch speaking) and
the Walloons (French speaking) –  opposing
to each other on different levels, but mostly about financial issues.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 04/04/11

AUDUSD and EURUSD are building a firm position in the strong long zone GBP pairs with the exception of EURGBP are in neutral territory. Today we have Construction PMI at 4:30 am EST, if this event results in a strong deviation from consensus its likely that we could see some changes in retail positioning