23 January 2012

Silver Kilogram Bars Lead Retail Bullion Buying

Silver pops up 2% on Monday as Gold gathers pace on last weeks gains.

The technical chartists had been warning that Gold and Silver were due a rally. In fact, some Gold and Silver tea leaves readers have been fore telling a precious metal rally since the start of the year.

This theory was until recently not supported at all by retail buyers. Until in the last 10 days, heavy buying activity in Silver in particular at BullionSupermarket.com lent solid support to the technical analysis.

Particular activity in 1 Kilo Silver bars, and 50 ounce Silver bullion coin lots indicated a demand in not seen in Silver at the precious metal price comparison site since the first quarter of 2011.

According to the mainstream Financial media, the wholesale Silver price (up nearly 3% in London trading was ostensibly wafted higher by that most gaseous of rationale, "returning risk appetite".

This being the case, what could have caused this turn around in general sentiment is anyone's guess. Financial media pointed to successful bond auctions in Europe and improving US economic data. But it would seem the obvious key hurdle for "investor sentiment" in the near term is how Greek negotiations with bond holders pans out, leading to the payment (or not) of the next tranche of IMF money.

If the next tranche of bail out does not go ahead, a messy default by Greece seems all but assured. This is an outcome not automatically good for precious metals as has been previously supposed by many, as the kind of forced selling to raise liquidity would seem likely to re-occur in precious metals markets as was the case in December 2011.

At time of writing Gold trades at $1674 per ounce with Silver at $33.22 per ounce. Premiums on UK Kilo Silver currently are around 18% over fix


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