Rare Coin Investor

Silver prices have dropped to their lowest level since 2009, boosting demand for the physical metal at a rate not seen in a decade.

Supplies of physical silver, as well as gold, “remain well below extremely strong demand,” said Dana Samuelson, president of precious-metals dealer American Gold Exchange, Inc. “The fall in the underlying gold and silver prices, coupled with the potential recession due to the sharp economic downturn the coronavirus is causing has spurred the public to buy physical precious metals at the fastest pace in 10 years.”

On March 12, the United States Mint said it temporarily sold out of American Silver Eagle bullion coins. “Our rate of sale in just the first part of March exceeds 300% of what was sold last month,” the Mint said.
Sales of the one-ounce American Silver Eagle coins were at 3.1 million so far this month, as of Wednesday, compared with total sales of 650,000 in the month of February, according to data from the Mint.
“With both the U.S. Mint and the Royal Canadian Mint on back order for the most popular one-ounce gold and silver coins in the North American market, dealers have scrambled to buy anything that remains available to buy, driving bids substantially higher for all physical gold, silver…coins and bars that are immediately available,” said Samuelson.

On Comex, silver futures prices saw their most-active contract SIK20, 3.840% drop to $11.772 an ounce on Wednesday, the lowest since Jan. 22, 2009, according to Dow Jones Market Data. Prices moved up a bit to settle at $12.134 Thursday.

Silver’s price ratio to GCJ20, 1.683% limbed to historic levels at roughly 130 ounces of silver to buy one ounce of gold.

Silver prices have seen sharp declines as “institutions have dumped silver for cash to pay for margin calls and other obligation, as well as hoarding cash,” said Edmund Moy, who was director of the U.S. Mint from 2006 to 2011.
He told MarketWatch that the rise in silver bullion demand is “just the beginning,” and is “primarily driven by individual investors who see silver as an affordable safen have and because of the lower prices, a buying opportunity.”
“Affordability is a major factor…silver appeals broadly to a less wealthy investors but a small change in prices is a larger percentage change for silver—and that upside attracts additional investors,” said Moy.
“Eventually, low silver prices will catch up to limited physical supply and increased physical demand,” he said. “And once the global economy begins to recover from this pandemic, silver demand from industry will recover too.”
But it’s silver’s industrial aspect that makes some analysts a bit more cautious.
Right now, silver futures look “ready to at least bounce in a significant way,” said Spina. However, “if there is another global market selloff, silver futures could get one more historic dump to [the] $10 area.”
“Much of the industrial demand news is not going to be good or great for silver for the coming weeks or months, so we need to get through this biggest contribution factor to silver,” he said. “Until then, investment demand is returning and if it keeps like this for several months and industrial [demand catches up]…it could really squeeze the price right back up and quickly!”

https://www.kitco.com/commentaries/2020-03-06/Panic-in-the-streets-gold-bonds-exploding-higher.html

Will you look at what is going on the all markets. We are seeing a panic attack. As I write this at 4 a.m. EST, gold and 30-year Treasury bonds are exploding higher. Gold is up another $18 based on the June futures and bonds are up over five full points, which is one of their biggest moves in history. Silver and platinum are slightly higher just because of the strength of gold, but both look weak.

Gold looks like it is ready to test the recent blow-off highs from Feb. 24. The $1,700 level in the June futures now look like a forgone conclusion in gold. Gold has rallied over $130 from the lows of last week and is moving in a parabolic formation. Gold should have a pullback in the next day or two; however, the rally is on.

Silver is weak and looks to be capped at $17.50 in the May futures, while platinum looks the worst with heavy resistance at $880 in the April futures. Treasuries are exploding as the fear trade builds. This is all-out panic, and we can thank the Fed for that. The Fed choke job on Tuesday with the emergency rate cut has sent fear assets flying. Pass the Xanax and enjoy the move.