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Shanghai Silver Trading Volume Surges By 65% Last Month
In the aftermath of the Shanghai exchange's margin hike and trading band increase reported previously, a pair of articles from Bloomberg and the FT looks at the trading of silver in China, where the mostly retail-traded metal continues to be seen as an inflation hedge. From Bloomberg: "Silver trading in Shanghai, which jumped 65 percent in terms of volume last month, will continue to increase on demand for a safe-haven investment, even as the government moves to curb volatility and speculation." And since China's inflationary concerns are unlikely to go away soon, it is only natural that domestic hedging, mixed in with some wild speculation, will continue: "“Chinese investors have piled into silver as one of the
investment choices to hedge against rising inflation,” Shi
Heqing, silver analyst at Beijing Antaike Information
Development Co., said today. The government’s move to increase
margins in an effort to curb volatility won’t affect buying
interest in physical material, Shi said." Sure enough volume has exploded: "Volume on the Shanghai Gold Exchange rose to 33,293 metric tons in April, up from 20,206 tons the previous month, according to data from the exchange, the main bourse in China for trading silver." The FT provides another look at the unprecedented surge in silver trading in Shanghai: "At the same time, silver turnover on the Shanghai Gold Exchange, China’s main precious metals trading hub spiked, rising 2,837 per cent from the start of this year to a peak of 70m ounces on April 26, according to exchange data. The number of contracts outstanding, an indicator of investor exposure, doubled over the same period." In other words, while in the US it is mostly gold that is a pure inflation hedge at both the retail and institutional level, in China, where runaway inflation is running far higher than here, silver is the primary means to cut inflationary exposure. Therefore, nothing short of a full on deflationary episode in China will do much if anything to have a long-term impact on the price of silver.
More from the FT:
The surge in silver prices has attracted investors the world over, from China and India to the US, where the metal has become the investment of choice for Americans distrustful of the actions of the government and central bank. Silver’s stunning rise has inspired a rash of conspiracy theories as investors and analysts struggle to explain the speed and scale of the rally.
Silver trading in Shanghai remains below the levels in London and New York, the two main global hubs, but its rapid growth means its has become increasingly significant in driving prices, bankers said. Turnover in New York silver futures, the most liquid futures contract in the metal, averaged about 700m ounces a day in April.
“I’m pretty certain it’s the Chinese retail [investment] that is driving this move,” one senior precious metals banker said. “There’s an enormous amount of speculation going on out there, they’ve got the bit between their teeth.”
Ms Tully said Chinese investors cut their positions in silver sharply last week as prices tumbled, before returning to the market early this week and driving a short-lived rebound in prices. “No less than during silver’s swift ascent, [Chinese] agency was very evident in its tumbling descent.”
Whether Chinese buying continues “will be a major determinant of whether silver can finally take out $50”, she added.
Ivan Glasenberg, chief executive of Glencore, the commodity trader that plans to float this month, dismissed the drop as “froth” being flushed out of the market, saying that supply and demand fundamentals remained strong.
Of course all of this may just be a dress rehearsal for the big show. As reported before, on May 18th the Hong Kong Merc will start a domestic version of our own Comex. And if speculative froth was heavy now, just wait until this is launched.
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oh, yeah? well eat this froth:
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This email from one of my PM suppliers came this morning:
That is freaking hilarious.
"There's no shortage, the market is FLOODED" lol.
rivers of silver. world wide. the last price surge sent granny, tweety, and sylverster going thru everything. they ended up with a kruger and a 1/10 oz. gold eagle. granny hid the kruger in the cookie jar. sylvester has his on a gold chain necklace and is doing cat-disco, and tweety? tweety sez: i tawt i taw a takedown, BiCHeZ!
I'm down!-
Chinese investors and man on the street don't listen to 70's Rock.
So Ben's Printing Press will one day be yesterday's telex machine.
