The silver low your silver spoon


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Silver Reach New Low? by Phillip Futures Sdn Bhd Aaron Ang 12Jun2013.

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The silver low your silver spoon

  1. 1. The Silver Low, Your Silver Spoon? Aaron Ang Phillip Futures Sdn Bhd Business Development Executive 12 June 2013
  2. 2. Disclaimer The information contained in these course materials provided contain information of a general nature only and are produced for investor education purposes only. They do not constitute investment advice in any manner whatsoever or have any regard to the specific investment objectives, financial situation or individual needs of any particular person receiving them. Examples are used for illustrative purposes only and do not constitute investment advice. Phillip Futures makes no guarantee, warranties and representations of any kind whatsoever, express or implied, including but not limited to, the accuracy, completeness, merchantability, or fitness for any particular purpose, of such information or as to the results obtained by any person from the use of any information or any financial instrument mentioned in the course materials. There is a substantial risk of loss in trading futures and options, and may not be suitable for all types of investors. The above examples were simplified trading illustrations and do not take into account transaction costs such as brokerage commission. Additionally, the margin amounts are only indicative as they are subject to historical and prevalent market volatility.
  3. 3. Background of Silver
  4. 4. Silver Properties
  5. 5. Silver Properties
  6. 6. Silver Properties
  7. 7. Silver Properties
  8. 8. Silver History as Currency
  9. 9. Silver History as Currency
  10. 10. Silver History as Currency
  11. 11. Silver History as Currency
  12. 12. Silver History as Currency
  13. 13. Silver Usage Breakdown
  14. 14. Silver Usage Breakdown
  15. 15. Silver Usage Breakdown
  16. 16. Silver Commercial Usage
  17. 17. Silver Demand By Country
  18. 18. Silver Supply
  19. 19. Silver Production
  20. 20. Silver Production Source:
  21. 21. Silver Production Cost Source:
  22. 22. Silver Production Cost Source:
  23. 23. Silver Holdings
  24. 24. Silver Thursday
  25. 25. Silver As An Investment
  26. 26. QE to End this Year Slowing Down Money Printing? • Chairman Ben S. Bernanke will probably reduce the Federal Reserve’s monthly bond buying in the fourth quarter to $50 billion from $85 billion as he begins to unwind record stimulus. • The third round of quantitative easing will total $1.18 trillion. So far the purchases have pushed the Fed’s balance sheet to a record $3.32 trillion.
  27. 27. Federal Reserve Monetary Base Emergency 9/11 Subprime Crisis 2008 2.2 Trillion
  28. 28. Possible outcome of QE
  29. 29. China’s Federal Reserve Money Supply Source:Bloomberg
  30. 30. Japan’s Federal Reserve Money Supply Source:Bloomberg
  31. 31. Japan's latest stimulus: What it means and will it work? • Central Bank of Japan will increase its purchase of government bonds by 50 trillion yen ($520bn; £350bn) per year. 10% of Japan's annual GDP. • The main idea behind these bond purchases is to keep long term interest rates low. • This is to try to encourage businesses and consumers to borrow more money. • Or the money doesn’t flow through the real economy like it should, sluggish exports. Source:Bloomberg
  32. 32. Japan’s Initiative for Clean Alternative Energy • Dowa Holdings Co. (5714), Japan’s biggest silver producer, will raise output 40 percent this year to meet solar-cell demand after the 2011 Fukushima disaster crippled a nuclear power plant and sent fossil fuel costs higher. • The country had 26,940 megawatts of clean energy capability at the end of 2012, according to BNEF. Solar accounts for about a third of all renewable energy, according to the data. Source:Bloomberg
  33. 33. Dow Jones and FKLI Source:Bloomberg
  34. 34. Silver/USD Monthly – The Silver Low?
  35. 35. Physical Silver Still in Demand Source: Month One ( oz. / #coins ) January 7,498,000 7,498,000 February 3,368,500 3,368,500 March 3,356,500 3,356,500 April 4,087,000 4,087,000 May 3,458,500 3,458,500 June 782,000 782,000 Total 22,550,500 22,550,500 2013 Silver Eagles Sales Totals (in ounces / number of coins)
  36. 36. Why Silver? Gold to Silver Ratio For every 1 oz of gold, 10 oz of silver is mined.
  37. 37. American Silver Eagles • Sales of American Eagle silver coins in May have dropped 15 percent from the full month of April, according to data on the mint’s website. Sales jumped to a monthly record in January, and the mint suspended business for a week because of a lack of inventory. • Silver futures have tumbled 26 percent this year, the most among 24 raw materials tracked by the Standard & Poor’s GSCI Spot Index. The commodity slumped into a bear market on April 1, partly on concern that industrial demand would ebb.
  38. 38. What is Futures? In short: A standardized contract with predetermined future date and price with obligation to proceed. Source:
  39. 39. TOCOM Silver
  40. 40. Difference of Stocks & Futures Stocks Futures Buy Part ownership in the company Entering into a contract. A contract to purchase the underlying commodity at a certain price in the future. Capital To pay full amount 100% 5%-20% of the full contract value Position Initiate buy position only Initiate Buy/Sell Exchange Bursa Malaysia Stock Exchange Bursa Malaysia Derivatives
  41. 41. Why Trade TOCOM Silver • Low initial margin (RM4000) to start. • Japanese currency now in devaluation • Leverage on a full contract • Hedge against temporary falling prices of Silver • High volume futures Product, high volatility and fast • Different trading time zone
  42. 42. TOCOM Silver • Trading Hours • Day Session 9:00 a.m. to 3:30 p.m. (JST) Night Session 5:00 p.m. to to 4:00 a.m. (JST) • Contract Unit • 10 kg / contract(approximately 321.51 troy ounces) • Delivery Unit • 30 kg (Delivery unit = 3 contract units) • Price Increment • JPY 0.1 per 1 gram
  43. 43. Thank You! Enquiries: Aaron Ang 6082-238633 012-8773365