beach ballSilver dipped to $19.10/oz overnight and remains under pressure this morning . With the gold: silver ratio at just over 66 ($1,290/$19.38/oz), silver remains a compelling buy at these levels.
The stealth phenomenon that is silver stackers or long term store of value buyers of silver coins and bars continues and is seen in the record levels of demand for silver eagles from the U.S. Mint.   The US Mint sold 13,879,000 ounces of me in Q1, 2014.  This is just over 2% less than the 14,223,000 sold in the first quarter last year.   March sales were the fourth-biggest month ever and the US Mint is now on pace to exceed 2013 totals.
Silver stackers remain the smart, informed buyers.  They realize that silver is undervalued versus gold with the gold silver ratio at 66:1.  This is particularly the case on a long term historical basis. The long term historical average, gold to silver ratio is 15:1.
Silver industrial and investment demand is increasing very significantly and meanwhile supply is falling. The fact that the huge majority of the investment public and financial services industry remains unaware of the fundamentals in silver means that the bull market in silver likely remains in its intermediate stage.

 


From Goldcore:

Today’s AM fix was USD 1,289.75, EUR 930.02 and GBP 767.07 per ounce.
Yesterday’s AM fix was USD 1,302.00, EUR 938.45 and GBP 772.79 per ounce.

Gold fell $6.10 or 0.47% yesterday to $1,296.60/oz. Silver slipped $0.12 or 0.61% yesterday to $19.59/oz.

Gold and silver fell for a second straight session today despite escalating tensions between Russia and the West.


Silver in U.S. Dollars, 5 Years – (Thomson Reuters)

Markets await this week’s U.S. jobs report and a Federal Reserve policy meeting for further hints regarding the fragile U.S. economy and the extent to which ultra loose monetary policies will continue.

Tensions between the West and Russia over Ukraine remained very high after the United States imposed new sanctions on key Russian business figures. This prompted Moscow to denounce “Cold War” tactics.

President Obama announced the U.S. would impose a new round of sanctions on individuals and companies in Russia. Obama said the sanctions will focus on “some areas of high-tech defense exports” to Russia.

Violence continues in eastern Ukraine and risks deteriorating. The Cold War rhetoric and geopolitical risk is being overlooked for now.

In the physical markets, data showed China’s gold purchases via main conduit Hong Kong fell to a four-month low in March. Net gold imports totaled 80.6 metric tons in March, compared with 111.4 tons in February.

Imports remained very high in the first quarter and are on track to equal the record level of demand seen in 2013 (see chart).

 

 

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Shanghai gold prices have now recovered to a premium of about $1 an ounce indicating a slight uptick in demand. An increase in physical demand across Asia appears to be providing a strong floor for gold.

Silver – The World’s Most Undervalued Asset?
Silver dipped to $19.10/oz overnight and remains under pressure this morning . With the gold: silver ratio at just over 66 ($1,290/$19.38/oz), silver remains a compelling buy at these levels.

The stealth phenomenon that is silver stackers or long term store of value buyers of silver coins and bars continues and is seen in the record levels of demand for silver eagles from the U.S. Mint.

The US Mint sold 13,879,000 ounces of me in Q1, 2014.  This is just over 2% less than the 14,223,000 sold in the first quarter last year. March sales were the fourth-biggest month ever and the US Mint is now on pace to exceed 2013 totals.

Silver stackers remain the smart, informed buyers.  They realize that silver is undervalued versus gold with the gold silver ratio at 66:1.  This is particularly the case on a long term historical basis. The long term historical average, gold to silver ratio is 15:1.

This is because it is estimated that geologically there are some 15 parts of silver in the ground for every 1 part of gold. In 1980 the ratio nearly reached 15 ($850oz/$50oz=17) and the average in the 20th century has been around 40:1.

Silver is unique in terms of being both a monetary and an industrial metal. Silver’s industrial uses should mean that the gold silver ratio will likely gradually regress to the average in the last 100 hundred years. If the tiny silver market was to see significant investment funds enter it than the ratio could return closer to the historical average of 15:1 as it did as recently as 1980.