Check out Ben B playing bass back in '72 to Mr Fantasy.
http://obamadollar.com/Ben-Bernanke-Mr-Fantasy.jpg
Of course we are near the end of the dollar currency.
http://www.youtube.com/watch?v=7_nwbTeIN4Y
Silver bitchezzzzzzzzzz...........
& Kids rapping in High School Calculus class, - Lord this world has gone nuts
http://www.youtube.com/watch?v=Umoo9yTETFs
Anyone catch this video yesterday of Jeffrey 100 to 1 Christian interviewed on Bloomberg news? At the end he calls for $26 Silver by years end. But durring the interview he gets hammered with questions on why the CME raised the margins the way they did. A noticeably nervous Christian spews forth more nonsense in response.
Funny how this was a headline on Kitco's news reel yesterday, but today it is gone.
http://www.bloomberg.com/news/2011-05-12/cpm-s-christian-forecasts-silver-at-26-gold-near-1400-video.html
Do you think that Christian was baiting the public to buy metal with his claim that the leverage on the comex was 100 to 1?
I'm down!
He Papa, I won't feed your Malaria mosquitoes, so please,
to keep them healthy, you musst go there yourself.
Have fun!
Silver Bitchez
de-what?
if it gets too frothy then there will be the stexnet to calm it down.
Take delivery of the physical silver and leave the speculators to be raped by the regulators.
CME is margin hiking itself into oblivion.
The chinese citizen, being a low wage-slave, is virtually restricted to silver as their hedge. Kind of like the US.
+7.25hr
The Chinese have a deep rooted affinity and respect for silver. They'll out-buy the US many time over. Yes, they have peasants, butt their middle class to rich ratio is growing and they have but loads of cash. Not only that, if the whim takes them, the may just spend a bit of petty cash in the form of reserves, clandestinely, announcing their purchases on some Western holiday.
Silver bells, Silver bells.....
Dum dum de dum
de da dum dum
This is one of the main reasons to buy silver. When the Chinese started selling silver to their people through the banks it was a game changer. The trolls, of course, ignore this.
But how do you say,
"Take delivery of the physical silver and leave the speculators to be raped by the regulators. BITCHEZ!"
In Chinese?
had to edit this as comments cannot cope with chinese text so visit this link instead.
http://translate.google.com/#en|zh-TW|Take%20delivery%20of%20the%20physical%20silver%20and%20leave%20the%20speculators%20to%20be%20raped%20by%20the%20regulators.%20BITCHEZ
And for a good laugh listen to both the english and chinese versions :)
Hilarious! Makes me want to play around with xtranormal today. Not good on a work day.
I'm a silverbitch.
Chinese silver, bitchez!
Shanghai Gold Exchange lowered the silver margin today. Because according to its rules, if the silver price does close limit up or down, the margin hike of yesterday will be unwound. So not everything is related to conspiracy.
Funny how the trolls were telling us all that on the one hand the US exchanges were acting normally and fairly, but on the other hand that the Chinese were "against us". Funny how a group of people can be so very exactly 180 degrees wrong. The Chinese exchanges ARE fair, and ours are corrupt as shit.
The CME has reduced silver margins exactly ONCE in the last year. http://www.zerohedge.com/article/cme-margin-hike-4th-and-5th-charting-pa...
The CME has reduced silver margins exactly ONCE in the last year.
Mustn't have been enough volatility in the market.
The COMEX is corrupt, but this doesn't mean that the Chinese don't manipulate things to their advantage. They just have different goals (like going from 2% gold reserves to more than 70%). Artificially low prices are something that benefits them tremendously.
Chinese pretty much invented corruption. They're actually a lot better at it (and their society is much more tolerant of it).
In other words, they follow their publicised rules as it should be.
Yeah right, an excellent inflation hedge for the morons that bought at $45 and above.
Wow. Sharp as a railway line today, mate. I ran out to my stash and nope..... it was still all there.
Just wondering, observant as you are, have you ever considered the following?:
Adam Smith, (a real economist); Wealth of Nations.
