Guest Post: "Physical Silver Shortage Explodes", by The Doc at SilverDoctors

45
Wed, Jul 8, 2015 - 3:54pm

Lots of anecdotal evidence out there regarding physical silver shortages. Most noteworthy was yesterday's news that the U.S. Mint would not be accepting additional orders for Silver Eagles until August. The Doc just emailed this new link and summary and offered to have it posted here at TFMR, as well. Please read and consider.

Physical Silver Shortage EXPLODES! “We Are Looking at the Potential of 2008 Style PM Premiums”

by, The Doc at https://www.silverdoctors.com

Everything has changed in the past 48 hours…

Tuesday morning we warned that physical shortages and BIG jumps in physical silver premiums were imminent after 90% silver premiums had doubled in the past 48 hours.

Below is an update of the physical precious metals markets over the past 48 hours:

90% premiums skyrocketed over the weekend after the Greek Referendum vote with availability nearly nill- wholesalers/distributors are now offering 90% silver in volume at up to $3 over spot, and supplies are rapidly vanishing

Just before noon Tuesday, the US Mint advised Authorized Primary Dealers it had SOLD OUT of all Silver Eagle coins, and would be taking no further orders until approximately August, at which point it would begin rationing coins to Authorized Dealers.

Silver Eagle premiums instantly skyrocketed across the market, with premiums rising as high as $3.25 over spot/oz WHOLESALE / IN BULK

Between 4pm EST and 5pm EST on Tuesday 7/7, one of the largest Authorized Dealers sold through 250,000 Silver Eagles and raised premiums .50/oz further!

SDBullion broke all-time sales records Tuesday for order volume as well as total ounces sold- with demand FAR OUTPACING the Nov 5th 2014 bottom for gold and silver which had previously held both records.

Later in the afternoon, premiums began surging on Silver Maples and silver rounds and bars, and Authorized Dealers are advising that a production and premium hike announcement is expected imminently from the Royal Canadian Mint.

Wholesale premiums on many silver rounds and 10 and 100 oz bars HAVE DOUBLED in 48 hours.

SDBullion received a wholesale quote from one of the largest Authorized Dealers Wednesday for nearly $5/oz over spot for 5,000 oz of current year America The Beautiful Coins- a premium spike of over 100% in less than 24 hours!

Tuesday, the Sunshine Mint rounds and bars went from immediately available to production completely sold through August 13th in under 4 hours!

In many cases, physical silver is now MORE EXPENSIVE to acquire (on both a wholesale as well as retail level) after a $1/oz paper smash than it was prior to this week’s trip down the proverbial mine-shaft!

Wednesday the shortage began to spread to GOLD products.

Back dated gold Eagles and Maples are now NON EXISTENT on the US wholesale market.

Current year gold coins are now 2 weeks out at most of the Authorized Dealers. This type of gold shortage did not occur even when gold dipped to $1130 last November.

While spot/paper prices have stabilized today, if any further weakness materializes in the paper futures markets for gold and silver, we are looking at the very real potential of 2008 style physical premiums to acquire precious metals.

We will keep you updated as the precious metals shortage situation progresses.

-Doc

About the Author

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turd [at] tfmetalsreport [dot] com ()

  45 Comments

McFly
Jul 8, 2015 - 4:42pm

Report from my coin shop

Just got back from my local coin shop. When I asked them about the flow of buyers vs sellers lately, they said that there's been a surge of buyers over the past few days, but very few people have been selling metal to them. They still had silver to sell though, so I bought some 1 oz Sunshine Mint bars. So, in short, they still have silver to sell, but it doesn't take a genius to figure out that way more buying than selling will eventually lead to shortages. So, let's see what happens...

Ubik Kosmil 4 oz
Jul 8, 2015 - 4:46pm

RE: A nice line from Steve way

I too believe that our stacks 'will' be extremely valuable and most likely overnight.

