February 24, 2024

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…

Gold and Silver News & Headlines for November 10

Timing the next rush to gold

Thoughtful coverage to both sides of the gold story, price weakness due to forced selling of paper contracts and price strength due to overwhelming physical demand.

Why Jim Rogers chooses silver over gold

Gold is down 12 percent versus silver’s one third sell off. If prices move to the upside will the same ratios hold true?

The never-ending search for gold

Tales from the Great Depression and whatever we’re in right now.

Gold and Silver News & Headlines for November 3

Premium for silver coins soars

Premiums are climbing for silver in any form. Even dealer buy prices for junk silver coins are a few dollars above spot.

Count up October’s losses

Has your barber recommended investing in gold and silver yet?

Zimbabwe gold mines face collapse

Zimbabwe’s gold mining industry was Africa’s third largest nine years ago.

Is the silver futures market about to crack wide open?

“COMEX traders are trading contracts either side, long and short, of 479.4 million ounces of silver but only have 131.5 million ounces behind it.”

Gold and Silver News & Headlines for October 29

New 49’ers seek California Gold

It’s the great new outdoor activity of our time. Prospecting for Gold.

3 men with gold confuse sheriff’s sale

Three men attempt to buy foreclosed properties with bags of gold and silver. The sheriff conducting the sale opines that the three men are “anarchists” engaging in “paper terrorism.”

The Coin Market As We See It

A market report from Legend Numismatics. The last section is of interest. Would be buyers of gold bullion are increasingly turning to generic gold coins instead, meaning semi-collectible coins such Gold Double Eagles from the early 1900’s.

New policy on purchase and sale of silver Libertad coins

A new policy from a Mexican bank with over 800 branches. They will raise their re-purhcase price for silver coins to align with the re-sale prices and try to match public supply and public demand. Basically, they will establish a price for silver based on actual market forces rather than Comex prices.

Premiums for 100 Ounce Silver Bars

There has been much recent coverage of the rising premiums being paid to purchase physical gold and silver bullion. This has been cited as a consequence of the extreme demand for precious metals and evidence of the growing disconnect between market prices and physical prices.

I decided to look at some data to calculate exactly what kind of premiums are being paid and see if any trend or patterns in the data could be determined.

Specifically, I looked at selling prices for 100 ounce silver bars on eBay. I decided to use this as a source of data since 100 ounce silver bars have historically been a low premium method to acquire silver.  Also, bars of silver are relatively undifferentiated. Bullion coins from different countries or with different dates often carry premiums based on those differences.

I used eBay data because it was accessible. Completed auction records can be obtained for the prior two weeks or more. Also, I believe that eBay represents a real time, liquid market of buyers and sellers who discover prices through a bidding process. Quoted dealer prices may be for delivery at a later date and may not represent actual available supplies.

There are some possible flaws with this method. It does not take into account potential premiums for different manufacturers. I don’t know if people pay more for different makes of bars. Also, shipping costs are not included in the price data used. Some auctions may carry higher shipping charges which would impact the final selling prices. And lastly, some auctions were “true auctions” which start at a minimal opening bid while others were fixed price listings.

Data was available from October 13 to today’s date. I did not include data for today or October 13, since it may represent partial data. I determined the average price for each day’s auctions which closed with a sale. I compared this to the closing market price of silver for each day.

Here is a summary of the data:

Average Price for 100 Ounce Silver Bars on eBay Compared to Market Price of Silver

Date Bars Sold Ave Price Market Price Premium Premium %
14-Oct 12 $1,557.17 $10.89 $468.17 42.99%
15-Oct 10 $1,524.70 $10.92 $432.70 39.62%
16-Oct 29 $1,465.07 $9.99 $466.07 46.65%
17-Oct 19 $1,427.68 $9.56 $471.68 49.34%
18-Oct 28 $1,422.00 $9.56 $466.00 48.74%
19-Oct 46 $1,419.04 $9.56 $463.04 48.44%
20-Oct 21 $1,431.76 $9.79 $452.76 46.25%
21-Oct 17 $1,391.94 $9.86 $405.94 41.17%
22-Oct 19 $1,428.11 $9.84 $444.11 45.13%
23-Oct 25 $1,382.84 $9.34 $448.84 48.06%
24-Oct 37 $1,367.78 $8.88 $479.78 54.03%
25-Oct 13 $1,389.31 $8.88 $501.31 56.45%
26-Oct 33 $1,329.91 $8.88 $441.91 49.76%
27-Oct 15 $1,337.33 $9.01 $436.33 48.43%

Some charts based on this data appear to the right. (Click for larger versions) The data is only for a limited time frame, but it does spur some interesting observations.

The premium paid for a 100 ounce silver bar has ranged from 39.62% to 56.45%. The premium represents the amount paid in excess of the so-called “market price” of silver. People are clearly paying astounding premiums to acquire physical silver.

On October 15 and 22, the market price of silver dropped. In each instance this caused the percentage premium to rise. This lends some evidence to the anecdotal observation that a decline in market price only spurs greater demand for the physical metal.

Two distinct prices for silver seem to exist. The paper price for the contractual right to acquire future silver, and the physical price to acquire real silver, in hand. How and when will this situation resolve itself?

There have been several recent reports of bullion buyers seeking to take physical delivery of silver and gold from the COMEX. This would allow buyers to purchase real silver at the heretofore “fictional” paper price. If these deliveries take place and become a dependable source of purchasing physical silver, premiums for 100 ounce bars and other physical silver would likely begin to subside.

On the other hand, some are voicing the possibility that since the COMEX only has small coverage of physical metal for outstanding contacts, if enough contact holders demand delivery they will be forced to default and settle in cash. If this occurs, the likely result would be soaring market prices for silver and potentially greater premiums as the argument for physical scarcity gains another leg of support.
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Gold and Silver News & Headlines for October 25

Links to some excellent gold and silver related stories and blog posts:

A Golden Opportunity?

In Russia, investing in gold is difficult and any profits are hampered by 18 VAT charged on bullion purchases. As an alternative, some turn to jewelry. Sales of gold jewelry have surged 50% in the past two months.

Why the Price of Gold is Sinking Fast

Some great outside the box thinking about what’s keeping the price of gold down. Read the full post, but here’s my attempt to quickly summarize the idea: Gold and stocks are supposed to be negatively correlated. But since diversified investors now own both, does that make gold and stocks correlated?

How to Buy Physical Gold and Silver on the COMEX

The idea seems to be catching on.

Gold and Silver News & Headlines

Links to a number of interesting or notable gold and silver news stories or blog posts:

Platinum Almost the Same Price as Gold

Safe haven metal versus industrial metal. Will we reach parity?

Taking delivery of 1 to 5 million ounces a month

A very innovative idea… actually taking delivery of physical silver from the Comex.

Yes, We Have No Silver

Have you recently tried to buy physical silver near its market price? Here is the brief tale of one man’s frustrating quest.

Gold ETF Reaches One Dollar Per Tonne

Even though the price of gold recently experienced a rapid decline, “tonnes in the trust” barely moved. As the author says, “For gold, the price goes down, but investors don’t sell.”

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