Gold (NYSE:GLD) and silver (NYSE:SLV) closed higher on Monday as the Dow (NYSE:DIA) continued it?s downward spiral. ?The S&P 500 (NYSE:SPY) and Nasdaq (NASDAQ:QQQ) also closed lower on the day. ?Recently, we?ve discussed how there was been some interesting developments in the physical precious metals space. ?Let?s take a look at the mounting physical pressure for silver, and its current technical channel it?s been trading in.
The Comex (NASDAQ:CME) has been experiencing a dwindling supply of silver due to reclassifying of holdings from Registered (physical) to Eligible (non-deliverable). ?For example, last week Scotia Mocatta reclassified more than 1.4 million ounces of silver from Registered to Eligible. ?Now, the silver drain at the Comex continues with HSBC (NYSE:HBC) reclassifying 438k ounces of silver from Registered to Eligible status. ?The total physical supply (Registered) of silver at the Comex is about 28.7 million ounces. ?This is a 30% decrease when compared to the silver holdings during April. ?To add insult to injury, the U.S. Mint has reported all-time record Silver Eagle coin sales through May this year.
The chart below shows that although silver had a large pullback in May, this pullback was due to a short-term blow-off top in the price of silver. ?The overall upwards trend is still intact, and given the fundamental supply issues coming to surface, we see silver hitting our higher price target soon. ?To find out how much higher and when, check out our Gold & Silver Investment Newsletter and avoid buying when these blow-off tops occur.
ETFs such as the EFTS Physical Silver Shares (NYSE:SIVR), iShares Silver Trust (NYSE:SLV), and ProShares Ultra Silver (NYSE:AGQ) rallied. ?Miners (NYSE:SIL) such as Great Panther Silver (GPL), First Majestic Silver (NYSE:AG), Endeavour Silver (AMEX:EXK), Goldcorp (NYSE:GG), and Barrick Gold (NYSE:ABX) failed to shine on Monday.
For more analysis and guidance in the white hot precious metals sector, consider a free 14-day trial to our acclaimed Gold & Silver Investment Newsletter.
Disclosure: Long AGQ.
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