dinsdag 9 september 2014

Shanghai Silver Inventory Vs. Shanghai Silver Premium

There is a negative correlation between the Shanghai Silver Inventory and Shanghai Silver Premium to London Silver Spot Price.

Whenever the Shanghai silver inventory drops, this indicates that China is running low on silver, which means it will need to pay more money to get its hands on silver from the Western market, resulting in higher premiums between Shanghai and London.

For example, the peak in inventory in March 2014 (Chart 1) coincided with the bottom in silver premiums (Chart 2: blue line). The record low inventory in September 2014 coincided with the record high 11% silver premium.

Chart 1: Shanghai Silver Inventory
Chart 2: Shanghai Silver Premium

If you want to monitor the weekly inventory of silver at the Shanghai Exchange, you can go here.

Click on "weekly inventory" (by the way, these are real physical inventories, not imaginary inventories from the LBMA).

For example: 5-Sep-2014: Inventory of silver is 93304 kg.

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