U.S. Mint Sales of Silver Coins Reach Record in 2013 First Half

USMintSales of silver coins by the U.S. Mint have set a record high in the first half of 2013 seeing the best start to a year ever.  Silver bullion coins were first offered in 1986.
Falling prices and concerns about being able to take delivery of coins amid continuing concerns about the US economy and currency debasement have led to the record demand.
The death of the gold and silver bull markets is greatly exaggerated as seen in the still very robust physical demand from investors and store of value buyers internationally including the U.SBull markets do not end in a period of sustained record physical demand nearly two years after prices have “peaked”.
Bull markets end in speculative manias with mass participation by the public and blow off tops where prices become massively overvalued as seen in 1980.

2013 Canadian Maples As Low As $2.29 Over Spot!

 

From Goldcore:

 

 

Today’s AM fix was USD 1,366.00, EUR 1,019.86 and GBP 874.91 per ounce.
Yesterday’s AM fix was USD 1,378.50, EUR 1,030.35 and GBP 880.32 per ounce.

Gold fell $16.60 or 1.2% yesterday and closed at $1,367.10/oz. Silver finished down 1.01%.

Gold’s weakness continues and gold is now near the lowest level in four weeks, as a liquidity driven rally in stocks and investor caution over the Federal Reserve’s monetary policy is contributing to a nervous gold market.

 
Silver in USD, 3 Year – (GoldCore)

Fed Chairman Ben Bernanke said last month the bank could scale back its $85 billion monthly bond purchases if the U.S. economy strengthens, but a lack of clarity on the timing has unsettled markets. A policy statement from the central bank will be released today after its meeting.

Expectations are that the Fed may scale back its extremely unusual $85 billion per month debt monetisation programme to $60 billion a month and continue with near zero interest rates.

Both of which would be bullish for gold.


Cross Currency Table – (Bloomberg)

It would be very bearish for gold and silver if Bernanke was to indicate that bond buying would be phased out completely and interest rates allowed to rise to historic norms. However, given the very fragile nature of the US recovery, a return to conventional monetary policies is not going to happen any time soon.

The US economy remains massively indebted and the fiscal situation sees little sign of improving. Many states are on the verge of bankruptcy.

This is leading to continuing very robust physical demand from investors and store of value buyers internationally and in the U.S.

This demand can be seen in the lack of liquidations in the silver ETFs by investors and speculators, and by continuing store of wealth demand for silver coins and bars.


Total Known ETF Holdings of Silver

CME is catering for the demand by introducing a 1,000 ounce physical silver futures contract “due to demand from customers”.

“The smaller size will provide market participants with greater flexibility to manage their silver price risk, and serve as a more cost-effective tool for individual investors or others looking to hedge against economic uncertainty.”

The CME said it is deliverable against existing benchmark silver futures contracts.

Sales of silver coins by the U.S. Mint have set a record high in the first half of 2013 seeing the best start to a year ever. Silver bullion coins were first offered in 1986.

Falling prices and concerns about being able to take delivery of coins amid continuing concerns about the US economy and currency debasement have led to the record demand.

Sales in 2013 have reached 24.03 million ounces and demand reached a monthly all-time high of 7.5 million ounces in January.

Demand remains at an “unprecedented level,” and sales of gold and silver coins may reach an annual record this year, Richard Peterson, the acting director of the mint, said on June 5.

Silver coin sales were suspended in January for more than a week because of a lack of silver inventory. In April, purchases more than doubled from a year earlier after prices tumbled 16% in two days due to unusually aggressive selling on the futures market.

Silver futures have declined 28% this year in New York, the biggest loss among the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index but the smart money is continuing to accumulate on the dip.

The death of the gold and silver bull markets is greatly exaggerated as seen in the still very robust physical demand from investors and store of value buyers internationally including the U.S.

Bull markets do not end in a period of sustained record physical demand nearly two years after prices have “peaked”.

This strongly suggests that silver’s bull market is far from over. Silver has gone from being massively undervalued in the early 2000’s to being fairly valued today. Bull markets end in speculative manias with mass participation by the public and blow off tops where prices become massively overvalued as seen in 1980.

 

This was clearly seen in 1980 when silver rose from $6.08/oz on January 2nd 1979 to $50/oz on January 21st 1980 or more than eight fold in less than 13 months.

This has not happened with silver yet. Most of the public does not even know the price of an ounce of silver, let alone its value and how to own it. Silver remains gold’s very poor cousin and gets little or no media attention.


Gold Silver Ratio (Quarterly, 1950 To Today)

The parabolic spike led to the gold silver ratio collapsing to 17 to 1 ($850 oz / $50 oz). We expect a similar outperformance and parabolic final price move in silver and it is likely that the gold silver ratio will revert to its long term historical average, seen throughout much of history, below 20 to 1.

Bull markets almost always see prices rise to above their inflation adjusted highs. Sometimes prices rise to multiples of their previous inflation adjusted high.

Silver’s inflation adjusted high was $130/oz and we continue to see that as a realistic long term price target. Given silver’s volatility, dollar, pound or euro cost averaging into position remains prudent.

Similarly, when prices have had a parabolic gain – dollar, pound or euro cost averaging out of a position will be prudent as it will be nigh impossible to time the top.

NEWS
Gold slips for 3rd day on rally in stocks, Fed caution – Reuters

U.S. Mint Sales of Silver Coins Reach Record in First Half – Bloomberg

U.S. Mint’s Sales of Silver Coins Reach 1H Record in 2013 – Wall Street Journal

Alan Greenspan’s Tone of Voice Moved Gold and Silver Prices – The Financial Times

Global Fish Prices Leap To All-Time High – The Telegraph

COMMENTARY
Kyle Bass: “Denial” Is Extremely Popular in the Financial Markets – You Tube

If Bernanke Really Shakes The Tree, Half World May Fall Out – The Telegraph

Are Commodity Prices About To Explode? – MarketWatch

Chart Of The Day: When ETF Paper Beats Gold Rock – Zero Hedge

 

2013 Silver Eagles As Low As $2.89 Over Spot!

2013 San Francisco Mint ASE’s As Low As $3.29 Over Spot!

Comments

  1. Gold and silver are both up slightly at the moment. I am expecting a full blown smack down to occur this afternoon as Bernanke starts speaking. Wondering if today would be a perfect day for the cartel to test the lows in both metals? We shall see. 

  2. Coin sales are a small part of silver consumption, if industrial demand falls off for silver, there is plenty of physical available, thus silver is only at $21 oz today.
    Coin sales really need to be 3-4 times of current levels to put pressure on the silver supply.

    • Thing is, the typical laws of supply and demand do not seem to matter in the silver market. Everyone seems to think that the economy is recovering and growing yet silver has been going down. If the economy is expanding shouldn’t silver consumption be rising? No matter how they spin it silver will be taken down. 

  3. This is a strange title for this post since 99% of the post isn’t about US Mint sales.   Anyhow, I would think 2nd half bullion sales are going to be a record too, especially if $20 prices persist!   Important fact to consider is that a lot of people are sitting with fat brokerage statements RIGHT NOW (and no doubt most will stay asleep, but not all) and will start to notice how freaking awesome gold and silver are, and think “Hey, they are down 25% and 55% off their highs now, maybe it’s time to begin buying.”
    At $21-22 silver, people can buy about 2x as much silver for their money as the last 2-3 years, so just as a function of price alone the US Mint sales should stay brisk going forward.  It’s a lot easier to buy a tube or a 100 oz bar now for most people.   Marginal primary silver mines are going to halt production if  prices persist as SRS has demonstrated they do NOT make income at $22 despite the “$8-15 cash costs” they claim, which don’t show the whole picture.  A crash in copper and base metals if it happened would REALLY put a dent in silver supply brought to market.
    People who didn’t blow their wad and go too overweight buying silver at $35-50 are really in a good position to begin a buying program these days.
    Another thought…  With India making it so hard to buy gold for it’s citizens (stopping coins sales at banks and raising taxes/import duties etc.)  will people in India begin accumulating more silver?  Silver jewelry is obviously impractical for investment purposes, but surely coins and investment bars are not?!

    • Oh how I wish I would have remained in stocks until now and was able to flip into silver at these prices. I’m certainly buying at these levels but I committed way too much capital to silver when it was trading between $32-$35. Of course I like most other stackers was thinking that silver would never go below $30 again. With that being said, I have encouraged friends of mine that are in stocks sell some of their holdings and load up on silver at current levels. Sure it could certainly go to $18 or even $15 but I think at this point the risk is much more weighted to the upside than the downside. 

  4. Record deman, low prices has only one function. Funnel physical to the very wealthy and to the east.

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