Silver is undervalued when compared with gold, platinum, palladium, base metals including copper, oil, stocks and the DJIA and Nasdaq, bonds and the U.S. dollar. Ted Butler has an excellent research note on this today with some excellent charts showing silver’s relative value to these benchmarks.

Silver at below $20/oz, remains less than half of its nominal record price in 1980 and very undervalued from a historical basis. The average nominal price of silver in 1979 and 1980 was $21.80/oz and $16.39/oz respectively.

There are very few, if any assets that remain at the same price levels as they were more than 30 years ago.

In today’s dollars and adjusted for inflation that would equate to an inflation adjusted average price of some $60/oz and $44/oz in 1979 and 1980. It is for this reason that we believe silver will be valued at well over $50/oz in the coming years and silver remains an incredible opportunity.

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A picture or a chart truly is worth a thousand words and the chart above showing silver prices adjusted for inflation shows how undervalued silver remains.

Silver industrial and investment demand is increasing very significantly and meanwhile supply is falling. The fact that the huge majority of the investment public and financial services industry remains unaware of the fundamentals in silver means that the bull market in silver likely remains in its intermediate stage.

Silver, like gold, has been and is increasingly again being regarded by many investment managers as a great financial hedge against terrorism, war, fiat currency crises, deflation, inflation, stagflation and even the worst case scenario of hyperinflation.

Today, people in Iceland, Cyprus, Iran and Ukraine can attest to the value of silver as a store of value against currency devaluation.


    • Maybe the best Bill Holter has ever written:
       
