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February's Strange Divergence In Precious Metals

Tyler Durden's picture


February has been an odd month for precious metals to say the least. On-again, off-again fears of Bernanke removing the punchbowl (and endless sell-side strategists discussing Great Rotations and the end of the gold cycle) have led to prices for gold and silver sliding notably. However, while all this price deterioration has been going on, demand for physical gold and silver has surged - entirely disconnecting from January's apparent demand-to-price correlation - and Silver set to break all-time record demand highs for a February. We know who was buying in January, as Reuters reports Russia and Turkey were significantly adding to their bullion reserves; and while the divergence between demand and price coincided with Chinese New Year - leaving a large marginal buying nation on the sidelines - we suspect the drop is more to do with hedge fund reflexive selling - now caught offside. It seems at least one smart player was using lower prices to build their stack; manipulation or no manipulation.


Cumulative demand for Gold vs Spot price... (corrected)


Cumulative demand for Silver vs Spot price (corrected)


and this month looks set to see the biggest demand for silver (for a Feb) ever...


Source: Bloomberg and US Mint

(H/t Alex Gloy)

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Tue, 02/26/2013 - 15:29 | 3278643 Dr. Gonzo
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Go ahead and fix the charts. I just pulled the pistols on 125 silver maples. 

Tue, 02/26/2013 - 15:47 | 3278735 Glass Seagull
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"Well, can we not scare the fucking gold back into the vaults!?1?!"



Tue, 02/26/2013 - 15:51 | 3278757 thewayitis
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I am willing to bet we have a record February for physical siver sales. You can add my 2 100oz purchases to the chart. Hahaha ....Best to all for the New year.

Tue, 02/26/2013 - 17:21 | 3279234 cfosnock
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We have broken 2011?s February AGE bullion record, current sale are at 3,368,500 oz with two days to go.

Tue, 02/26/2013 - 16:02 | 3278821 Likstane
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I've had enough of ZH today.  I'm going to the coin shop. 

Tue, 02/26/2013 - 16:05 | 3278837 The worst trader
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Tue, 02/26/2013 - 16:11 | 3278857 moonstears
moonstears's picture

Print more gold certs on prettier framable paper (unicorns would add a nice touch), problem solved ala "hedonics".

Tue, 02/26/2013 - 16:48 | 3279041 Dr. Gonzo
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The U.S. Mint just posted 3,368,500oz. I believe we have another record with 2 days to spare. 



Tue, 02/26/2013 - 17:08 | 3279167 thewayitis
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And im sure they bought their silver cheap recently. How much are silver eagles thses days from the mint? Anyone know??

Tue, 02/26/2013 - 17:18 | 3279215 cfosnock
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We have already broken 2011?s February AGE bullion record. The current sale are at 3,368,500 oz with two days to go.

Tue, 02/26/2013 - 19:20 | 3279708 prodigious_idea
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Anyone have a buying experience with Merit Precious Metals in Santa Monica they'd be willing to share?

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