In this segment we will discuss, Silver 2022 More Backwardation! Will 2021 be remembered as the year silver finally breaks loose of its massive, short positions, or will it be another year that sees its price(s) stagnate? Physical demand for the metal was off this year because of the pandemic even though there are more electric vehicles on the road and solar panels on rooftops than ever before. And when you consider the thousands of other uses for silver in industry, technology, and jewelry, not to mention silver bullion demand for private use, 2022 is setting up to be like no other for silver.
The pandemic caused major mayhem for businesses worldwide in 2020, a year that saw silver`s global demand drop by 10% to 896.1 million ounces (Moz). The pandemic was the main culprit for the decline, with India alone recording an eye-popping 29% decline and other silver heavyweights Europe and China reporting an 8% decline. The retail sectors were especially affected by the pandemic, with many manufacturers and retail stores operating with skeleton crews or closed altogether.
So, what does it mean when you have a higher physical price than the futures market price? B-a-c-k-w-a-r-d-a-t-i-o-n! So basically, the futures markets (big banks) did not foresee the level of disruption the pandemic would cause the silver complex on a macro level. The demand for silver was much higher than the contracts that were set to mature in the immediate months ahead.
Basically, this is yet another way for Wall Street traders to make big money by selling short and buying the lower futures market price.
Please note from the above chart March 19, 2020, saw the silver price at $12.12 per ounce, and a little more than 4 months later was recorded at $29.77 per ounce on August 6th, 2020.
Wall Street is Wrong About Silver!
Remember Wall Street is not in the silver business. They only make money if you buy the brand of silver, they`re selling. We`re certainly not saying you should avoid the millions of silver stocks and funds related to the type of silver they`re pitching. Generally speaking, most seasoned investment pros will instruct their clients to convert their silver bullion holdings into Silver ETF`s citing silver coins and bars as obsolete or illiquid. This couldn’t be farther from the truth! A customer the other day likened her highly successful investment advisor to an ambulance chaser, always recommending a short cut, but rarely an original idea.
Ok. We get it AND we like short cuts if they`re legit. However, we`re not in the precious metals day trading business. And last time I checked my calculator doesn’t have enough zeros to calculate the amount of USD`s the Federal Reserve Bank is printing.
Private Bullion says:
Buy as much silver bullion as you can at today’s ridiculous price. The Fed is printing and pumping cash into the economy faster than ever before – hyperinflation is imminent! We believe silver bullion inventories will be extremely tight in 2022. And if the pandemic rages on good luck finding any at all.