SILVER

U.S. Securities & Futures Corp.
100 Wall St. NY, NY 10005 Tel (800) 818-9588© Peter Fioti November, 96

FUTURE DEMAND EXPECTATIONS

• Seasonal demands for silver tend to peak around the Christmas season.

• Exports have increased more than 75% over last year.

USE & SUPPLY FACTORS

• Silver is used for it's conductivity and chemical properties in many photographic, high-tech ceramic and electronic devices.
• Stocks of silver for the Comex are at are the lowest levels in 10 years.
• Silver production in recent years has slowed due initially to over supply and declining prices. It is uncertain how quickly production can recover.

TIME / PRICE

• By simply watching a chart, one may see a low in silver's price. By charting silver against the CPI, (An inflationary index), silver's low price becomes even more dramatic exposing a view of a commodity trading at the low end of it's long term range.

• In comparison to the front contracts, the current price is approximately 13 % lower than the 15-year seasonal average.

MARKET VIEW
The number of brokers who bought silver as a hedge or a "million dollar investment idea" are probably innumerable. But silver has not as yet glittered for either of those purposes. In our opinion an investor must understand there are no "sure things" and use only risk capital in the futures markets. In this light we are now looking at very low futures prices. Our research points to a decline in the perceived value of silver, however the factors which gave silver its value in the past have remained relatively unchanged. Considering the near contracts in silver have already traded above $6.00 earlier this year, the decline in stocks and the market's general volatility seem to make a plausible argument that silver could regain at least a portion of that climb if the conditions were right. We feel silver is under valued and seasonally poised for at least a short term bull run. Those who are in a position to assume some risk may find silver an attractive vehicle for long speculation over the next few months.

CONTRACT SPECIFICATIONS Hours ET 8:25- 2:30 Size 5000 troy ounces Quoted ¢/oz. Value .1¢/oz=$5 Daily Limit $1.50/oz Months F,H,K,N,U,Z Initial Margin I $1,890 M $1,400	charts courtesy of Excel Data from Bonneville If you have any questions about futures trading, our firm, or this report please call 1 (800) 818-9588 ext. 220 or mail to Peter Fioti
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