Worldwide Silver Shortage Pushes Premiums to 40% on Silver Eagles [goldstockbull]

COMEX silver prices once again dipped below $23 today. My previous article entitled Ignore COMEX Pricing – Silver Eagles Sold Out at Dealers, $33 on Ebay detailed just how divorced from reality the COMEX price has become. So with another dip today, I decided to try to get my hands on some more silver coins. I realized before I picked up the phone that it would be difficult, but I have a few dealers in Colorado and California that have consistently been able to find supply at reasonable premiums.

Not anymore. The first phone call that I made was to one of the largest bullion dealers in Southern California, where I have bought a good deal of my physical gold and silver over the past decade. In fact, I had just bought several rolls of silver eagle coins from them last month at around $2.65 over spot price per ounce. I also purchased some for a family member back in January and paid the same premium.

In the past when some analysts were talking about a supply shortage and rising premiums, I was always able to find supply from this particular shop with a reasonable premium that was never more than 10% over the spot price. But today I was told that I could only order for future delivery at some point in late May or June and that the premium was $5 over the spot price.

In just the past few weeks the premium has nearly DOUBLED, despite the silver price dropping sharply and investor sentiment supposedly at multi-year lows. The manager of the shop told me the silver shortage was worldwide and it was more difficult than ever to secure supply and keep up with demand.

Read more

US Mint Sells Most Coins Ever In First 4 Months [goldsilverworlds]

The buying frenzy in the physical market continues. One of the leading indicators, at least for retail and part of wholesale investors, is the US Mint. We have been reporting updates on a regular basis: Q1 2013 US Silver Eagle Sales Beats All Records , US Mint Sold Exceptionally High In January & February and in other articles.

Time for another update. While April has not been completed, with a bit more than a week to go, the sales reports again beat all previous years. We have created the following overview which shows the sales of the US Mint gold and silver coins year-to-date (except for 2013 which is not complete).

Read more

The Truth Rises – Coordinated Strikes Work Both Ways – May 1st 2013

Silver Update 4/16/13 Force Majeure

RCM Rationing 2013 Silver Maple Leaf Bullion Coins [coinupdate]

Amidst a surge in demand, the Royal Canadian Mint has started rationing 2013 Silver Maple Leaf bullion coins at the primary distributor level. This follows the news earlier this month that the United States Mint had temporarily sold out of their 2013-dated silver bullion coins after receiving orders for more than 6 million coins and would begin rationing supplies as soon as sales resume.

Less information is known about the silver bullion coin situation in Canada, as the RCM does not publicly report sales levels outside of their required financial filings. A representative for the Mint did confirm that coins are currently being allocated.

Alex Reeves, Senior Manager of Communications at the Royal Canadian Mint provided the following statement:

Due to very high demand for SML coins, we are carefully managing supply to ensure all our distributors are served and we continue to take orders.  We do not disclose details of any customer transaction and specific 2013 numbers will be made available at our regular reporting intervals later in the year.

 

Read more

US Mint Out Of Silver Coins – Suspends Sales [zerohedge]

As we noted earlier this month, the demand for both gold and silver ‘physical’ coins has been record-breaking as 2013 began. So much so, that now after selling over 6 million silver coins in 2013 so far, the US Mint has run out of silver eagles and has suspended sales. Furthermore, the Mint is saying that it will not restart sales until January 28th! With all asunder proclaiming victory and crisis averted based on the nominal price of stocks at five-year highs, Swiss interest rates no longer negative, and Spanish bond yields at 5%, it seems there are still a few that demand the wealth-preserving safe-haven of hard assets as the escalation of the currency wars shows no sign of abating.

Read more

December 2012 American Eagle Silver Coin Sales 3rd Highest in History [mineweb]

he U.S. Mint reported annual American Eagle gold bullion sales dropped in 2012 from 1 million ounces in 2011 to 753,000 ounces last year.

However, December 2012 gold sales increased to 76,000 ounces, up from 65,500 ounces in December 2011.

Annual sales of American Eagle silver bullion coins totaled 33,742,500 ounces in 2012, down substantially from the sales of 39,868,500 ounces in silver bullion coins reported by the Mint in 2011. Nevertheless, December 2012 American Eagle silver bullion sales were the third highest in the Silver Eagle’s history.

Read more

China’s Major Role in Silver Explained [silverinvestingnews]

The structure of the silver industry in China is almost unrecognizable from the situation 20 years ago, a new reportfrom Thomson Reuters GFMS states. In 1990, China was a relatively small player in silver. Now, the nation is responsible for 17 percent of global demand and produces 14 percent of the world’s silver. GFMS’ latest research reveals that China’s expanding role in the silver market has been driven by the liberalization of its silver industry and over a decade of economic growth.

