Silver Standard Resources Inc. NSC: SSRI CVE: SSO Message Board

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Gold/Mining/Energy : Silver Standard Resources Inc. NSC: SSRI CVE: SSO

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To: Stephen O who wrote (138)	12/26/2001 2:24:22 AM
From: Robert J Mullenbach	of 165

Silver soars NEW YORK (Dec 22) - Silver prices jumped Friday in what traders described as a supply squeeze ahead of the four-day Christmas holiday market closure. At the COMEX, silver led precious metals higher in thin, pre-holiday trading. Silver for delivery in March closed 7.2 cents higher at $4.472 an ounce, trading at its highest levels since Oct. 12. Prices stayed supported by a relentless rise in lease rates for silver bullion, dealers said. One-month silver lease rates spiked to around 27 percent late on Friday, their highest since severe tightness brought on by a massive 130-million-ounce silver purchase by billionaire U.S. investor Warren Buffett in 1997 and 1998. There has been no clear indication of who is behind the squeeze in recent weeks, which has inverted silver forwards from their normal contango structure to backwardation, a situation where spot prices are higher than forwards. "It's a genuine squeeze," said a dealer at a large metals trading operation. "The people who know aren't talking, and the people who don't know are talking more than than they should. I'd be happy to admit that I don't know." In a backwardation, speculators can earn the difference between low U.S. interest rates and high silver yields by buying the metal at the forward discount. Silver's buoyancy carried over to gold. February gold closed $1.80 higher at $278.30 an ounce, ignoring more weakness in the euro currency on Friday. A weaker euro typically weighs on gold prices by making dollar-denominated precious metals less attractive to European consumers.

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