Another super day Thursday for silver prices, with a 3.66% jump to hit a new three decade high. The pull back was less severe than it could have been as shortages continue to dominate the news. The technical indicators are in the overbought zone with the RSI just above the ‘70′ level sitting at 70.59, however, it can stay there when it's in the mood. Also watch the yawning gap that is developing between the 200dma and silver prices. The chart suggests that we could now be in for a breather, but don’t count on a breather just yet as the physical market is struggling to meet demand.
This is a quote from Eric Sprott taken from his ‘Markets at a glance’ article where he referred to the demand for gold and silver akin to a tsunami as follows:
We believe Asian demand for physical gold and silver is akin to a tsunami. While precious metals prices have corrected on the paper exchanges, the inflation resurgence in Asia is quietly driving new, unforeseen levels of physical demand for the metals. While the world continues to float on a sea of paper, this massive wave of physical demand silently threatens to crash into the physical gold and silver market, potentially wiping out tangible supply.
A tsunami. Well, these are very strong words indeed, but we wouldn’t bet against him, not with silver in backwardation as it is at the moment. This is a situation where the spot price for silver is greater than the futures price, a rare event and usually bullish for prices. We now pop across to King World News where James Turk had this to say:
I always listen to what the market is telling me. The backwardation and all of the other factors that we have been
