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Silver Margin Hikes

May 10, 2011

Well, the dollar was off a bit and silver rallied today. Possibly because of MAYBE the last margin hike for a few days. There are many reasons for the margin hikes, one which I hadn’t considered before was backwardation. You see typically silver futures in later months are lower in prices the farther in time you go out. This is due to things like cost of insurance and storage. The current situation exists that those future prices are elevated significantly indicating possible supply problems (another term for high demand).

Whatever the reason its clear from numerous points that demand is very high, regardless of price. This bodes well for silver prices.

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