Like an impoverished spendthrift,
whose pressing occasions will not allow him to wait
for regular payment of his revenue,
the state is in the constant practice of borrowing of its own factors and agents, and
of paying interest for the use of its own money.
O
It is do or die time. This is it for Silver. Now is the time to prove if you will break lose and create the 'Silver standard' in the market like gold has. The gold silver ratio should go down to 10.
The Chinese know that once QE3 is announced they will nlt see these prices for gold and silver again. What use those trillions of paper called US Dollars if they dont use them now.
The use from those trillions in paper provide a revenue stream in interest payments. The dollar is a rotten egg for sure but since the Chinese economy is dependent on exports to the US they would shoot themselves in the foot if they deliberately tanked the dollar. It is a standoff of sorts.
Not if they develop their own economy... and that is their plan! 3-5 years= USD life expectancy.
You will see the Chinese buying all of our dips....hell they probably caused them with their computer jockeys....they are tired of paper...theirs and/or ours....silver for the people and I think the government is buying gold...will reign supreme....I also see the new exchange as a huge sucesss.....they no longer trust the USA...I don´t either and we know we can´t trust the EU guys either...if it gets to desperate...they lie....and its desperate out there..just listen to Geitner and Bernanke....if we don´t raise the debt limit...the world will end...
Um China IS the #1 gold producer in the world and are racing with production in huge mines like in South Africa and buying on the world market to boot. That little 1000 number you read is most likey sandbaged unti they want the world to know much they really have. Thats just how the commies roll mate.They are encouraging their citizens to buy silver as they do not have many good silver deposits. Now if that does not make you go Hmmmm. I laugh my self silly watching these Comex and London scum thinking that they are still in control of the prices. It amazes me how exchanges who do not have any metal think that they are going to determine price going forward.
They managed to break silvers neck in one week though (five margin hikes, -35% fall silver prices)
Yes our paranoid idiots are trying to suppress the prices to make it even easier for them. Broke its neck? Nah, your timeline is to American, Try to think like tthe oldest civiliation in the world. On a long enough timeline..............................
In a way I suspect these prices might be 'cemented' and 'stronger' now with all 'weak' hands out of the game and all the 'leveraged' players wiped out.
Hmm, you think that, do you, Mr. 3 weeks 1 day?
Should we all sell our silver?
lol
You are free to buy and sell as you wish. I have read ZH for almost 2 years on a daily basis. I just registered to be able to comment 3 weeks ago.
There's seniority in fight club? Who'd a thunk?
Lol
No seniority. But no fighting with sock puppets on every appendage either.
Fuck you Mosely. I was starting to think of myself as someone of importance and then you burst my bubble. Bastard!!!!!!!
lol, I wouldn't think of it that way. You are the center of a whole universe. Your star may or may not shine brightly in those of others, but you are always the center of your own.
Yes its cash and carry now. Which will make for a slower, steadly more dependable rise. But do not ever underestimate the Cartel. This is a game for all the marbles as everyone in the world knows the days for the dollars reserve currency status are numbered. Big parts of the world are looking for an alternative. This is where the race for Gold and silver reserves by Russia,China,Mexico,Netherlands or anybody else who plans to be a part of the next generation of world currencies comes from. These guys are not done with thier cheap shots or shenanagins as their desperation builds.
They managed to break silvers neck in one week though (five margin hikes, -35% fall silver prices)
Actually, where physical metal is exchanged between real people, it's more like transitory a 8% dip: http://www.24hgold.com/english/buy_sell_silver_coins.aspx?co_id=0
Certainly, you are not taking the manipulated crimex prices to be the actual market price of physical silver. That would be a False Construct.
Nice link. Thanks.
That link made my day. Thanks
No they managed to castrate paper silver holders. All paper holders will be castrated. Have you not been paying attention?
The margin hikes and the added paper raid on the comex by the banksters provided the extra leverage during profit taking to have a dramatic impact. It is still an illusion. I will reload again and again on the way down as I did reload on the way up. I don't have the computing skills to call the top or bottom of a market. That is why I hold my course steady and acquire metal precipitously every payday.
