Inflation decreases purchasing power. It also increases the expenses of most companies. In general, it’s a bad thing.
But some companies will benefit .
The Bigger the Lie
Let’s look for a minute at the very brief retraction statement which the LBMA released on 10 May admitting to the 3300 tonne ‘error’. To recap:
“
A data submission error led to the publication of an incorrect aggregate figure for the total silver held in London vaults in March. The corrected figure is 1,143,194 Troy ounces (‘000s).
So it was ‘
a data submission error’. The question then is, a data error submitted by who? There are only 6 vault operators in the LBMA London vault network. These are JP Morgan, HSBC, Brinks, Malca Amit, ICBC Standard, and Loomis. Why does the LBMA not clarify which vault submitter submitted the claimed erroneous data? The LBMA runs a ‘Vault Managers Working Group‘ so should be intimately acquainted with the 6 heads of vault management at the respective vaults.
Tuesday, 5/11/2021 14:42
GOLD and SILVER PRICES fell Tuesday alongside stock markets, bond prices and many commodities, falling back to $1820 and $27.20 per ounce ahead of tomorrow s much-hyped US inflation data. With falling bond prices driving longer-term interest rates higher across Western economies, both US and European crude oil prices fell 1.3% for the day despite East Coast gas stations the world s largest economy running dry amid the continued shutdown of a major pipeline. Germany s 10-year borrowing cost jumped to its least negative since March 2020 above -0.16%, and 10-year UK Gilt yields added 10 basis points for the week so far at 0.85% per annum. Copper rose to yet another all-time high, more than doubling from this time last year, while iron ore jumped another 5% to set its own new records.
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Silver prices left behind in the green investment narrative
The green agenda has lifted prices across the metals sector.
To what extent it has driven physical demand rather than sentiment-driven investor activity in the form of exchange-traded fund (ETF) buying, stockpiling or exchange position building is debatable. It’s more of the latter than the former, we would suggest, as the main physical driver for metals remains electrification in transport. As a percentage of the whole, that remains relatively small.
But one important metal in the sector that has yet to see the same support this year is silver.
Silver price trends