October 2, 2022

Gold and Silver News & Headlines for December 2


Going for the gold: The Real Deal

You may have heard anecdotal stories about this already. While investigating “cash for gold” companies, Reporters received offers of $112.34 and $766.74 for the same amount of gold. In reality, both offers were probably too low.

It’s a Gold and Silver Rush

I always like these first hand accounts of people trying to buy physical gold and silver. This report hails from Canada.

Is the End of the COMEX Nigh?

Is it really true that gold has fallen 93% of the time this year on the NY COMEX?

Comex Gold Shock and Awe

Deliveries of December COMEX gold and futures contracts begin. The first day’s deliveries were 8,600 100 ounce contracts. This compares to deliveries for the entire month of October of 11,554.

Seasonal Gold Price Trends

At the beginning of November, I took a look at the seasonal price trends for gold. Back then, it seemed that November and December were historical good months for gold. This came as a relief following gold’s seasonally weakest month of October.

Gold came through big time in November rising from $730.75 to $814.50, representing a gain of $83.75 or 11.46%. This marked gold’s biggest monthly gain since September 1999 when gold rose 20.68%.

Will the trend continue? In the past ten years, gold has shown an average gain of 1.67% for the month of December, rising 6 times and falling 4 times. Today on the first day of December, gold is showing a 2% loss, dragged down with the stock markets.

If December doesn’t come through, there’s always January to look forward to. In the past ten years, the first month of the year has produced an average gain of 2.15%. Much of gains came in recent years. Two out of the past three years, gold has posted a gain of over 10% in the month of January.

Gold and Silver News & Headlines for November 26

Dig It: These People are Burying Their Cash

Some people are withdrawing money from their FDIC insured, interest bearing bank accounts to bury the cash (or gold purchased with cash) in their backyards. A few years ago something like this would have sounded paranoid or at least eccentric, but it doesn’t seem that way anymore.

The gold price over Thanksgiving

Will the bullish bent for gold hold true this Thanksgiving Thursday and Friday?

Gold vs. Oil: Gold is Winning

If you haven’t seen a chart of the gold/oil ratio lately, check out this article.

Is the Great Bear Bullish on Gold?

The Central Bank of the Russian Federation continues to increase their holdings in gold. As the price of gold has fallen, their purchases seem to have accelerated.

Bring back the link between gold and the dollar

Many high profile publications are starting to voice the opinion. First, it was the Wall Street Journal, now the Financial Times.

US Mint 2008 Gold and Silver Dwindle, 2009 Releases Delayed

The United States Mint recently released a memo to authorized bullion purchasers regarding the remaining 2008-dated bullion coins and the upcoming 2009-dated bullion coins.

The only 2008 dated bullion coins still being sold by the US Mint are the 1 ounce American Gold Eagle and 1 ounce American Silver Eagle. Final allocations for these coins will take place December 15, 2008. All of the fractional Gold Eagles, Gold Buffaloes, and Platinum Eagles are no longer available.

Sales of 2009-dated 1 ounce Gold Eagles and 1 ounce Silver Eagles will begin on December 29, 2008. Availability will be subject to allocation. The remaining 2009-dated bullion coins will be delayed. The US Mint cites “very limited” supplies of blanks from suppliers amidst high demand.

The full US Mint memo is reproduced below:

November 24, 2008

MEMORANDUM TO ALL AMERICAN EAGLE AND AMERICAN BUFFALO BULLION COIN AUTHORIZED PURCHASERS

SUBJECT: 2008 and 2009-Dated Bullion Coin Products

With the exception of the American Eagle Gold One-Ounce and American Eagle Silver One-Ounce Bullion Coins, all 2008-dated bullion coins have been depleted. Weekly allocations will continue for these two products.

The final 2008 allocation for these coins will be provided on Monday, December 15, 2008.

There will be no bullion allocations during the week of December 22, 2008.

2009-dated American Eagle Gold One-Ounce and American Eagle Silver One-Ounce Bullion Coins will be made available for sale via the standard allocation process on Monday, December 29, for pricing December 30 and order pick-up on Friday, January 2, 2009.

Allocations for these products will continue until the United States Mint is able to meet demand.

The quantities of blanks that we have been able to acquire from our suppliers continue to be very limited, while demand for bullion coins remains high. As a result, it is necessary for the United States Mint to delay the launch of other bullion coins until later in 2009. We will continue to monitor the situation and keep you informed as additional information becomes available.

Thank you for your patience and your continued support of the United States Mint Bullion Coin Program.

Perth Mint Suspends Gold Sales

Another major Mint has succumbed to the unrelenting demand for physical precious metals. Today the Perth Mint announced that they will be forced to cease taking orders until January.

