Howdy folks,
Very interesting. We're nearing the end of the rebalancing period [read: 15th] and so far, it hasn't dented the price. There seems to be a run on physical silver across the spectrum. From what I'm reading, industry is trying to lock up supplies, while the sovereign purchases continue with the debasement trade, and throw in the Powell prosecution . . . are all driving more people to the mattresses. That's hitting the retail market. Apmex is listing $88.99 as spot and $100.98 for an Eagle. The divergence between the paper price and the real price is widening. Here's a quote from Liberty Coin's FB page from 27hr ago.
"Be careful out there. Gold and silver prices are very strong in record high territory this morning. As of a couple minutes ago, here were the bid and ask spot prices at which Liberty Coin Service was calculating its buy and sell prices for physical precious metals products:
Gold: bid spot price $4,615.75/ask spot price $4,623.50
Silver: $84.91/$85.80
Platinum: $2,322.00/$2,357.00
Palladium: $1,852.00/$1,891.00
Already this morning Liberty Coin Service has been besieged by customers looking to purchase bullion silver. Apparently, Liberty is one of the dealers in America with more silver inventory in stock than most, but supplies for immediate delivery are starting to run low."
This is a pretty good read for mainstream media. BTW, the gold/silver ratio is 1/52.
https://finance.yahoo.com/news/gold-silver-surge-as-assault-on-fed-sparks-rush-to-precious-metals-151113516.htmland so it goes,
peace,
rono
Comments
Appreciate the timely update. Been wondering about all of it.
OJ
Got bored during the winter of 2017 and assembled a collection of about a dozen Morgan Silver Dollars. ISTM silver was trading around $15 back then. Used reputable online sellers. All except 2 are securely encased with an ID number from PCGS or NCG the top grading agencies. Most have been "imaged" so potential buyers can access the site, enter the coin's ID and pull up photos. Coins are not bullion. Big difference. But my experience from the 70s is that they tend to run together.
Few months ago found a tarnished 1-ounce silver bullion coin in a junk drawer. No idea where it came from. With silver over $70 I walked into a small local coin shop. A young fella ahead of me cashed in a newish looking stack of silver bullion coins. Took quite a while. He received a bit over $1600 cash. Then I offered up my sole coin to the proprietor who offered $60 - far below spot. I accepted. He copied down my DL# on a form I was required to sign "to confirm this for my boss". I dunno. It didn't appear to be for tax reporting. Took a photo for my records.
Yesterday with silver north of $90 I returned. While not professionally graded / certified like the rest of my collection (which are kept in a bank vault), the two Morgans I had with me are gorgeous and would grade MS 60 or better. Fair value around $120 - $130 each. (A Morgan Dollar contains a bit over .77 troy ounce silver.) He declined to make an offer, but instead asked for my "bottom line". I said $200 for the pair. He quickly handed them back without even taking a close look. I mentioned each contained more than $70 worth of bullion. His reply - "Yes, it's so expensive no one is buying it."
Why the run up? All the reasons @rono and others have cited have validity. I'd say at this point the main driver is the prospect of civil instability across the U.S.as the election nears. I hope that doesn't happen, but many probably view the metals as "last resort" survival money. I expect a hard correction someday. But that could be months or years away. I limit my gambling to $1 wagers on DraftKings!
dYou kids have any snow up there?
Civil instability is one of many reasons for increased demand. Geez, it's the perfect storm for a bull market in silver.
Industrial demand is huge. Silver is the best conductor and reflector and a great antibiotic. Solar paste goes into every solar panel. It's in all EVs and AI electronics. Also used in photography and medicine. None of these users gives a rats ass about price. No silver - no production.
You have enormous debasement and de-dollaring trade. Ever since Russia invaded Ukraine and we seized their dollar denominated assets, every other sovereign country has been diversifying out of the dollar. Buying gold, silver, Euros, crypto, etc. in order to reduce their outsized holdings of dollars. As to debasement, there are many folks no trusting fiat currencies in light of the huge deficits, continued spending, low interest rates and the restart of quantitative easing.
Now we can chat about the civil unrest/survivalist demand. Yeppers. Hell, I started going to the mattresses when that Cheeto POS go reelected. Now I'm trying to reduce my holdings in and of the dollar. Foreign hedged bond funds, what. A pot-full invested in the miners (silver, gold, and now, copper).
All this demand faces a restricted supply. Artificially low prices over the past several decades have discouraged exploration and expansion of silver mining. Seventy percent of all silver comes a a byproduct of lead, zinc and copper. A new mine is 7-10 years out. And unlike gold, silver gets used up in industry. Gold never goes away. Silver does.
So, you've got a supply/demand issue that central banks cannot resolve. They can print more fiat currency but not silver.
The GSR is now 49 to 1 and 50 is a huge threshold. Silver is about to go thru $100 an ounce. A silver 1964 is now worth $17 in bullion.
BTW, in the past year, silver is up 208% and YTD it's +30.75%.
and so it goes,
peace,
rono
You inspired me to rummage through a few junk drawers today.
I rolled $57 in coins...hope the bank still takes them!
I separated out my pre-1982 pennies... heard they have doubled in value just seating there...hope to net 50 cents and the 25 coins... again if I can find someone who will part with 50 post-1982 pennies... aren't all pennies on the chopping block?
Feeling Lucky today, thanks!
