china buying silver: $30-40/oz by 2006

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Dear Bill,
My friends tells me that the European fund which bought 250 millions $ of silver is expecting a price target of $30 to $40 an ounce by the end of 2005 and at the most mid 2006.

He also told me that his financial institution's analysts estimate from various resources that China bought 2005 silver futures (options) worth 75% of the expected 2005 annual production.

I thought you might find it interesting. If it's true, the latter is mind-blowing information.

Thank you for all the work
GATA's Mid East Intelligence Network

Some more input from the same source:

Hi again
I think the movement of silver to the front line and your promotion of buying and demanding delivery are two very smart moves. Can’t do it from hear so bought 20K ounces on the spot market to add some pressure and also send letters to all. I find it hard to believe they can ignore thousands of letters. Maybe it’s possible to launch a law suit against the FSTC and Comex directors (or even write in your site that is being considered by GATA lawyers) for allowing such a gargantuan amount of naked shorts. Well, just a thought meant to increase the pressure. I’m sure you thought about it.

My friend tells me there is no way he can get any serious amount of physical silver for his big clients. They put 4 people to search the world market on behalf of China and couldn’t find much. Only small quantities for the small investors are available, most probably to keep the illusion going on for a while longer. The giant buyers can only turn to the futures and options markets now.
Thanks
GATA's Mid East Intelligence Network

More confirming news about China and silver:

Bill,
Have you seen the fantastic news in the most recent issue of Barrons (Feb 9, p. 28)? Here is a brief summary.

In an interview with Steve Leuthold, a 40-year investment professional, who runs the $500 million Core Investment Fund, Leuthold was quoted as saying the following when asked about China and its insatiable appetite for metals:

"We aren't buying futures contracts on the metals; we are actually buying stuff and storing it in warehouses. Not leveraged, either. Zinc and nickel and lead and copper and aluminum. We have never done something like this."

When asked "How do you do that?" he replied.

"It is very complicated. We did this initially in September. We are working through Cargill, which is about the biggest commodities firm in the world. They have helped us engineer this trade through the London Metal Exchange, where we are storing our 5,000 tons of lead. We look at this as a two-to-three-year play on China demand, and also as a hedge on inflation. Plus, it is a hedge against a run on the dollar".

He continues, "But the primary reason we're doing it is the increase in demand for industrial metals, particularly from Asia. We don't own gold. We own silver, because 40% to 45% of its application is industrial. And, we have a small bit of palladium in the package because it is used in catalytic converters."

Now, if Cargill is actively promoting this type of investment for the metals, this could be a HUGE development! If other large investment funds are participating like Mr. Leuthold, one can only imagine how much upside appreciation potential there is for silver, gold and many other metals.

Keep up the positive news flow.
Best Regards,
Matthew