Eagles and Vultures

222
Wed, Mar 13, 2013 - 2:14pm

Just a brief post today concerning a couple of anecdotal demand indicators.

Let's start with Gold and Silver Eagle sales from the U.S. Mint. First, chew on these little factoids that Uncle Ted shared a couple of weeks ago: (https://www.butleresearch.com)

  • In 1986, the U.S. Mint was directed by law to begin minting gold and silver coins. Over those 27 years, The Mint has sold approximately 325,000,000 Silver Eagles.
  • Almost exactly half of those sales have occurred in the past five years alone (2008-2012 = 157,000,000).
  • Annual sales above 35,000,000 exceed the entire annual U.S. production for 2012. (Courtesy of our friend SRSrocco: https://www.financialsense.com/contributors/steve-angelo/2012/01/04/silver-sales-surpass-domestic-production)
  • Annual sales at 35,000,000 represent about 5% of total global mine production for any single year.
  • So, anyway, Silver Eagle sales, though not the be-all-end-all, are clearly a significant force in global silver demand. And where are we with this demand? Let's take a look.

    Year Jan sales Feb sales March sales Total year end YoY %chg

    2008 2,170,000 200,000 1,855,000 19,583,500 +98%

    2009 1,900,000 2,125,000 3,132,000 28,766,500 +47%

    2010 3,592,500 2,050,000 3,381,000 34,662,500 +20%

    2011 6,422,000 3,240,000 2,767,000 39,868,500 +15%

    2012 6,107,000 1,490,000 2,542,000 33,742,000 -15%

    2013 7,498,000 3,368,500 1,601,500 (1-12) proj: 60,000,000 +78%

    For 2008, Q1 sales were 21.3% of total. Q1 2009 was 24.9% and Q1 2010 was 26.0%. Q1 2011 was 23.6% of all 2011 sales and Q1 2012 was 30.0%. So, on average, Q1 accounts for about 1/4 of all annual sales. Also, for the first 12 days of March, total sales are 1,601,500. This projects March 2013 total sales of 4,137,500. Projecting Q1 2013 sales forward gives us a total 2013 sales figure of just above 60,000,000.

    As Ruprecht would say: "That's a lot." That's a 50% increase over the record from 2011 and an 80% increase over 2012.

    Now let's turn our attention to gold.

    Year Jan sales Feb sales March sales Total year end YoY %chg

    2008 26,000 27,500 50,000 860,500 +334%

    2009 92,000 113,500 136,500 1,435,000 +67%

    2010 85,000 84,000 102,000 1,220,500 -15%

    2011 133,500 92,500 73,500 1,000,000 -18%

    2012 127,000 21,000 62,500 753,000 -25%

    2013 150,000 80,500 26,000 (1-12) proj: 1,190,000 +58%

    Using the same math as we did with silver, the projected March sales for this year are 67,000 and this provides a Q1 total of 297,500. Gold Eagles, like silver, average about 25% of their annual sales in the first quarter each year. This projects total 2013 sales of 1,190,000 and a nearly 60% increase over 2012.

    And what do you make of the continued drawdown in the GLD? As of last evening, the total amount of gold allegedly held by the fund is 1,236.31 metric tonnes or about 39,748,500 troy ounces. Now, going back to the beginning of 2013...On 1/2/13, the fund held 1,349.92 metric tonnes or 43,401,000 ounces. That is a truly staggering drop of 8.42% or 113.61 metric tonnes. This could also be stated as 3,652,646 troy ounces or 9,131 London Good Deliver bars or, at $1600/ounce...about $5.8B in gold.

    So, Gold Eagle sales are soaring, projected to rise by nearly 60% in 2013 vs 2012. At the same time, gold is being drained from the largest, easily-available stock on the planet, the GLD. Of course, metal leaving the GLD is due to liquidations but how much of that liquidated gold is being returned to AP vaults and how much is being delivered out? I wish I knew. And then consider this:

    There were 13,910 contracts that stood for delivery of Feb13 gold. That's 1,391,000 ounces. Looking back, there were only 4,623 that stood for delivery in Dec12, 5,178 in Oct12 and 5,807 in Aug12. Adding together those three, previous delivery months you get 15,608. Again, last month alone in February, 13,910 stood for delivery. Hmmmm. I wonder how many will stand in April?? The good news is: We won't have to wait long to find out. First Notice Day is March 28.