After the revolution in 1949, gold and silver mining did not feature in the People’s Republic’s economic planning, GFMS explains. Investment in the industry was limited and private trading and personal ownership of the metals was forbidden.

China’s low level of silver production in the early 1980s raised concerns among State Council members, who decided that local production needed to expand in order to support industrialization and move the country toward self-sufficiency.

In 1983, regulations that covered the various aspects of the silver and gold industries, from production to export, were rolled out. The People’s Bank of China (PBOC) was granted monopolistic authority to set prices and buy and sell silver.

That initiated the rise of China’s silver production, which resulted in China becoming a surplus producer by the end of the 1980s. Production surpluses continued in the 1990s, and by 1997, the PBOC realized state stocks were more than sufficient for China’s fabrication needs.

Authorities eventually came to see silver as a metal with which to test deregulation. Exploratory sales from state stocks began in 1998. In 2000, an official trading platform was designated and China’s monopoly on silver ended.

China’s silver supply

China is now the third-largest producer of silver after Peru and Mexico.

Read more

Should Student Debtors Buy Silver? [SilverVigilante]

Nearly 1 and 5 households carry student debt.  Pew Research from earlier in the quarter showed that 22.4 million households, or 19 percent, held college debt in 2010, doubling the 1989 amount, and increasing 15 percent since 2007. That means the biggest three-year increase in student debt in more than two decades.  Any of those student debtor households buying either gold and/or silver per a “defensive financial portfolio” aimed at lessening the hazard of “personal economic warfare” would be much better off than one whose portfolio did not even maintain purchasing power.

Let’s say that the average student loan interest rate is about 8%.  The official average student debt rate is about $26,000, but let’s assume for our thought experiment the real one is like, say, $40,000.  Silver, since its price in 2002 of about $5 (not even), has risen in value well above 500%, meaning at least 50% gains each year.  One who has maintained a bank account, to be conservative, has gained, let’s say, 1.5% on their deposits, while monthly inflation in 2012 sat officially between 2-3%. That means a 2002 college graduate with, say, $10,000 saved in silver and $40,000 in student debt, could have -this decade- not only paid of their principal, but also had $28k left over, while one who had not invested in silver would have had to forgo a world of consumerism and impose self-austerity measures.

That is, in 2002, when 1,000 ounces only cost $5,000, our thought experiment subject could have purchased 2,000 ounces of the devil’s metal.

Read more

Silver Demand Rolls On [silver-coin-investor]

Industrial Demand

Unlike gold, silver is an industrial commodity. The basic scientific properties of silver make it a candidate for use in an ever-growing variety of devices and applications, from computer chips to solar power generators.

Because silver is an industrial commodity, it is a candidate for an industrial shortage. The world’s industrial consumers hold little in the way of silver inventories, thanks to just-in-time inventory and production practices.

As we’ve discussed elsewhere on this site, 70% of silver production comes as a byproduct to other types of mining, such as copper, lead and zinc. The mining industry is simply incapable of keeping up with the current demand for silver.

Given that we already have a widespread retail silver shortage, a wholesale shortage is likely as well. When industrial users face delays in silver shipments they will panic and attempt to build inventories all at once. This situation unique to silver—it does not apply to gold.

In the current financial crisis, there is a profound and very powerful advantage to silver being an industrial commodity. The mainstream has forgotten about silver as a monetary metal. The new generation, and possibly even you, has only a fleeting association between silver and value.

Read more

New Silver Trading Platform Planned in Hong Kong [silverinvestingnews]

The Chinese Gold & Silver Exchange Society (CGSE) foresees a bright future for silver in Hong Kong and is making moves to play a bigger role in that future. Last week, the CGSE hosted its first Annual CGSE International (Silver) Conference, at which President Haywood Cheung spoke about the Loco Hong Kong Silver Contract, a new trading platform that the society plans to launch in the first quarter of 2013.

The CGSE is a metals market participant whose history dates back to 1910. A Reuters article notes that in addition to playing a major role in Hong Kong’s gold market, the society “currently offers electronic trading for Loco London gold and silver, which are denominated in U.S. dollars, and the Renminbi kilobar gold.”

Read more

Obama Bullish for Silver? [silverinvestingnews]

November 6, a day that created much uncertainty, has come and gone. Americans went to the polls and re-elected President Barack Obama for another term. But the nation’s leader is not the only thing that has remained unchanged — investors are still asking what will happen to silver and why.

The close race for the US presidency clearly reveals that not everyone supports Obama as America’s leader. However, it is widely believed that he is the best choice for silver investors.

One of the only true things that Obama said during his campaign was that he inherited a lousy economy, according to Peter Schiff, CEO of Euro Pacific Precious Metals.

“If Obama thought the economy he inherited was lousy, wait until you see how lousy the economy is going to be that Obama’s successor inherits … it is going to be much worse,” Schiff said in a post-election video blog.

