Bedford Report...Silver Producers Remain Safe Even as Commodities Market Stumbles
NEW YORK, NY -- (Marketwire) -- 05/06/11 -- After touching 30 yearhighs recently, the price of silver has plummeted this week after Comexoperator, CME Group boosted margin requirements for new speculativepositions by 84 percent. Following silver prices lower, producers havetaken a hit as investors worry that miners will be unable to postexpected revenues. The Bedford Report examines the outlook for theSilver Market and provides research reports on First Majestic Silver Corporation (NYSE: AG) and Pan American Silver Corporation (NASDAQ: PAAS). Access to the full company reports can be found at:
www.bedfordreport.com/2011-05-AG
www.bedfordreport.com/2011-05-PAAS
Several marquee silver producers forecasted a drop in silver prices andtook necessary precautions such as selling several mining sites. Manycompanies also increased hedging. Hedging programs allow producers tolock in current silver prices for future production, guarding againstany potential price declines in the future. Banks which execute theseforward sales borrow silver from the spot 
,which reduces the physical supply of silver temporarily. Analysts warnthat an increase in hedging could be taken as a bearish signal forsilver prices as it directly increases selling pressure in the market.
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The World Silver Survey 2011 report produced for Washington's SilverInstitute noted that last year saw a dramatic return to net producerhedging, with 61.1 Moz added to the global hedge book -- a volume justshort of the 1997 record high.
Unlike many industry heavyweights, Pan American Silver says it willcontinue to maintain a no precious metals hedging policy. The companyadopted this policy because it believes that limiting the upside ofsilver revenues "goes against the very principle of its existence."
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