I learned something about the Silver market yesterday. There are 2 parrallel markets. The 1000ounze bar market and everything else. The 1000oz market is more applilcable to industrial and investment fund users while smaller bars and coins are down to the small investor.
Although they seemed to be though of seperatley, the prices for an ounze of Silver in either market is the same.
The Keiser Report on RT was interviewing a very interesting guy about these two parallel markets. The interviewee Ned Naylor-Leyland seemed to have a new thought about the whole market during the interview.
The question Max Keiser put to him was what amount of purchasing of silver would be enough to raise the value by a dollar. Leyland said no-one knew but a thought also occured to him what if the 1000oz bar market was eaten into by the collectors market, ie people buying 1000oz bars to turn into coinage rather than buying the metal from the miners.[youtube
From what I understand not only would private buyers drive up the price but the fact that the number of 1000oz bars in existence was reducing to fill this demand for coinage it could be possible that the effect of private demand for silver could be grossly underestimated. Leyland didn’t commit to this hypothesis but he said he would look into it over the coming months to see in fact if this was actually the case.
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