it will be monetary (investor) demand for silver and gold that will put an end to the games on the comex. for the past year we have been seeing signs of strain in the market for silver and gold coins as premiums have soared. the us mint cranked out more than 7 million silver eagles in the first quarter of 2009, and they are still selling for $3+ over the spot price. even bars, rounds, and pre-1965 junk silver coins sell for $1.50-$2 over the spot price. common 1-ounce gold coins sell for $100 over the gold price. the central fund of canada (cef) sells at a 19% premium to its bullion holdings.

investors are willing to pay these premiums because they know there is a shortage of physical bullion that can only be masked for so long. the last estimate i saw for silver bullion is that investor demand will increase from 100 million ounces in 2008 to 180 million ounces in 2009. if so, that extra 80 million ounces has to come from somewhere, and i don't know where they are going to find it.