But the disconnect between anecdotal reports of shortages and a depressed paper price that can be converted to metal (by taking delivery) makes me think we are not there yet.

silver10sguy
Jul 8, 2015 - 4:53pm

Acronym Mental Distraction

Yesterday while the metals were getting smashed I tried to create some new acronyms.

FED - Fatal end Dollar

FED - Freaking end Deception

My favorite one is especially sweet after hearing of silver shortages. SBBS - Screw bankers, buy silver

I am very pumped to buy more silver now that we may finally be close to the end of manipulation.

McFly Ubik Kosmil
Jul 8, 2015 - 4:55pm

@ Ubik

(This response is partly in answer to your question, and is partly a tangent. Also, I'm no expert at this, so Turdites, feel free to correct my mistakes.) It's not that silver is hard to find. Retail investors can find it in most places still. It's just that (1) it's hard to find in very large quantities for big buyers, and (2) there are signs that there MAY be a retail shortage soon. (I've seen it twice with my own eyes, and you couldn't find metal for weeks...at reasonable prices, that is). I'm guessing the reason why no one has stood for delivery and broken the Comex yet is because, and here I go with the numbers again: (1) You'd have to have a LOT of capital to do it, so you'd have to be a very big investor or entity, and (2) you'd have to be willing to be labeled the one responsible for breaking the Comex (some would like you, some would hate you, someone might even sue you). Which big bank, country, firm, or investor wants do do that? Ones that know about the current situation in silver are probably still trying buying metal at these low prices WITHOUT causing trouble. However, I'm guessing that if/when retail shortages emerge again, a new arbitrage will present itself, where you can get 1,000 oz Comex bars at/near spot, melt them down into smaller units, and then sell them into the market at much higher retail prices. I think that this arbitrage is what solved the shortage issues twice before. But if they run out of the commercial-sized bars this time (Comex runs dry, and I think this is a real threat this time), that'll be it, and only much higher prices will cause people to part with their metal.

cris
Jul 8, 2015 - 4:57pm

Not all silver is created equal

Interesting quote:

Silver Eagle premiums instantly skyrocketed across the market, with premiums rising as high as $3.25 over spot/oz WHOLESALE / IN BULK

Ted Butler has often quoted his mentor Izzy Friedman, who maintained that in the inevitable silver shortage, premiums for Eagles (and Maple Leafs) might someday rival the current cost of the coin itself.

In effect, these government minted coins are the best investment, as they would then essentially pay for themselves. Recognized worldwide, no need for assay, highly liquid.

PS Cheers CPE!

Ubik Kosmil McFly
Jul 8, 2015 - 4:59pm

@McFly

Thanks for the response. Makes sense, maybe the arbitrage opportunity just appearing or the premiums not high enough yet.

Let's see what happens over the next days/weeks...

McFly
Jul 8, 2015 - 4:59pm

This is exactly what was

This is exactly what was talked about in the last thread, namely that further declines won't necessarily mean lower prices for you, the investor: "In many cases, physical silver is now MORE EXPENSIVE to acquire (on both a wholesale as well as retail level) after a $1/oz paper smash than it was prior to this week’s trip down the proverbial mine-shaft!" - The Doc

CPE
Jul 8, 2015 - 5:02pm

@Cris

h/t!!!!!!!!

Chuck Diesel
Jul 8, 2015 - 5:04pm

ASE eBay sales going for 30-40% over spot

Here are couple auctions that just ended . Coins are selling for $20-$21 each compared to a spot price of $15.10. Said differently, these coins are selling for 30-40% over spot

https://www.ebay.com/itm/2014-Walking-Liberty-American-Eagle-1-Oz-999-Fi...

https://www.ebay.com/itm/4-1-oz-2015-AMERICAN-SILVER-EAGLE-COIN-from-ROL...

lakedweller2
Jul 8, 2015 - 5:06pm

@cpe

Thanks. I'm the one jammed into the fence down the right side where 95% of my buddies are getting to the other side first. I even work out everyday.

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