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U.S. Mint Sales of Silver Coins Reach Record in 2013 First Half

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Today’s AM fix was USD 1,366.00, EUR 1,019.86 and GBP 874.91 per ounce. 
Yesterday’s AM fix was USD 1,378.50, EUR 1,030.35 and GBP 880.32 per ounce.

Gold is marginally higher today but remains near the lowest level in four weeks, as a liquidity driven rally in stocks and investor caution over the Federal Reserve’s monetary policy is contributing to a nervous gold market. 

 
Silver in USD, 3 Year – (GoldCore)

Fed Chairman Ben Bernanke said last month the bank could scale back its $85 billion monthly bond purchases if the U.S. economy strengthens, but a lack of clarity on the timing has unsettled markets. A policy statement from the central bank will be released today after its meeting.

Expectations are that the Fed may scale back its extremely unusual $85 billion per month debt monetisation programme to $60 billion a month and continue with near zero interest rates. 

Both of which would be bullish for gold.


Cross Currency Table – (Bloomberg)

It would be very bearish for gold and silver if Bernanke was to indicate that bond buying would be phased out completely and interest rates allowed to rise to historic norms. However, given the very fragile nature of the US recovery, a return to conventional monetary policies is not going to happen any time soon.  

The US economy remains massively indebted and the fiscal situation sees little sign of improving. Many states are on the verge of bankruptcy. 

This is leading to continuing very robust physical demand from investors and store of value buyers internationally and in the U.S.

This demand can be seen in the lack of liquidations in the silver ETFs by investors and speculators, and by continuing store of wealth demand for silver coins and bars.


Total Known ETF Holdings of Silver

CME is catering for the demand by introducing a 1,000 ounce physical silver futures contract “due to demand from customers”.

“The smaller size will provide market participants with greater flexibility to manage their silver price risk, and serve as a more cost-effective tool for individual investors or others looking to hedge against economic uncertainty.”

The CME said it is deliverable against existing benchmark silver futures contracts.

Sales of silver coins by the U.S. Mint have set a record high in the first half of 2013 seeing the best start to a year ever. Silver bullion coins were first offered in 1986.

Falling prices and concerns about being able to take delivery of coins amid continuing concerns about the US economy and currency debasement have led to the record demand.

Sales in 2013 have reached 24.03 million ounces and demand reached a monthly all-time high of 7.5 million ounces in January.

Demand remains at an “unprecedented level,” and sales of gold and silver coins may reach an annual record this year, Richard Peterson, the acting director of the mint, said on June 5. 

Silver coin sales were suspended in January for more than a week because of a lack of silver inventory. In April, purchases more than doubled from a year earlier after prices tumbled 16% in two days due to unusually aggressive selling on the futures market.

Silver futures have declined 28% this year in New York, the biggest loss among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index but the smart money is continuing to accumulate on the dip.

The death of the gold and silver bull markets is greatly exaggerated as seen in the still very robust physical demand from investors and store of value buyers internationally including the U.S.

Bull markets do not end in a period of sustained record physical demand nearly two years after prices have “peaked”. 

This strongly suggests that silver’s bull market is far from over. Silver has gone from being massively undervalued in the early 2000’s to being fairly valued today. Bull markets end in speculative manias with mass participation by the public and blow off tops where prices become massively overvalued as seen in 1980. 

This was clearly seen in 1980 when silver rose from $6.08/oz on January 2nd 1979 to $50/oz on January 21st 1980 or more than eight fold in less than 13 months.

This has not happened with silver yet. Most of the public does not even know the price of an ounce of silver, let alone its value and how to own it. Silver remains gold’s very poor cousin and gets little or no media attention.


Gold Silver Ratio (Quarterly, 1950 To Today)

The parabolic spike led to the gold silver ratio collapsing to 17 to 1 ($850 oz / $50 oz). We expect a similar outperformance and parabolic final price move in silver and it is likely that the gold silver ratio will revert to its long term historical average, seen throughout much of history, below 20 to 1.