Schiff predicts that a crisis will erupt in the US before the end of the president’s second term and said he foresees inflation wiping out those with wealth and dollar investments. He urged people to position themselves now for that event by purchasing gold and silver.

Inflation is one of the primary reasons an Obama re-election is considered bullish for silver.

With the Obama administration comes a Bernanke-led Federal Reserve. With the reins of the US economy held by two leaders who are widely considered reckless in their handling of money, many believe the next four years will hold wild spending and borrowing coupled with large-scale money manufacturing.

Remember that QE3 was the most anticipated market event of the year. Each round of this type of monetary policy, including the latest, has, to the delight of investors, driven up silver prices. However, for some silver investors what is more important is that the longer quantitative easing is underway, the more expectations of inflation will build and the closer many will perceive the demise of the US dollar to be. That is an event that is expected to be even more bullish for silver.

Read more

Silver prices may climb as much as 38% in 2013 – GFMS

HONG KONG (REUTERS) -

Silver prices may rise as much as 38 percent in 2013 from current levels, as a weak global economy spurs safe-haven demand for the precious metal, the global head of metals analytics at GFMS, a Thomson Reuters unit, said on Wednesday.

Spot silver has gained more than 17 percent so far this year, outstripping a rise of 10 percent in gold, and setting course for its third yearly rise in four. Silver was trading at around $32.50 per ounce by 1020 GMT.

“Strong investment demand, higher gold prices on the back of monetary easing, rising inflation expectations and the persistence of ultra-low interest rates,” are among the factors that will lure buyers to the safety of silver, Philip Klapwijk, said on the sidelines of a conference in Hong Kong.

“We are thinking prices will trend higher next year. I’m not convinced that we are going to $50. I think we will definitely see $40 to $45 prices.”

Evidence of strong investment demand is shown by an increase of 4.5 percent this year in holdings on the largest silver-backed ETF, New York’s iShares Silver Trust.

Klapwijk also noted a limited growth in jewellery demand, particularly in the emerging markets.

Read more

Silver Manipulation Explained In A Simple Way By Ted Butler [goldsilverworlds]

The month of October marked the highest amount of Silver Eagles sales over the past five years. One could ask why the price of silver was coming down from its peak early October. Of course part of the answer lies in the fact that Silver Eagles are not the only form of silver bullion. But there have been numerous examples in the past where the demand for physical silver was increasing while its price was decreasing, as described by Jeff Nielson amongst many others.

The point is that the traditional law of demand and supply don’t always work especially not in the silver market. The central points is this: the price of silver is mainly determined in the futures market. That’s a totally different story than how the mainstream media is reporting it. The typical explanations we hear in the media: a worse than expected unemployment report caused a flight to gold and silver as safe havens, or better than expected GDP figures caused investors to get out of precious metals. The truth is different.

Now one of the true experts in this matter is Ted Butler. He is not only respected because he is in the precious metals markets for more than three decades but also because of his tremendous inside knowledge. His analysis goes to the heart of the price setting: the Commitment Of Traders reports. Based on years of in-depth analysis, he came to the conclusion that the price of silver is manipulated and he is best positioned to explain himself why and how this manipulation happens. Although he believes that the manipulation has a strong short term effect, he is convinced that the longer term price is controlled by the increasing demand for physical silver. So yes the future looks bright, although there is uncertainty in the very short term price setting.

Read more

GERMAN CALLS FOR GOLD REPATRIATION INTENSIFY AS FED REFUSES TO ALLOW INSPECTION [SilverDoctors]

Calls for Germany to repatriate its 1,536 tons of gold reserves held at the NY Fed are intensifying as Der Spiegel reports the Federal Reserve has refused to allow German inspectors to even view the country’s massive gold reserves “in the interest of security and of the control process“.

We have stated repeatedly that with repatriation and/or audit requests completed or in progress by Venezuela, Germany, Switzerland, and the Netherlands, The BOE and the Fed suddenly find themselves in a heap of trouble as the situation (and confidence that the Central banks actually still hold the tungsten gold reserves on deposit) is rapidly deteriorating. 
More on the Fed’s non-compliance with German requests to view/inspect their own gold below.

Der Spiegel reports that nearly half of Germany’s entire gold reserves are still held (supposedly) 5 floors below the NY Fed:

The Federal Reserve Bank of New York continues to hold 1,536 metric tons of German gold — or nearly half of Berlin’s reserves. This enormous hoard of gold is stored in the fifth subfloor of the bank’s building on Liberty Street, 25 meters (80 feet) below street level, and 15 meters below sea level. According to the bank’s website, the vault rests on the bedrock of Manhattan Island.

Read more

David Morgan chats about manipulation in the silver market (Industry Watch)