    So, anyway, I'm not sure what this proves, if anything. However, as you can plainly see, a trend is afoot for physical delivery of metal, both gold and silver. Will this trend continue? Probably. Does that imply higher prices in the future? Probably.

    Econ 101 teaches us that higher demand with stable supply leads to higher price. Consider, too, that in the metals, lower price makes mining less profitable, especially in the face of high energy prices. Less profitable mining leads to less production. Again, what does Econ 101 teach us? Higher demand with less supply equals even higher prices.

    Therefore, please hang in there. It may not look like it but we are winning. Keep the faith and keep stacking.

    TF

    About the Author

    Founder
    turd [at] tfmetalsreport [dot] com ()

      222 Comments

    Mickey
    Mar 13, 2013 - 3:25pm

    CFTC: now there is a place for sequestration cuts

    did you know the original legal meaning of sequestration is a "take away" for the benefit of the state?

    Jack Lew has a perverted sense of humor when he came up with that name.

    Mr. Fix
    Mar 13, 2013 - 3:30pm

    Meet the new Pope:


    Argentina's Jorge Mario Bergoglio Elected As Pope Francis

    Submitted by Tyler Durden on 03/13/2013 - 15:18

    A surprising pick for Pope, Argentina's 76 year old Jorge Mario Bergoglio, who was not among the front-runners, is now the Pope of the Catholic Church. His chosen name is Pope Francis. He is the first non-European pope since 741.

    https://www.zerohedge.com/news/2013-03-13/argentinas-jorge-mario-bergogl...


    T
    Mar 13, 2013 - 3:36pm

    guessing direction with emotion versus ...guessing with charts

    I always notice at times like these, many turdites get excited to feel like the bottom is in and metals (and miners) will make a big rally now, and everything will be a o k .

    only to get continually shocked as they get fleeced when the overhead resistance gets jumped on by the short attackers and drives price action back down to retest bottoms and make lower lows.

    The last 3 years have seen this type of price action. the last 2 fall seasons (october-december ) and still ongoing in 2013, have been not a bullish rally season for the metals but have been morphed by the manipulators into a bearish season. no longer reliable as a seasonal indicator. 'sell in may' , that old indicator....in 2011 it turned out to be a sell in April. and last year it was a catastrophic collapse starting on leap day february 29. This year has been just a continuation of the down wave from last october's top.

    but folks want so desperately to proclaim that the bottom is finally in here and great rallies are soon to come if not now.

    This would be an exercise in emotional hoping and guessing. (although I Do highly trust the wisdom of Jim Sinclair)

    What the charts are showing now is Massive resistance overhead at the key 50 and 200 Moving averages. which also cut thru a perfectly painted down trend channel line top zone.

    After a few more days of small rally from here, this resistance moving average zone will be hit. and the short attacking should likely commence again. why wouldnt it ?

    Someday it may stop. will that time be now ?

    or in 2 weeks? or 2 months ? who knows.

    All I can say is sit back and watch what price action does at the key resistance top zone where these moving averages are. Today's price action was a big whipsaw reversal on some miners. which hit their resistance zone yesterday.

    Such is this awful game .

    agNau
    Mar 13, 2013 - 3:39pm

    Why not retaliate with......

    a large paper sack full of manure set on their front porch. Set it on fire. Ring the door bell. Run far enough to hide and watch. Oldie but goodie.

    Strongsidejedi
    Mar 13, 2013 - 3:42pm

    Argentina?

    The new pope is from Buenos Aires and is Argentinian by birth.

    I get the distinct feeling that the Vatican may have a very deep comprehension regarding the effects of currency wars.

    Best wishes to Francis the 1st

    El Gordo
    Mar 13, 2013 - 3:44pm

    How about them apples - surprise

    Your bank data is now available to all spy agencies (or probably anyone else).

    https://www.reuters.com/article/2013/03/13/usa-banks-spying-idINDEE92C0E...

    Groaner
    Mar 13, 2013 - 3:48pm

    They are taking the miners to the wood shed.

    What a thrashing today.. Up nice yesterday, hammered..

    bullion hit tomorrow?