Although the Perth Mint is based in Australia, they do approximately 80% of their business outside of Australia in North America, Europe, and Asia. Demand for their products was also likely seeing a boost due to suspensions and rationing programs implemented by the US Mint.

The Perth Mint has valiantly tried to keep up with demand. At the beginning of October, they hired more staff and added a third shift to keep up with increased demand. After running at capacity production, seven days a week, 24 hours a day for the past several months, they were finally forced to suspend taking orders.

On the same day, the price of gold surged $43.10 or 5.8%, and briefly traded above the $800 level. News reports mainly attributed the gains to “return of safe-haven investment demand” and “gloomy economic forecasts.” More so, I think the physical gold market is sending strong signals to the paper market that are becoming increasingly difficult to ignore.  I think huge daily gains in the price gold will start to become increasingly common as the retail level stampede into gold continues.

Gold and Silver News & Headlines for November 21

Trump Alumn Fired Up About GoldandSilverNow

A former finalist from “The Apprentice” has started a peer-to-peer network for buying and selling gold and silver. The idea is that such a network would avoid the unavailability and long waits necessary to buy gold and silver from bullion dealers. Definitely an interesting concept.

Demand for Gold Hits a Record Even as Institutions Head for Exits

It’s a tug of war between institutional sellers and retail buyers.

Inventory at SLV declines modestly

Some great analysis of inventory and price for the iShares Silver Trust. Since July, amidst a sharp decline in the price of silver, there has been an influx of buyers of SLV rather than sellers.

The Six Biggest Myths about Gold

Buying Physical Silver at the Lowest Premium

If you’ve tried buying physical silver recently, then you are undoubtedly aware of the incredibly high premiums charged above market value. I wrote previously about the premiums for 100 ounce silver bars, which are traditionally a low premium method for acquiring silver. At the time of investigation, premiums were running from 40% to 50%  above the market price of silver.

Premiums for virtually all other methods of acquiring physical silver are also stubbornly high. American Silver Eagles, Canadian Silver Maple Leafs, and other government issued bullion coins carry premiums often well in excess of 50%. The same high premiums persist for generic silver rounds, small size bars, and bags of 90% junk silver. Even 1,000 ounce silver bars are now carrying premiums of 25% to 30%. Many people have been actively looking for the method which will provide the absolute lowest premiums.

One area that I have noticed which seems to offer the lowest premiums is 40% junk silver coins. For those unfamiliar with the term, “junk silver” refers to legal tender coins with silver content, which have little or no collectible value. These coins are bought and sold based on the value of the silver content. In the United States, dimes, quarters, half dollars, and dollars were minted in 90% silver before 1965. A lesser known fact is that from 1965 to 1970, half dollar coins were minted in 40% silver.

While bags of 90% junk silver coins carry premiums in excess of 50%, bags of 40% junk silver coins can be found with premiums as low as 20%. A bag of $1,000 face value 40% silver coins, which contains roughly 295 ounces of pure silver, can be bought for around $3,500. This can be confirmed on various bullion dealer websites, as well as through a survey of completed eBay auctions. Bullion dealers typically sell junk silver in $1,000 or $500 face value bags, while eBay usually has listings for much smaller lots. I’ve found that even these smaller lots sell for around the same relatively low premiums of 20% to 25%.

Why are the premiums so low? Some people consider 40% silver coins too bulky and inconvenient. If you acquire 90% junk silver, you would have the same silver content in less than half the weight and volume. But in today’s environment, aren’t the lower premiums well worth the trade off? In reality, I think this is more of an overlooked area. Perhaps as time moves on and people start to take note, premiums will rise to the same levels as other physical silver options.

Gold and Silver News & Headlines for November 19

Safe

To Prevent Bubbles, Restrain the Fed

Some very interesting opinions are being published in the Wall Street Journal lately. “Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank because it forces it to acquire commodity reserves in order to increase the money supply.”

Saudi Arabia buys $3.5bn of gold in two weeks

But at what price? “News about the Saudi gold rush is bound to fuel speculation about the alleged large physical gold transactions that have been taking place at prices will above the spot price set in the futures market.”

Worth $15,000, will you take $30?

Kids sell a 62.5 chunk of metal for gas money. It turns out they had been breaking into safes.

Silver Available Amidst Shortages

Arbitrage play on physical silver of various weights: Sell 100 oz. silver bars, use the proceeds to buy 1,000 oz. bars, and fabricate those into 1 oz. bars. I’m surprised there are not more people doing this in large scale.

Gold and Silver News & Headlines for November 13

Gold ends nearly $14 lower in broad metals pullback

Maybe gold hasn’t quite decoupled from stock markets and other commodities yet. Quote from the article: “The trade now, if you believe the market is due to fall further, is surprisingly short gold.”

