Is there enough silver? The real story in silver is the physical squeeze | Kitco News Excerpts:
Even after silver prices pulled back from eight-year highs last week, strong demand in the physical market remained. Usually, when the market sees a significant increase in demand for physical metal, bullion dealers run out pretty quickly. "We are still seeing that," Feeney said.
And the more demand there is, the longer the delays will be as refineries fall behind. "Also, you often see refineries limit their production to one standardized size and stop producing 10-ounce bars or 100-ounce bars and focus on kilobars."
But, does this new demand translate to higher prices, and how soon? Feeney noted that it is a long-term bull play with a time period of about 12-24 months. He also added that silver could see the same bull rally as palladium.
"If you think of silver like palladium. Silver is an industrial metal that gets used up in solar panels and so forth. So, moving forward, if we continue to see a really strong increase in investment demand combined with strong fundamentals in industrial demand, quite quickly you could see the physical market dry up," Feeney warned.