    TJeffson
    Mar 13, 2013 - 3:51pm

    @ Mickey - devaluation

    Not sure I posted this here... but if you compare 1970 to today... it's scary. To buy the same ounces of gold you could buy in 1970 with a median income of about $9,000, you'd have to be making just over $400,000 today. Yet today's median income is only $50,000. Now that's some devaluation.

    hammerman
    Mar 13, 2013 - 4:01pm

    can any body confirm lindsey williams in mexican hospital?

    also heard he is out with sum more globalist plans for us little people?

    The Watchman
    Mar 13, 2013 - 4:08pm
    Mickey
    Mar 13, 2013 - 4:08pm

    T Jeff

    I have a close friend from college--his family came over from Germany-in a hurry-and he has always held gold--he was pushing me to buy some in the 70's. Did not understand it then and that did not matter since my paycheck was going to living costs-as I suspect the kids jus tout of college if they have a job have the same problem.

    Understand it fully now.

    This is one big mess--PM sector not the only one played with, Oil, currencies, fixed income (interest) and broader equities.

    1585 seems to have held--for now.

    When we get done we may have a USD but compared against the other G7 is not a great measurement. Even to compare vs the G20 which is crazy to think why we even think that is telling.

    Everything should be vs gold

    Mr. Fix
    Mar 13, 2013 - 4:10pm
    Texas Sandman
    Mar 13, 2013 - 4:13pm

    Hammer

    Nothing (washout, washin, helicopter money drops, black swans, white swans,...) is ever off the table. Anybody who's been in the markets a few years knows this.

    It's not science, but horse racing, my friend.

    JMHO.

    ancientmoney T
    Mar 13, 2013 - 4:13pm

    @T . . . re: guessing direction . . .

    "'sell in may' , that old indicator....in 2011 it turned out to be a sell in April. and last year it was a catastrophic collapse starting on leap day february 29."

    --------------------------------------------------------------------------------

    It seems the CFTC had put a leash on JPM sometime after the results (catastrophic for CFTC) of the CFTC hearings on silver in 2010. However, as silver sniffed $50 in April 2011, the leash came off.

    Since then, JPM slathers on the shorts as needed to keep silver in the chosen range. Until and unless CFTC releashes JPM, this is how it will be until :

    1. Gold is reset vs. the dollar or Yuan or Euro, or,

    2. Physical silver runs so low that trading is halted, or some such default occurs, that won't be called a default.

    There clearly has been a source of physical silver that the experts did not know existed, for it to have extended this long. Of course, it could be just plain accounting fraud at SLV. There is no way to know whether the silver they say SLV holds is physical, or paper I.O.U.'s for silver.

    I expect silver and gold to be held back, until #1 or #2 above occurs. However, anyone who wants to protect and retain whatever wealth they have, had best get their physical before either one happens.

    Rui
    Mar 13, 2013 - 4:18pm

    Getting mixed signals from mining stocks

    Pullback volume on mining stocks is weak across board so it's somewhat bullish and yet the none-trivial trading on April GDX PUT options suggests otherwise so I cannot quite make a big move here. Wait and see.

    pbreed
    Mar 13, 2013 - 4:23pm
    Joe Dokes TJeffson
    Mar 13, 2013 - 4:27pm

    @TJeffson - Mickey - devaluation

    No wonder I seemed to have plenty of money when I landed a high school job at the age of 16 making $1.25 per hour in 1973. Today's equivalent, expressed in the amount of gold it could have purchased (had US citizens been able to purchase gold bullion) would be about $56.00 per hour if I've calculated it correctly.

    Kids these days look at me in disbelief when I tell them that when I was working at this job, a big Saturday night date with my girlfriend would consist of:

    Filling my car's twenty gallon tank up with gas

    A movie, including popcorn and cokes

    Pizza after the movie

    All of the above for a total of $20.00!

    Yep, that's some real devaluation in 40 years.

    Edit: Total would have been under $20.00, I'm at work, wrote too fast!

    agNau
    Mar 13, 2013 - 4:28pm

    Physical will run the game from here forward.