Calculator
I always thought of the following advice as a great way to think about saving in the short term (do as much as you can to save your pennies) and investing over the long term (if you leave the invested pennies alone they become dollars):
"Watch your pennies and your dollars take care of themselves"
So I said to myself, "what the hell, let's play with silver a little."
In six weeks I've spent $7177 on SLVR & SILJ, and it's now "worth" $9318.
I like this thing!
A 29.83% gain in six weeks—not too bad!
Thanks, @Observant1, but all the credit goes to @rono. I did have the guts to increase my original couple of thousand original stake on a couple of pretty good dips, but other than that rono is The Man.
@Sven- Thanks for the compliment, but as I just said, it's all rono's doing. I know less than nothing about the uranium situation, but as I'm sure that you also know from general news reporting there is consideration of re-starting one or two decommissioned generating reactors, and in a few years hopefully there will be a few new simplified design reactors coming on line. If there's money to be made on the uranium fuel side I would be very surprised if major insider long-term money has not already been active on that. Very good question, I think.
Thanks for the kind words, Dan.
I bought Sprott Physical Uranium SRUUF back when Trump was elected after he dissed solar and wind. Feh, what's left?
Pulled back a little on Friday, but still up 27% YTD and 199% for the past year. With the paper price at $90.88 the issue is that in Asia, real silver is going at over $100. That, my friends, is the divergence. Gary always said, that's where you find the action - at the divergence.
What I plan to continue to do at this point is shift what little paper silver I own into silver mining stocks. If they could pay the bills at $20/oz, think what their profit looks like at $90.
Physical bullion is first, mining stocks second, paper bullion a distant third and be nimble my friends with paper bullion. They can issue more contracts and print more money but they can't print silver.
and so it goes,
peace,
rono
$90 an ounce this week and, despite a pullback on Friday, still up by around one-quarter this year.
The metal has now tripled in value over the past 12 months amid wild price swings.
Dealers say stocks of silver coins are selling out in record time,
while precious metal traders warn of a global shortage.”
https://archive.ph/eWPmS
I dunno... that sure isn't @rono 's take:
has led to the strong rally in silver.
"The eye-popping gains — eclipsing even gold’s historic rally — have come as a surge of speculation
by retail investors has collided with a five-year shortfall in silver supply.
At the same time unusually high silver stockpiles in the US and China have drained supplies of bullion
from vaults in London, where global prices are set.
'It is the perfect storm,' says Philip Diehl, former director of the US Mint.
'We have been in a long-term supply deficit, and it is just getting worse.'”
A Sprott ETF is certainly one idea but less risky might be a general energy and natural resources fund like GRHAX which has chunks of Uranium silver Gold and Energy
As I have mentioned before SII Sprott Common Stock is also up dramatically but does not depend on one of these markets as they have ETFs in all of them
NLR a "nuclear" ETF has Uranium but also power producers and even some utilities
Probably less of a volatile ride until Trump pulls the plug
I tend to fear retail speculation. True demand and retail speculation are not mutually exclusive.
So I said to myself, "what the hell, let's play with silver a little."
So I spent $7177 on SLVR & SILJ, and last Friday that was "worth" $9318. As of tonight, looking at $10720. That's a 49.5% profit.
If I had more guts I could have bought 70k or 700k instead of 7k. This kind of stuff is enough to make any of us just crazy.
Well, anyway we're ahead, at least so far. Thanks again, @rono. I expect that you're doing well also.
https://www.morningstar.com/funds/xnas/grhax/performance
https://www.morningstar.com/etfs/xnas/slvr/quote
https://www.morningstar.com/etfs/arcx/silj/quote
As OJ pointed out, at our age, we had pretty much put our investments on Cruise Control. However, being a 'stacker' for some 70 years, AND a student of our own Gary Smith, I have been trained to look for divergences and explore them for opportunities to momentum invest. When silver diverged, the alarms and sirens around my house were disturbing the neighbors. Gee, it looked like New Year's Eve in NYC or Vegas. From my youth, I remembered, when it's time to party . . . pass the bong. Besides, at my age, who knows how many parties I'll have left so no Half-Stepping . . . just load the boat.
In my main retirement account, I'm up to 63% PMs. Granted, a lot of this is recent appreciation (which has resulted in nose bleeds for many). Historically, on this board, I had been recommending 3-7% for EVERYONE while All the major banks and advisors, scorned the metals. Now some are suggesting 20%. feh. I'm not rebalancing. No good options other than silver for gold.
My gains have been very obscene, in a delightfully orgasmic way. That said, I'm not spending my paper gains, just like I recommend against paper metals. The PMs could drop 20% tomorrow like they did in 1980 and 2011. While I don't believe that will happen based upon the fundamentals, WTF do I care, I bought my first roll of Silver Eagles at $4/oz.
The fundamentals all point to a continued bull market. There are so many facets to the demand equation, they have to take a number. Sovereign wealth funds, Central banks, debasement trade, Sell America, TACO trade, Industrial demand, speculation, CYA, and so forth. The Supply equation is equally crowded. Mining limitations, international strategic export restrictions, hoarding and stockpiling, etc. And, unlike gold, when silver is used in many applications, it's effectively destroyed.
So, I'm long up to my eyebrows and staying that way for the foreseeable future.
And so it goes,
peace,
rono