Silver fell back last week, erasing most of the gains made the week before and ending down nearly 6%.
This was quite a drop, despite the US Mint announcing sales of American Eagle silver coins totalling 3.65 million ounces in May, up 30 percent from April‘s sales, taking the total for the year so far to 18.9 million ounces and the highest ever on record which date back to 1986.
However, on the other side of the coin, silver holdings in the iShares Silver Trust, the biggest exchange – traded fund backed by silver, fell by 4.37 tonnes on Thursday, taking total holdings to 9,937 tonnes, according to data on the company‘s website. Adding to the confusion on the supply side, registered Comex silver inventories fell a staggering 38.5 percent in two weeks taking total inventories to multi year lows. With supply drying out and demand increasing it‘s hard to fathom how the price of silver hasn‘t appreciated more.
The gold:silver ratio stands at 42.9 and appears to be widening as gold gains & silver falls, partly in response to the eurozone debt crisis and partly because the US economy appears to be weakening, as evidenced by the weak Non – farm payrolls data on Friday.