Bull markets almost always see prices rise to above their inflation adjusted highs. Sometimes prices rise to multiples of their previous inflation adjusted high.

Silver’s inflation adjusted high was $130/oz and we continue to see that as a realistic long term price target. Given silver’s volatility, dollar, pound or euro cost averaging into position remains prudent.

Similarly, when prices have had a parabolic gain - dollar, pound or euro cost averaging out of a position will be prudent as it will be nigh impossible to time the top.

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Wed, 06/19/2013 - 17:53 | 3673302 Darth Stacker
Darth Stacker's picture

2 months waiting for my 100 oz. bars from JM Bullion. Bear market....right!

Wed, 06/19/2013 - 17:20 | 3673144 Moe Howard
Moe Howard's picture

Lead has the best return of all, in bullet form.

Wed, 06/19/2013 - 17:09 | 3673114 DowTheorist
DowTheorist's picture

While physical is scarce and in high demand, its paper peers are struggling, as today the primary bear market for paper gold and paper silver was reconfirmed. Technically paper gold and silver are at a very difficult juncture as explained here:

 

http://www.dowtheoryinvestment.com/2013/06/dow-theory-update-for-june-19...

Wed, 06/19/2013 - 15:14 | 3672642 cynicalskeptic
cynicalskeptic's picture

Odd how ZH no longer appears as one of my 'MOST VISITED' on Chrome - despite being used as much or more than the other listings.......    more managing media exposure by TPTB?

 

Wed, 06/19/2013 - 15:29 | 3672718 SAT 800
SAT 800's picture

Chrome is a terrible browser; it's a corporate spying tool for Google; and god knows who else. Switch to Firefox.

Wed, 06/19/2013 - 15:20 | 3672673 Boxed Merlot
Boxed Merlot's picture

Throw it on your favorites bar.  Who cares anymore?

Wed, 06/19/2013 - 14:36 | 3672396 A. Magnus
A. Magnus's picture

Stackers - Don't forget the proper 'base metal' ratio to safeguard your PMs, 5oz of LEAD available for immediate delivery for every ounce of PMs you stack before your tragic boating accidents...

Wed, 06/19/2013 - 17:41 | 3673263 GubbermintWorker
GubbermintWorker's picture

Have a good supply of lead in the form of double 00 shot, 9mm, .223, .357mag, .38spcl, and a copious amount of .22lr :)

Wed, 06/19/2013 - 15:18 | 3672666 Boxed Merlot
Boxed Merlot's picture

 the proper 'base metal' ratio to safeguard your PMs...

 

 

If Wells Fargo didn't invent the term "riding shotgun" back in the day, they certainly made it an art form. 

(It's probably something zazzle would object to if billy7 conjured it into a collectible)

Wed, 06/19/2013 - 14:08 | 3672223 luckylongshot
luckylongshot's picture

If you are one of those investors who look for inefficient markets what a fantastic opportunity exists here. Not only is there a mismatch between physical demand and paper price, but the supply of silver ends in 8 years and to trump all that the clowns on the other side include governments, a group famed for their ability to get cleaned out every time they play in the market.

Wed, 06/19/2013 - 13:24 | 3672010 nope-1004
nope-1004's picture

 

 

My belief is that the current pricing mechanism is totally broken, so pricing todays PM's in reference to a bit 'freer' market time of the '80's is not an apples-to-apples comparison.

The FED owns all aspects of the economy and financial markets today.  It is a complete tragedy that the ETFs and COMEX / LBMA price manipulations are how we base current value of PM's.

And it is painfully clear that Bernanke and the FED have their fingers in these markets, otherwise the USD is toast.  One day it will be anyway, but the sheer audacity by TPTB to smash price and the complete apathy by the public to do nothing is most upsetting.

