The LBMA has chosen Thomson Reuters, CME to provide an electronic replacement to determine the daily price of silver (the silver fix). The new auction based approach should be quite an improvement in terms of transparency when setting the daily fix, which was prone to abuse. Read more about the new fix here.
However the real story of silver I would like to share is that "identifiable above ground silver reserves" - as tracked by Thomson Reuters - are hitting new lows and very few in the industry talk about it.
Our focus in this newsletter:
- Article: Silver Reserves Hitting New Lows. Silver's has been consumed by industry in such large quantities that reserves are now extremely low, yet very few take notice.
- TSH Gold Migration and Third Party Audit Completion. All gold bullion has now been moved to The Safe House and Inspectorate Bureau Veritas has completed a two day physical audit of the 1.5+ million ounces stored at our vault. Auditors fully reconciled physical parcels to the [email protected] The Safe House Parcel Ownership List. See the July 2014 Inspection Report here.
- Special - 50% off Bullion Transfer-In's for the month of July. July is a good time to schedule transfers into S.T.A.R. Storage @ The Safe House. Receive 50% off the regular service fee for transfer-in bullion.
| Worldwide Known Metal Reserves - Four Gold oz for each Silver oz:
|Recently a very well attended LBMA Market Forum occurred right here in Singapore, featuring the who's who in the Asian bullion industry with speakers ranging from the Singapore Minister for Trade and Industry, to industry analysts, miners, refiners, banks, representatives of bullion exchanges and more. It is the type of event where attendees network, make announcements and find out the mood in the industry.
The event was focused on gold and none of the speakers, with exception of the LBMA Chief Executive who gave a short updated on how the new silver fix will be "fixed", so much as mentioned silver or platinum. For the assembled crowd, the institutional cream of the crop, it was as if gold is the only precious metal.
Three days later I was sitting in Kuala Lumpur, courtesy of the Malaysian Futures Exchange (Bursa Malaysia) who flew me up to give a presentation on silver (see slides), and listened to my fellow presenters as they addressed the 700 attendees and again the emphasis was almost exclusively on gold. What I learned from these events is that while Asia has been buying very large amounts of physical gold silver is still virtually ignored by most institutions here.
This reminded me of a conversation I had with a precious metals commodity trader in early 2009 wherein I asked him where I could buy silver. His answer was a somewhat derisive "Silver ? Nobody would ever buy silver !".
I literally started Silver Bullion the next day, knowing that I would have no competition from banks. Yet even 3 million ounces and SGD 185 Million dollars worth of sales later I bet that the same banker would still have the derisive answer "Silver ? Nobody would ever buy silver !".
Nevermind that known above ground silver reserves in 2013 were only 43,500* tons (1,269 Million oz) compared with 174,000* tons for gold. Over the last 40 years industrial demand has depleted worldwide silver reserves to such a degree that nowadays there are almost four ounces of gold for every ounce of silver.
Yet the yellow metal is still priced - by leveraged derivative exchanges - at over 60 times more than the underappreciated silver which implies that the worldwide silver supplies are valued to be just 1/240th of gold supplies - about 0.4% of gold supplies. Silver is grossly undervalued.
With so little buffer reserves and such great industrial demand it is just a matter of time until real silver shortages - either gradually through industrial demand or suddenly through physical investor demand, will develop and the price will be forced up very substantially as the physical reality asserts itself.
We might not have a crystal ball but storing silver at today's prices is a great opportunity as the downside is limited by industrial demand and the upside is immense as very few realize how undervalued silver really is.
A pallet cage containing 1000 oz silver bars is racked via lifter into it's slot at TSH. We are now storing 0.12% of physical world silver supplies (~1.5 million oz), have capacity for 1.5% and are aiming to store 1% (~400 tons) while supplies are still available.
So I hope to keep hearing "Silver? Nobody would ever buy silver !" for a few more years before the real shortages begin.
|by Gregor Gregersen
and The Safe House / Silver Bullion Team
*source: "Silver Institute / *Thomson Reuters 2013 report" for Silver and "25/6/14 LBMA World Gold Council Presentation" for Gold.
| Vault Audit Completion:
|Third Party Vault Audit
Inspectorate, a third party LBMA approved inspection company, has completed a full physical audit of S.T.A.R @ The Safe House bullion parcels and has fully reconciled these parcels against the TSH Parcel Ownership list as of July 3rd when the audit began.
The audit took a team of five people two days to check the 1,530,875.91 ounces of gold, platinum and silver contained in 5,401 tamper proof parcels. Each parcel's serial number was checked and sample weights were taken.
S.T.A.R. Storage customers can download their report at any time through their S.T.A.R. Storage interface. Alternatively download a copy of the audit report here.
| Transfer-In Special:
|50% Off Transfer-in Special
If you transfer bullion into S.T.A.R @ The Safe House in the month of July you will receive a 50% discount of the regular transfer-in process. Transfer-in bullion is DUX tested, parcelized, photographed, and can be sold back or taken delivery of at short notice.
Find out more about the Transfer-in program.
Documents that are part of the Transfer-In Process. Read more on how we protect your bullion from systemic risk
See more products and prices at www.silverbullion.com.sg
and our, fully owned, storage facility at www.thesafehouse.sg.
The Silver Bullion Team
Silver Bullion Pte Ltd
Registration Nr: 200907537M
Floor #03-02A Certis CISCO Center II
20 Jalan Afifi, Singapore 409179
Phone: (65) 6100-3040
Fax: (65) 6826-4022
Email: [email protected]
Information provided here should not be considered as advice or as an offer or enticement to buy, sell or trade. The contents of this publication, including any opinions and analysis, are strictly intended for educational use. Opinions expressed in bylined articles are those of the individual author and do not necessarily reflect the views of Silver Bullion Pte Ltd.
Silver Bullion Pte Ltd. makes no warranties, whether expressed or implied, as to the accuracy of the information provided or for eventual results obtained by using the information. In no case shall Silver Bullion Pte Ltd. be liable for direct, indirect, or incidental damages resulting from the use of the information.
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