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Silver Lease Rates And Silver Inventories At CME

|Includes: iShares Silver Trust ETF (SLV)

Just a few weeks after I turned bullish on silver, articles are sprouting out of nowhere about silver inventories being historically low.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/17_Expect_Major_Silver_Price_Spike_As_COMEX_Inventories_Decline.html

However, I see signs of a temporary weakness in silver.

1) The silver stocks at the CME aren't actually going down anymore. They are going upwards (Chart 1).

Chart 1: Silver Stocks CME

2) The silver lease rates are actually going down, instead of going up. Historically, when silver lease rates plunge, the price of silver will go down a few months later.

Chart 2: Silver Lease Rate

Conclusion: I would be wary about the price of silver. If this trend continues this way, look out below!

Disclosure: I am long PSLV.