Anyone with half a brain knows that the May 2011 price smash of Silver on that Sunday evening in the thinly traded Asian market, when Osama Bin Laden was "found", was not a coincidence.  This is top level gov't intervention, which leads me to believe that NO proper price discovery will be realized until the entire USG falls.  And one day it will.

 

Wed, 06/19/2013 - 14:36 | 3672397 SilverRhino
SilverRhino's picture

Selling the house and buying silver here.   Depression ... it's GOING to happen. 

 

Wed, 06/19/2013 - 13:18 | 3672002 KingdomKum
KingdomKum's picture

we few,  we happy few,   we band of silver holders  .  .  .    

Wed, 06/19/2013 - 15:31 | 3672723 SAT 800
SAT 800's picture

Indeed.

Wed, 06/19/2013 - 13:11 | 3671972 apberusdisvet
apberusdisvet's picture

I'm waiting for a buyer of a large amount of silver for a specific industrial use to declaim publicly that he can't get it on the open market.  We've heard anecdotally that BMW is hoarding; how many more are there?

Wed, 06/19/2013 - 14:32 | 3672371 A. Magnus
A. Magnus's picture

Apple computer and its Foxconn subsidiary in China recently started hoarding silver because of market availability issues...BULLISH!!!

Wed, 06/19/2013 - 13:03 | 3671937 SILVERGEDDON
SILVERGEDDON's picture

I am a huge believer in alchemy.

Every fucking day, I try to turn paper FRN's into gold, silver, copper, lead, and brass. 

And, you know what ?

IT REALLY DOES WORK !!!!!

Buy the fucking dips, Bitchez.

Train's a coming, and the economy is stalled on the tracks.

 

Gonna be one fuck of a smash - up.  

Wed, 06/19/2013 - 13:35 | 3672087 fortune114
fortune114's picture

I make everyone laugh when leaving resturants now, paying with a FRN:  "All they wanted for that excellent meal was piece of paper printed by the U.S. Gov't based on nothing, created out of thin air, signed by a tax cheat.  I wonder how long that's going to last."  They think it's a joke.  But I'm serious!   

Wed, 06/19/2013 - 15:44 | 3672770 SAT 800
SAT 800's picture

I sometimes do the same thing at the grocery store, or the gas station; I'm usually met with a semi-puzzled smile; they can tell it's a joke, but they can't tell who it's on. I also have a lady here who likes to sell me gasolene or diesel fuel for a silver quarter; every once in a awhile she asks me if I have any more of those; I always say "No. I haven't run into any lately". Some day she'll get plenty of them. A quarter still buys a gallon of gas. just like it did when I got out of high school in 1960; must be a co-incidence, I guess.

Wed, 06/19/2013 - 17:34 | 3673225 SafelyGraze
SafelyGraze's picture

restaurant workers don't know about money or about the food they serve

maybe that "chicken filet" is made from a chicken breast. 

maybe it is meat slurry http://en.wikipedia.org/wiki/Meat_slurry

so you ask the nice wait person

and they say, "it's boneless"

and you say, "it's boneless .. *what*"

and they say, "it comes with lettuce, tomato, and special sauce"

and you say, "is it a boneless chicken *breast*?"

and they say, "it's a chicken patty. would you like that in a combo meal?"

sure. what the hell.

and I'll have the Frozen Chocolate-style Summer Beverage, please. 

doesn't even matter what's in there.

 

Wed, 06/19/2013 - 13:16 | 3671987 Paper CRUSHer
Paper CRUSHer's picture

+1

.............the ZH audience resoundingly applaudes.

Wed, 06/19/2013 - 12:58 | 3671915 GoldCore
GoldCore's picture

We could not agree more

Wed, 06/19/2013 - 12:57 | 3671913 Midasking
Midasking's picture

If QE is stopped a depression like never before will happen overnight.  Rates will rise putting a BK sign up on the FED and US Gov.  Gold and silver are an asset that isn't simultaneously someone else's liability which would very helpful in a situation like that.  http://tinyurl.com/mem7o7x

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