The US Mint Resumes Sales While Silver Bars Disappear
The U.S. Mint resumed sales after a week of suspension as silver coins sales for January almost doubled compared with the month before. An all-time high of over 7.4 million Silver Eagle coins were bought in January from the U.S. Mint, which substantially exceeded the former record set in early 2011. Gold coin sales were also the highest seen in almost three years.
One can almost hear the whispers about the end of QE as the world patiently awaits the fate of Europe’s coming recapitalizations and the rise of the Eurobond.
When Industrial Demand Overpowers Investment Demand
The industrial users of silver have benefited from unnaturally low prices for decades. Nevertheless, the artificially low prices have led to destruction of inventory.
Roughly 90 percent of the silver stockpile has now been worked through since the demonetization of silver in the United States in the early 1960’s.
One can only wonder if the remaining silver longs who have withstood the egregious price management are now standing for delivery, leaving industrial concerns suddenly in a pickle over their just-in-time delivery practices they have taken for granted for so long.
Indeed, anecdotal evidence has surfaced indicating shortages of silver bars for industrial applications. Also, well publicized announcements have started appearing, such as the news that HSBC has been sourcing silver from Poland rather than what would appear to be ample supply elsewhere or in the warehouses they run as custodians.
Investment demand for silver has been fueled in large part by high profile investments over the years — including renowned investor Warren Buffett — and the creation of the big silver ETF (SLV), and the silver market has blossomed as the great financial storm approached and passed over the world.
Fueling the Return to a Crossroads for Silver
Gold & Silver COT Report 1/31/13
In the week ending 1/29/13, Commercials added 14,345,000 ounces net short while the silver price declined $1 during the period.