But the silver price has gone down 20%+ recently. This means there is a lack of demand. These 'free' markets that are based purely on supply and demand say so, and you'd be a fool, liar and terrorist to think or say otherwise.
Today I ordered some nice silver eagles here with proaurum for ~30 € each.
Plus 2 Britannias, with the new design that is a bit more minimalistic than the old one which i liked a lot.
Looks like the "market" 's bottoming out, Randolph.
I say let's buy, now. :-)
only takes $5 to take out of the ground, lmao
I lived in Honduras in the early 1980's. I met some Americans who came in with pans for panning gold. They went up in the remote mountains, hired [and taught] Indio women how to pan for gold. They supplied the pans, the women did the work for $1 US a day [in Limpiras, at that time 2 Limpiras = 1 US FRN]. They told me they averaged $10 worth of gold per woman. They also told me once they stopped paying and took the pans back, the women stopped panning for gold.
So in this case, it only took $1 to take it out of the stream.
Well, $50 an oz, assuming an average gold price of $500.
So that would be a 10 to 1 GSR if silver costs $5 to dig out of the ground. BTW, thanks for doing the math.
Why not do a deal with the mines! We can work 8 hours a day , get paid at minimum wages and use half our daily wages to acquire silver at $5 an ounce. Effectively free labor for the mines.
Anyone know how much of physical deliveries took place at end of settlement
1 gold contract 100 oz/ 377 for may.
2 silver contracts 5,000oz/ 417 for may.
here are the crimex banksterz' inventories as of yest: DJ Comex Gold And Silver Warehouse Stocks-May 12
may 25: options expire
may 26: last trading day for may contracts
I'd like to personally thank the Federal Reserve Board of Governors for gunning the price of silver over 300% in the last two years. With the XAU/gold ratio @ 7.68 and the spread between real metal and blomex pricing going massive, this charade has been exposed for all but the most deluded.
You look at a company like AEM or Kinross and just shake your head. The public apparently has no idea what these companies are worth with gold north of $1500. Mutual funds probably still see them as "too risky" to invest in (conditioning, brainwashing). And then the bullion banks short the shit out of these while telling everyone it's a legitimate "hedge"? Right, sure it is.
5 margin hikes by CME in one week.
Memo from Blythe to CME board of Directors: Should this give rise to a conspiracy theory, we can always deny it in the MSM. We will claim that volitility was the problem, not demand.
Myth buster press to the rescue, press release accepted at face value. Nothing to investgate here folks. Move along now. Good journos, good journos. Fetch. Sit. Roll over.
I will be one those idiots buying at 45+. I don't have all the PM's I want yet. Just a working stiff here so I buy as I can. When its $100 the purchases at 42, 45 whats the difference. I will go down in what I believe in if I'm wrong. No big deal there goes my fancy new car that woulda been also worthless 15 years from now.
I'm expecting that the transition from safe bond investing (while central planners destroy value) to hard asset flight to safety, to both preserve purchasing power and avoid the many ways they will tax paper hard assets, will cause the continued march higher in price of phsical until one day all transactions are done with real money, outside of collapsed government controls.. and if bond money ever starts flowing into the pm market you better be positioned in front of it.
Which brokers are offering HongKong futures trading?
What's wrong with Turd's blog? looks like he lost some data.
probably something to do with implementing the new one.
Must be those 2 guys who have been making asshole comments on his blog. Hacking in.
Must be Blythe's minions at work
Blogger.com looks to have suffered a major meltdown last night.
The people I read there has lost their posts from yesterday -- turd, norcini, jesse, etc. Readers cannot post comments either.
trading the equivalent of a years global production of silver (700 million ozs) everyday and more than 10 times the worlds global production of gold each month. Yeah... sounds like the same paper scam that Jeffrey Christian explained so well at the CFTC.
