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Title: “Silver Squeeze” Supply Update
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Published: Feb 1, 2021
Author: Alex Daley
Post Date: 2021-02-01 11:52:42 by BTP Holdings
Keywords: None
Views: 106
Comments: 5

“Silver Squeeze” Supply Update

Alex Daley, president of

FEB 1, 2021

As many predicted with the social media chatter of a "silver squeeze", this weekend saw unusually high demand for precious metals, especially physical silver, causing many sites including ours to run low on stock or temporarily stop taking orders.

A few of our most popular products are now back online, with more being added throughout the day.

Orders placed over the weekend will be honored, as we deal exclusively in allocated physical metals from our network of mints, refiners and wholesalers.

As always, orders for allocated storage remain liquid at all times – they are in transit and you may sell them at any time.

However, for delivery orders, shipping times may be longer than originally estimated at order time. We are working with our supplier network to determine exact timing, faced with a backlog many times what our vaults are prepared to fulfill each week. We are expecting deliveries to take a few weeks to clear out, and will update customers as we go. (If you wish to redirect a delayed delivery order to storage just contact customer support to request the change.)

This rush on physical silver came at a time when the industry was already experiencing tight supply: a year of significantly higher than previous volumes which stretched many mints to their limits, the US Mint providing very limited allocations of its most popular product pending a redesign, and stocks of generally stretched thin as holders are simply not selling.

In fact, over the weekend we saw over 50 times the number of buys as sells. This is exacerbated because bid/ask spreads widen quickly in physical metals markets when supply thins out. Ask premiums rise rapidly with demand. Yet future mint allocations, which are often at pre-contracted premiums, slow the speed at which bid premiums rise and eventually pull asks back down toward them. We saw this last Spring and are seeing it again now.

This spike in demand quickly drove up spot prices, as well, jumping nearly 20% in the past week, much of that since Friday. There are many good fundamental reasons for silver prices to be higher than they have been, as Jeff Clark has often outlined.

However, moves this fast in premiums and spot prices can often reverse as quickly, so we encourage all of our customers to exercise good judgment and disciplined trading in volatile markets.

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#1. To: BTP Holdings (#0)

I don't know what, but something is going on that is not normal. In the early 2000s when silver was about $6 per ounce, the premium for 1 oz rounds was 50 cent and I though that was too much, I was trying to buy 1 oz rounds at 25 cent premium but never found a reliable supplier at that price. Now premiums are more than 10 times that much and that shouldn't be. I also noticed that neither Interactive Brokers nor TD Ameritrade allows you to take delivery. I don't know if other futures brokers will not allow you to take delivery.

DWornock  posted on  2021-02-01   15:13:55 ET  Reply   Untrace   Trace   Private Reply  

#2. To: DWornock (#1)

I also noticed that neither Interactive Brokers nor TD Ameritrade allows you to take delivery.

What would you do with 1,000 ounces of silver if you had it?

Sizes of various metals contracts can be found here. ;)

BTP Holdings  posted on  2021-02-01   15:26:15 ET  Reply   Untrace   Trace   Private Reply  

#3. To: BTP Holdings (#2)

I might do what one person did. Paint the 1,000 oz bars and use them as door stops. That is a way to hide them in plain sight and no one ever suspects. The main thing is, if you take delivery, there is no premium. In any event, I know what the contracts state. However, I don't know what future brokers, if any, will allow you to take delivery.

DWornock  posted on  2021-02-01   16:29:43 ET  Reply   Untrace   Trace   Private Reply  

Replies to Comment # 3.

#4. To: DWornock (#3) (Edited)

However, I don't know what future brokers, if any, will allow you to take delivery.

That makes you wonder if they even have it to deliver at all.

The great silver mining regions in the U.S. were the Comstock Lode in Nevada and the mines around Tombstone, Arizona. ;)

One of the tombstones on Boot Hill in Tombstone, Arizona the epitaph reads:


BTP Holdings  posted on  2021-02-01 16:32:03 ET  Reply   Untrace   Trace   Private Reply  

#5. To: DWornock, 4um (#3)

However, I don't know what future brokers, if any, will allow you to take delivery.

I don't think there is any, at least not back in 2009. I doubt things have gotten any better.

1,000 oz bars are pretty illiquid unless you know somebody.

Esso  posted on  2021-02-01 16:44:24 ET  Reply   Untrace   Trace   Private Reply  

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