With Silver Prices Smashed Nearly 15% This Week, the US Mint Reports Silver Eagle Sales of 1.4 million coins.
Based On Our Conversations With the CEO and Head of Trading at 2 AP’s However, We Find This Number EXTREMELY Hard To Believe…
*Editor note: With sentiment near all-time lows for the entire bull market, we thought it apropos to bring back SRSrocco’s viral, comprehensive FUNDAMENTAL ANALYSIS on the forces that will push silver over $100/oz.
PLEASE CHECK YOUR EMOTIONS AT THE DOOR AND REVIEW THE FUNDAMENTALS!
There are tremendous forces at work that will push silver over $100 an ounce.
According to the 2012 World Silver Survey, total global silver investment demand has risen from only 31.6 million oz in 2002 to a staggering 282.2 million oz in 2011. As world economic fiat based monetary system continues to deteriorate, investors are taking delivery of physical silver rather than holding on paper contracts that may not be backed by any metal whatsoever.
This has created a run on the LBMA… the largest metal exchange in the world. Once the world ‘s liquid energy supply starts its inevitable decline from its current plateau, annual silver metal production will decline as well. There will be no silver glut and there will be no silver available when the world’s fiat monetary system finally dries up and blows away.
Get ready. The forces for pushing silver over $100 have just begun.
Physical gold and silver demand remains robust in many markets internationally. Demand from the Middle East remains robust as seen in the near record imports of gold and silver into Turkey. Turkey’s gold imports climbed to an eight-month high in March as prices averaged the lowest since May, according to the Istanbul Gold Exchange. Silver imports rose 31% from a month earlier according to Bloomberg. Gold imports increased to 18.26 metric tons, the most since July. That’s up from 17.34 tons in February and compared with 2.91 tons a year earlier, data on the exchange’s website show. The country shipped in 120.8 tons last year. Turkey was the fourth-biggest gold consumer in 2012, according to the London-based World Gold Council. Bullion averaged $1,593.62 an ounce last month and is trading about 17% below the record nominal high of $1,921.15 set in September 2011.
The Bloomberg Chart of the Day shows silver tonnage in exchange- traded funds backed by the metal rose for four straight months, while holdings for gold ETPs dropped in January and February. Silver futures may jump 20 percent this year to $34.50 an ounce from yesterday’s settlement of $28.808 in New York on investment demand and industrial use, said Rohit Savant, a senior commodity analyst at the New York-based research company. Holdings in silver ETPs rose 3.6 percent in the two months ended Feb. 28, reaching a record 19,699 metric tons on Jan. 18, data compiled by Bloomberg show. Last month, assets in gold ETPs fell 4.1%. Sales of American Eagle silver coins by the U.S. Mint jumped to a record in January and more than doubled in February from a year earlier, the Mint’s website showed. China’s imports of the metal surged 14% in January, the biggest monthly gain since July.
Société Générale has issued a research note saying that investors looking to allocate funds to the precious metals may buy silver as a “cheaper alternative” to gold.
In a report e-mailed today and picked up by Bloomberg, the bank cites the “healthy” improvement in silver coin demand and exchange-traded product purchases recently. The bank says that measurable silver investment in 2013 is up by more than 30% and if sustained, this year’s surplus should be absorbed. This could lead to a silver deficit.
Silver eagle bullion coin sales soared to a record amount in February 2013 – totaling 3,368,500 ounces. February’s record sales followed record coin sales in January. Year-to-date silver sales for the U.S. Mint are 10.8 million ounces, which is over 10% higher than the next best period from 2011.
By SD Contributor SRSrocco:
The problem today with the typical analysis coming from the BULLS & BEARS concerning future silver investment demand and price is that it is based upon an ENERGY SYSTEM that is more than 1,000 years old. You cannot understand silver if you DO NOT UNDERSTAND ENERGY.
Most of the investing public and the folks from FOFOA have no clue how energy will impact the future silver investment demand as well as its price. They FAIL TO THINK OUTSIDE THE BOX.
SILVER INVESTMENT DEMAND WILL BE HOTTER THAN GOLD.
…mark my words!
By SD Contributor SRSrocco:
While gold is known as the King of Monetary Metals, Silver will become the “OFFICIAL ROYAL UNDERDOG”.
Investment demand for silver hasn’t even begun yet. This is what I will be discussing in my upcoming presentation. Investors who are worried about silver selling off after the big move up with gold (AS JIM SINCLAIR HAS STATED)… shouldn’t be. Sinclair is excellent in understanding gold, but is still forecasting the future price of silver based on 1970-1980 world economic conditions.
Energy will be a MAJOR FACTOR going forward that will impact SILVER INVESTMENT DEMAND.
By SD Contributor SRSrocco:
There are two misconceptions about the silver market that are still held by many investors in the precious metals community. One is the notion that the world produces large annual silver surpluses and the other is the low cost of mining silver. Some have argued that the investors have been deceived by certain aspects of the silver industry to believe these two fabrications.
If the silver institute determined the annual silver surplus-deficit the same way as the World Gold Council calculates gold, there would be no so-called huge silver surpluses. However, the silver industry and investors have been indoctrinated to believe that silver is just a mere slave to fulfill the demands of its industrial masters. Institutions, individual investors or the public who have the “need” or “use” to acquire silver as investment — need not apply.
Before we get into destroying the myth (once and for all) behind the so-called silver surpluses, here is the definition of surplus: