What is happening?
Physical demand for gold, and especially silver is VERY strong. Silver deliveries are delayed for a minimum of 4 weeks and as much as 8 weeks or longer. Premiums on physical silver are up substantially as the physical demand for silver far outpaces supply. There are no silver rounds or silver Eagles available for immediate delivery anywhere.
On the other hand, there is an abundance of paper gold and silver. Those who were long SLV, GLD, leveraged ‘ProShares’ type ETF’s, futures contracts and others have largely been liquidated. The volume in gold futures on the COMEX yesterday exceeded the volume for S&P futures contracts – something unheard of.
To quote another writer, “nothing has been fixed from the 2007 stock market collapse, NOTHING! What has happened is the world is we are in TRILLIONS of dollars, Euros, Yen, etc, in DEBT. We are in a debt bubble that is getting ready to burst. The smart money is shocking the metals market to get the weak hands out so they can acquire at lower prices. The trend with governments and Central Banks is BULLISH on precious metals because they know that the current currency war is a race to the bottom and the only safe haven currencies are gold and silver!”
Please remember that in 2008, silver went from approximately $22 to $9 – and then rose to almost $50. If we see that same proportionate correction now, silver could go as low as $19.80 – call it $20.
There is a diametrically opposed price relationship between PAPER prices and actual PHYSICAL prices. Physical gold and silver products are vanishing from the market place. We had an extremely difficult time yesterday buying silver from any of the twelve U.S. Mint Authorized Purchasers.
Hold what you have. Is this the absolute bottom – probably not. Do current prices represent good value – yes, without a doubt.
Rest assured – this too shall pass.