      The Nuclear Option?
      Author : Bill Holter
      Published: April 28th, 2014
      Several things happened this past week that were easily connectable and in my opinion can be put together to understand what is happening in the big picture. I plan to interject some opinion (mine) in this piece, if you disagree then I would say that you are entitled (still), just as I am entitled to my opinion.
      China announced that they plan to trade, price and create an exchange for both oil and gold …in Yuan. They also plan to set up a global payments system that settles in Yuan. A financial salvo was fired by the U.S. against Russia as their credit rating was downgraded to one notch above junk. Russia has responded by publicly making plans to abandon the dollar completely and also exiting the sovereign debt of NATO allies. We also heard that President Putin has “temporarily” shut off all communication with President Obama while John Kerry’s calls to his Russian counterpart have gone unanswered. This is really bad stuff to put it mildly.
      One other strange event that occurred was that the USS Donald Cook has been seen exiting the Black Sea. Originally this ship was sent in as assurance to our allies and as a show of strength. Russia today reported that one of their jets “buzzed” the Donald Cook 12 times (and confirmed by the U.S.), they also claim that the “Aegis” defense system was shut down or jammed by the Russians and it was rendered defenseless. Some may say that since this news came from a Russian source that it is propaganda, I personally believe it. I say this because why else would the Thomas Cook exit the arena as tensions are as high now as at any point? In my opinion, Russia “tested” our Aegis system to see if they could jam it and they did. The Donald Cook has retreated because were an Aegis class warship to be hit or even sunk, “invincibility” would be disproven. Again, this is just my own opinion.
      I titled this piece “The Nuclear Option” because I believe that we are very very close to being blown up financially. As I mentioned last week, James Turk has reported that gold bars from the 1960′s and prior are beginning to surface in the global markets. We also know that the U.S. exported a huge 80 tons of gold in January. I wrote a week or two back that in my opinion the elevated open interest in silver has Chinese origins but I cannot prove it. We also know that all of a sudden Belgium has become a huge buyer of U.S. Treasuries; this is surely some sort of Fed or EU central bank proxy to sop up selling without the Fed tipping their hand to outright monetization.
      What I am saying is that the stage is set. I believe than an all-out attack on the dollar is about to commence…and gold/silver will be the “bullets” so to speak. I believe that the Chinese have seen a “change” in the “type” of gold that is being delivered to them and they know the math. When I say they know the “math” I mean that they know how much they have accumulated and subtracted this amount from what they believe that the West originally had…which is now being confirmed by pre 1960′s gold hitting the market. They know that we are on the ropes.
      The above said any strategist worth their salt will wait until their opponent is weak or has been weakened and I believe our opponents have come to this conclusion. They know that we are low on gold, they know that there are no large stockpiles of silver, they know that we are printing dollars like crazy to stay afloat, they know that we are in debt in every way imaginable above our heads, they know that we are monetizing debt, they know that Europe will not side with us if their supply of natural gas is shut off and they now know (in my opinion) that they have cracked the Aegis defense system. They also know that our economic numbers are a total sham and that unemployment and inflation are grossly higher than we report. In short, they know that we are full of crap. “Pulling the trigger” at this point is not a huge effort and will certainly not take a lot of money. I estimated 2 years ago that the silver market could be completely cornered with as little as $5 billion (or less)…so maybe they’ll use $10 billion? Gold, (if we are out as I suspect) could be cornered in my opinion with a concentrated $20 billion order…so maybe they’ll use $100 billion? “Where” will this type of money come from you ask? The sale of U.S. Treasuries of course, killing two (or more) birds with one stone (our own) by cornering the metals and dumping Treasuries to pay for it.
      I believe that the plan is to “isolate” the U.S., even without any “help” we are doing this all by ourselves. I can envision several events taking place all at the same time. Russia could push into the Ukraine, China could become aggressive with Japan, and North Korea takes their cue and attacks South Korea while Iran and Syria strike at Israel…all at once… while Saudi Arabia switches allegiance. Dollars and Treasuries are dumped with the proceeds use to “call” our paper metals markets and demanding deliveries. Interest rates may not rise as the Fed would surely become a buyer but the value of the dollar would certainly crater. Were all this to occur at once, how could we respond? Our military is too stretched and too weakened to cover 4 fronts at once. Any major defeat of our “technology” such as the sinking of an Aegis class ship would on its own sink the dollar by 25% or even more. I could envision all of this taking place, the smoke already beginning to clear and a very different looking world over a 2 week period. Please keep in mind that our markets, our system as a whole, are now more leveraged and more extended than any other time in history.
      This opinion or thought process I have titled “The Nuclear Option” because our financial system would go so far up in smoke in such a short period of time there is no other name for it. This would leave us with only one option…”the nuclear option.” We would have only one retaliation available to us and that unfortunately would be the use of tactical nuclear weapons
      I know that hearing this opinion is not pleasant. I am not writing this to be alarmist; I am writing it because this is how I see it. History has shown us that whenever one country “stiffs” another country financially …war usually is the result. In this case it is the U.S. that has “stiffed” the rest of the world by (over)issuing dollars that have been freely printed to pay for real goods which we have imported. We have “over” lived our means on the backs of the rest of the world for many (too many in their opinion) years and payback is what I believe the rest of the world desires.
      All of this is just my opinion but I am willing to bet that it’s not too far off from what is actually heading straight for us.
       

  1. Silver is very undervalued when compared to pretty much any other asset I can think of and it is trading below the cost of production for most mining companies. For just those reasons silver is a very good buy at current levels. 

  2. Avatar of
    Randy the slave says:

    PEOPLE ARE SO DUMB! OK SILVER BE 15 TO 1 GOLD. SIMPLE MATH FOLKS…  SILVER BE $19.50 AN OUNCE… SO $19.50 X 15 IS $292.50!!!!!!!!!    ANYTHING HIGHER THAN $292.50 FOR GOLD AND YOU ARE PAYING TOO MUCH!! BEWARE OF THIS OVER PRICED GOLD!! DO NOT BUY GOLD, YOU WILL BE RUINED!

  3. Avatar of
    Randy the slave says:

    correction 4/30/14  silver now at 19.00 dollars so gold should now be. $285.00 BE SMART< DO NOT BUY GOLD. When this thing corrects Gold will be under 300.00 and thats when the US Government is gonna buy up Gold to replace all the Gold they have sold at 1300-1900 oz. in the last few years. Thats why they control these things so they can fund the Government. Government is a big business and needs lots of money to run it. Just hold tight, soon it will be under 300.00 an ounce gold. I will be waiting. God bless the USA!

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