    The numbers posted by Turd above are proof that the paper game is being shunned at an exponential rate. Santa is correct. The futures market will be forced into a physical market as they fail to immediately produce metal. Increasing actual metal off take from a dwindling supply source. The naive and ignorant will be left holding their paper. This whole charade has been nothing more than a time buyer while details of the system failure are worked out. I used to believe they actually thought they could save this system. Now I know it was part of the managed control of our collapse. If you lay all the pieces of the legislation and "talk" out before you, and begin putting them in order, you will see how they all come together. Control. Today we see a bond market that is run by Govt. A stock market levitated by Govt. And a commodities pricing mechanism that is an absolute perversion. The bottom line fact remains that people still eat.... People still demand and NEED energy. And,.......as the above numbers show..... People are now demanding real money. I don't believe we will see a "v" bottom. Fits and starts may best describe near term. (volatility) perhaps a nice rise followed by a nice hammering.......but not back to the original start. Something like that. Like a losing team in a tug of war. Their massive shorts may look like our massive debt before they are over run. We may be a totally isolated island before the true value of our money is realized. All I know is that I refuse to play their game anymore, unless it helps me gain more real money. This week Richard Russell on KWN relented to the possibility of the markets having another nice leg higher potentially. (he, like most people did not justify higher valuations) basically what he was reinforcing with me was that the FED is intent on driving the market higher.... And "you do not fight the FED!" this is what we have been doing all along.....following the FED policy of weaker metals prices by stacking the smack downs. So we are golden. We follow the FED. We stack at cheap prices supplied by the FED.(each of us at our own ability) We know that supply issues ALWAYS appear when price controls are used. I think we are very close to realizing a rise not unlike the one I described, where we see stair stepping, gradually increasing price at first. I believe that the shorts will be added as needed to hold the price rise under the excitement level. Just like with QE, the amount of printing/shorting needed will rise with time and price. As Santa says......you cannot manipulate a market against trend. I will add the word "indefinitely". When the rope begins slipping from their hands those unbelievable days of price rise and volatility will arrive.

    tyberious
    Mar 13, 2013 - 4:50pm

    The Outsider Club: Silver

    The Outsider Club: Silver Enters Twilight Zone

    wealthwire.com / by Nick Hodge – Wednesday, March 13th, 2013

    You know silver is cheap right now.

    It’s down below $30 per ounce after nearly touching fifty in early 2011.

    And there are many reasons silver just can’t stay this low…

    Bucking Supply and Demand

    Silver is down about $5.00 since November when it was trading for $34.00 — a 16% drop.

    Logically, one of two things must’ve happened:

    1. The supply of silver expanded; or
    2. Demand decreased

    But the fact of the matter is the exact opposite is happening — meaning silver prices should be going up.

    Silver Eagle sales last year were the third highest in history. Had the U.S. Mint not sold out, sales likely would’ve set an all-time record.

    What’s more, silver sales outpaced gold 50 to 1. And sales are off to the races again this year…

    Demand is up, not down.

    What about supply?

    Well, the U.S. Mint is already rationing to its distributors, and we’re only 11 weeks into the year. The total weight of Silver Eagle sales is now greater than annual U.S. silver production by several million ounces.

    Both wholesalers and retailers are almost completely sold out of junk silver (pre-1965 coins), and are quoting wait times up to six weeks. And a report from Thomson Reuters shows industrial demand for silver could hit a record 511 million ounces by 2014.

    Apple just delayed its new iMacs because of a silver shortage in China.

    The supply is so thin, retail markups have risen sixfold in two months. They haven’t been this high since 1980. Silver topped $50 that year.

    READ MORE

    SilverSurfers
    Mar 13, 2013 - 4:51pm

    Counter-Attack

    site getting hung up? Well, could be the EE making life difficult. donno. I would think that IPA scan of incoming would show the single user attack. Could be, just with all the RAW-RAW, TO THE FREAKING MOON, THIS IS IT, stuff, going on, maybe we have a huge number of lurkers, just coming in for a daily look see. I Donno.

    But, I got a Russian pal, living in New Zealand, these days, pretty sharp computer tech guy, if you want an email, just pm me.

    Mr Fix, you timing is impeccable, 12:10pm. I having some chocolate cheese cake.

    ===

    shocked as they get fleeced ????

    and who's getting fleeced????

    dont make mistakes, dont do random, you have an objective, keep stacking, long and strong, with strong hands. You only get fleeced if you sell poorly.

    =====

    Today’s move at $1600 is quite constructive and now it appears gold is trying to move from neutral to positive after its daily trading patterns stopped.

    Sinclair makes the call, by 3/20 1600 gold, so, you see, he does read TF

    Silver Danny
    Mar 13, 2013 - 4:59pm

    @Turd: Silver Eagle Sales Projections

    Turd,

    I looked at your data and came up with these projections for silver eagles sales based off the latest info.