Munich Musings

Has a “black market” developed for precious metals? It’s not as ridiculous as it sounds.

From the article, “A black market occurs when the State mandates a price for a commodity that cannot be produced, bought, sold or had for that price – usually a ploy to make state-reported economic figures look better. The inexorable result is that the price of the commodity will rise beyond the official price to the point where producer and consumer are willing to do business in the shade.”

The Real Story

More details emerge on the huge increase in the silver short positions by two major US banks just as the price collapsed.

December deliveries at the Comex

I keep hearing more and more about the looming default at the Comex for gold and silver deliveries next month.

Nearly All Gold and Platinum Products No Longer Available

The US Mint has abruptly halted sales of nearly all collectible gold and platinum coins. The coins will supposedly go back on sale later this week at lower prices. Let’s hope there’s not something else going on…

US Mint Makes Drastic Cuts to Collector Gold & Platinum Coin Offerings

Today the United States Mint announced some sweeping cuts to the number of products that they will offer to coin collectors. The deepest cuts take place in the US Mint’s offerings of collectible versions of gold and platinum bullion coins.

Most people know about the US Mint’s bullion coin offerings. American Eagle coins composed of gold, silver, and platinum are sold to the public through a network of authorized bullion dealers. In recent years, American Buffalo Gold coins were added to the lineup. These coins are bought and sold primarily as a means of investing in precious metals.

Since 2006, the US Mint has also offered so-called “collectible” versions of the popular bullion coins for sale directly to the public. The coins have been available in fractional denominations, four coin sets, and one ounce sizes. They are differentiated from the “non-collectible” bullion versions by carrying a “W” mint mark. The coins are also struck on specially burnished blanks and come in custom Mint packaging.  In addition, the US Mint has offered proof versions of bullion coins, which have been sold to collectors for many years.

The US Mint’s discontinued products (via Mint News Blog) will include:

  • American Buffalo Uncirculated Gold Coins – These are the collectible versions offered by the US Mint. All fractional denominations, 4 coin set, and the one ounce coin will be discontinued.
  • American Buffalo Proof Gold Coins – The fractional 1/2 oz, 1/4 oz, 1/10 oz coins and 4 coin set will be discontinued.
  • American Platinum Eagle Uncirculated Coins – These are the collectible versions offered by the US Mint. All fractional denominations, 4 coin set, and the one ounce coin will be discontinued.
  • American Platinum Eagle Proof Coins – The fractional 1/2 oz, 1/4 oz, 1/10 oz coins and 4 coin set will be discontinued.
  • American Gold Eagle Uncirculated Coins – These are the collectible versions offered by the US Mint. The fractional 1/2 oz, 1/4 oz, 1/10 oz coins and 4 coin set will be discontinued.

Why are these products being discontinued?

The US Mint would likely cite low sales figures for the offerings, but that doesn’t get to the root of the problem. Basically, the US Mint has had a disastrous time selling the products over the past few years. This was due in large part to the way the US Mint was required to set prices combined with the extreme fluctuations of precious metals prices over the past few years.

The US Mint is required to publish prices for upcoming collectible coin products in the Federal Register. This process seems to take about 30 days. As a result, every time these pseudo-bullion coins went on sale, prices were based on precious metals values from up to 30 days ago.  Any time the US Mint wanted to change prices, coin sales had to be suspended for at least 30 days while the publication process took place.

Throughout 2006 and 2007, sales of these “collectible” bullion coins were suspended numerous times as precious metals prices climbed. Premiums above the precious metal value were in constant flux, since coin prices were fixed and precious metals changed. Typically, premiums would be high at the start of sales, but then lower as precious metals prices climbed. If you timed your purchases right, you could buy the coins for around the same price as the regular bullion coins.

During 2008, the “collectible” bullion offerings were priced early in the year when precious metals prices were at their highs. As precious metals prices dropped from their peaks, coin prices remained the same, making premiums extraordinarily high. For example, the 2008-W 1 oz. Uncirculated American Gold Eagle is currently priced at $1,119.95 (see US Mint website).  Compare this to the gold value of $742. This premium is ridiculously high for a product slightly better than a bullion coin.

The only prices that were actually lowered this year were for the platinum products. Following nearly two months of suspension, platinum coins returned with prices approximately halved. Even after the reduction, prices still reflected huge premiums. The 2008-W 1 oz. Uncirculed Platinum Eagle is priced at $1,214.95 (see US Mint website). Compare this to the platinum value of $837. Another ridiculously high premium.

On the upside, this represents the end of a bad experiment in precious metals products from the US Mint. On the downside, this represents one less way for people to acquire precious metals.