The notion that raising margins forces out the speculators or that the speculators are responsible for silver's volatility is HOGWASH.
http://blog.commodityandderivativeadv.com/2011/05/13/small-speculators--...
Please, enlighten us as to the true cause then.
Not sure I want to give you a click yet.
500 wanna be Blythes line up each day with a $30k trading account. Margin for one SI futures contract circa $14k. Margin requirements total how much now, $22k or so? And that doesn't affect a trading account, right? Now, lets look at the big boys. They were losing billions going short, each dollar rise. You reckon they weren't bleeding? The CME have a few good buddies over at the COMEX who needed a favor.
Now if it affects them to the point where they change the margin rates to affect their accounts favorably, then the opposite side of the trade is going to be adversely affected in his account. It's the little guy who is run over as they cant absorb the losses on thin account balances after the hikes.
In anothe arena, even sovereign countries accounts are affected;
http://www.zerohedge.com/article/another-margin-hike-time-portuguese-bond
I junked you straight up.
You are correct, waldock, of course, since as long as initial and maintenance margins are the same for longs and shorts, and a futures contract is by definition zero sum. But you also can see why we see the market response to margin increases as pretty predictably in favor of stronger hands (shorts?), and member/hedge (big guy) initial margins are lower than spec (little guy) initial margins. I'm not in the conspiracy theory camp (yet), but the margins on silver do look crazy relative to other PMs, even considering the volatility/open interest/volume formula they use. Raising margins the number of times they did, with each raise in close proximity (twice, effectively, in one day) doesn't look like responsible sponsorship of SI on the CME Group's part, to say the least. We are all schooled in history here, and we are aware that manipulation did occur in 1980, and I don't mean the Hunts.
In other words, I may be paranoid, but that doesn't mean they're not out to get me...
I don't play the CRIMEX because: 1) the hedgers/members have deeper pockets 2) their lower minimum performance bond requirements given them an even bigger advantage. Besides, are they really hedging at all times? Or are they looking to whipsaw joe dumbfuck retail investor who guessed right and still got wiped out?
It's analogous to the Bernie Madoff exemption in equities. It is not the big boys who need the exemptions or the special privileges. Some of us aren't as obtuse as you desire. You're junked.
Thet can trade their silver bars as often as they want. Much more important is physical delivery. What about that?
Didn't I see this on Disney Saturday morning with my kids.
"KimPossible and the Case of the Shanghai'd Silver"
Correction, it was on the Comex Cartoon Network - A Viacomex Company
http://tradewithdave.com/?p=6346
Dave Harrison
www.tradewithdave.com
And China has a long long history of using Silver as money - so they are not unfamiliar to this metal.
be careful out there, the big boys will crush you..
http://www.readtheticker.com/Pages/Blog1.aspx?65tf=202_richard-wyckoff-composite-man-wins-again-with-the-silver-etf-2011-05
Look what I got in my email. Phys is running out.
SilverGoldBull.com Market Update
In an effort to keep our clients aware of current market conditions reflecting physical bullion we are putting out an update!
Silver Gold Bull has gone to great lengths to work with many suppliers which has kept our bullion supply uninterrupted, even when other dealers have been completely without inventory. However, with the "paper" prices of precious metals having been forced down to these levels the market is experiencing a tremendous amount of heavy buying from large investors, both private and institutional. The result has seen much of the remaining bullion removed from the market. This means that Government Mint (Canadian Maples, American Silver Eagles) delays are effecting our supply. The average wait time for products into us is now upwards of 3 weeks on NEW orders processed after today May 12, 2011. This means we are moving our delivery commitment to 4 weeks out. This is a safety mechanism to prevent frustrations of our clients waiting for delivery of the goods… we would rather be open and up front then to incur damage to our strong relationships that we have built with our customers.
As market developments continue, we will respond with our customers best interest in mind. Please remember to join us on Facebook and use the client feedback opportunity on our site. We look forward to our continued growth together.