    2013 Projected American Silver Eagles Sold

    Low: 48,400,000

    Medium: 54,200,000

    High: 60,000,000

    This would be a all time record, even with the low projection.

    Joe Dokes
    Mar 13, 2013 - 5:05pm

    Bitcoin Again

    Interesting article on Bitcoin from goldseek.com.

    https://news.goldseek.com/GoldSeek/1363183200.php

    tpbeta
    Mar 13, 2013 - 5:07pm

    Silver coin shortages do not necessarily equal silver shortages

    Why do people assume that coins and bullion supply and demand are so intimately related? Surely they have entirely different markets and production chains. Being made of silver is the one thing that they have in common, but that doesn't make them the same thing. Of course a shortage of one might mean a shortage of the other. But there are other indicators which we might want to consider more credible. In particular, is there any credible evidence of an industrial shortage of silver?

    Texas Sandman
    Mar 13, 2013 - 5:09pm

    As I've said before...

    What counts in terms of stopping the ee is availability of COMEX DELIVERABLE BARS.

    Now, I am not terribly impressed with retail availability of those bars, but I also don't personally buy bars that big (1000 ozs) and don't know people who do. You can't send them through the mail, they each weigh about 70 pounds, and they're just painful to keep. As I've said, I tend to stack the 100 oz variety, though I do have a few ASEs for when gasoline goes to $200/gallon, the dollar fails and there's rioting in the streets. And I have to barter ASEs to fill the tank of my plug-in toyota prius.

    But I honestly don't see how unavailability & brisk sales of silver eagles, junk coins, or anything else translates into something the cartel would care about in the slightest. Perhaps the manufacture of a whole bunch of the smaller bars could impact availability of the raw material for the bars comex cares about.

    ancientmoney
    Mar 13, 2013 - 5:10pm

    To the Fed, Treasury, China, etc. the dollar means nothing . . .

    To follow-on to agNau's post:

    They (Fed, Treasury, China, etc.) all know the dollar is meaningless, as it is produced in volumes that 99% of the world's population cannot fathom.

    The monetary system is a fabrication. It has meaning only to the extent that most don't know any better. The accounting is used/changed as the money-changers see fit. Whatever it takes to retain control, right, wrong or indifferent. The producers of goods, like China, know they are being hoodwinked by the western bankers, but they only learned that fact after being hung out over the ledge.

    Since Geithner's visit to China, we have seen the U.S. bond market continue to dance on the head of a pin, while gold's price stays locked-down, even as 1000's of tons of it leave western shores for Oriental vaults. Quid pro quo.

    Everything is on lock-down in the markets, so as to keep it all together until all the bankers' and pols' ducks are lined up. There are no markets anymore, only shadows of them, as dollars which are created at no cost, out of computer programs, are forced into some, and out of others.

    There is a new monetary world approaching that will be much different than the past 40 years. This one is spent--or very nearly so.

    The Watchman
    Mar 13, 2013 - 5:11pm
    ancientmoney Texas Sandman
    Mar 13, 2013 - 5:19pm

    @Texas Sandman . . . re: silver

    "But I honestly don't see how unavailability & brisk sales of silver eagles, junk coins, or anything else translates into something the cartel would care about in the slightest. Perhaps the manufacture of a whole bunch of the smaller bars could impact availability of the raw material for the bars comex cares about."

    -----------------------------------------------------------------------------

    Eagles, Maples, bars, etc (except junk) all originate from 1000 oz bars. That is why 1000 oz bars are considered deliverable, as they are the stock from which almost everything silver is made.

    Whether people buy 1000, 100, 10, or 1 oz sizes, it all depletes 1000 oz bars at some point in the process.

    Bollocks
    Mar 13, 2013 - 5:23pm
    SilverFocker
    Mar 13, 2013 - 5:27pm

    "It may not look like it but we are winning."

    Tiger blood,Silver balls and a Golden banana hammock............What could possibly go wrong?

    Mr. Fix
    Mar 13, 2013 - 5:32pm

    Another investigation!.........NOT!

    They can't make this one last five years,

    the system can't last that long. This is just another long stall. Everyone knows about the manipulation now,

    they already have enough evidence for convictions, but they will do absolutely nothing as always.

    This just buys time for the great reset.

    at least now, when somebody asks about gold price manipulation, they can reply:

    “It is our policy not to comment on an ongoing investigation”.

    It is what bankster tools do.

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