As Physical Silver Demand Soars, Bullion Dealers Offer Huge Buy-Back Premiums

For those who have been keeping an eye on silver, things are getting a little tight.

Earlier Wednesday we noted a report from Ronan Manly of BullionStar.com, who revealed that more than 50% of deliverable silver on COMEX is suddenly ‘not available.’ Manly brought up this Oct. 19 tweet from metals expert Nicky Shiels, who said of delegates in attendance at the annual LBMA (Gold) conference in Lisbon; “they are mildly bearish Gold for the year ahead ($1830 by 2023s conference) but super bullish Silver ($28.30!) as the focus was on physical tightness driven by unprecedented demand.“

Just attended the annual LBMA (Gold) conference in Lisbon. Polling takeaways from delegates: they are mildly bearish Gold for the year ahead ($1830 by 2023s conference) but super bullish Silver ($28.30!) as the focus was on physical tightness driven by unprecedented demand

— Nicky Shiels (@nixsa84) October 19, 2022

Second, the spot market for silver remains in backwardation – meaning that the spot price of silver is above the futures price, which indicates an extremely strong demand for physical metal right now. ..

And as teh chart below shows, while silver futures have gone nowhere in the last four months, the price of physical coins has been soaring…

Demand has become so strong that, as the chart below shows, the extent of the physical silver percentage premium over spot is almost unprecedented…

Source: https://twitter.com/jameshenryand/status/1585387645957705728

The result? Bullion dealers are offering giant premiums over spot to buy silver.

APMEX, for example, is offering $10 over spot per coin right now.

This is fine pic.twitter.com/ts9IVduAgP

— zerohedge (@zerohedge) October 26, 2022

While SD Bullion is offering $10.50 and $11 over bid.

The big question, as always – where do we go from here?