Question to experts

[Reinhart]

To Silver experts on forum,

Can anyone explain me why the silver price is so low while most sellers don't have anything to sell? I try to make my purchases at goldsilver.be but they ran pretty much out of silver. Some things are not adding up here. Can anyone clarify this situation?

Cheers,

Reinhart

[sixgun]

What you are looking at are paper prices. Usually there isn't metal behind these paper contracts so they can be created out of thin air and have been for years. They can be sold in massive numbers to force prices lower.

Some people believe the gold and silver markets have been manipulated for decades - some people believe we are seeing this control system coming apart. There has been a shutdown of refineries and mines - some say the low price on the COMEX and LBMA is due to traders having to sell their metal holdings to cover losses in stocks. The low metal prices then sparked a frenzy to buy physical and so the dealers, mints and refiners ran out. As the refiners and mines are closed this stock cannot be renewed. This has led to premiums shooting up. When things restart, premiums make fall and so despite the spot price of gold and silver being higher the price paid for coins and bars could fall. 

Personally i think we are seeing the end of the price control system which has suppressed precious metal prices for years. There are so crazy things happening - the futures prices are much higher than the spot prices. Futures prices should be in contango (higher than spot) but have been in backwardation (lower price than spot) for a long time. Backwardation would suggest that physical supply is tight and people want to get their hands on metal right now and will pay more - physical supply is tight so we should be in backwardation now but i have never before seen futures price this much above the spot price. i think we are in uncharted territory now.

[5huggy]

Absolutely brilliant analysis from @sixgun - and bang on IMHO! 👍

[HawkHybrid]

https://thesilverforum.com/topic/30164-royal-canadian-mint-temporarily-suspends-production/?tab=comments#comment-346189

quarantine, reduces the movement of all physical products including coins.

local coin stores have delays for stock replenishment.

 

HH

[Airhead]

19 hours ago, sixgun said:

What you are looking at are paper prices. Usually there isn't metal behind these paper contracts so they can be created out of thin air and have been for years. They can be sold in massive numbers to force prices lower.

Some people believe the gold and silver markets have been manipulated for decades - some people believe we are seeing this control system coming apart. There has been a shutdown of refineries and mines - some say the low price on the COMEX and LBMA is due to traders having to sell their metal holdings to cover losses in stocks. The low metal prices then sparked a frenzy to buy physical and so the dealers, mints and refiners ran out. As the refiners and mines are closed this stock cannot be renewed. This has led to premiums shooting up. When things restart, premiums make fall and so despite the spot price of gold and silver being higher the price paid for coins and bars could fall. 

Personally i think we are seeing the end of the price control system which has suppressed precious metal prices for years. There are so crazy things happening - the futures prices are much higher than the spot prices. Futures prices should be in contango (higher than spot) but have been in backwardation (lower price than spot) for a long time. Backwardation would suggest that physical supply is tight and people want to get their hands on metal right now and will pay more - physical supply is tight so we should be in backwardation now but i have never before seen futures price this much above the spot price. i think we are in uncharted territory now.

I was wondering why Atkinsons would pay £1.30 over spot for a 1oz Britannia, you have explained it, many thanks.

https://atkinsonsbullion.com/sell-to-us/silver-coins/2015-uk-britannia-1oz-silver-coin  

[SilverGameOfThrones]

It is low because i still need to grab 1000oz before it  FINALLY BLOWS 

I don't think we have too much time left  so am nervous  as every transaction is taking WEEKS to ARRIVE 

[SilverGoldSaver]

3 hours ago, SilverGameOfThrones said:

It is low because i still need to grab 1000oz before it  FINALLY BLOWS 

I don't think we have too much time left  so am nervous  as every transaction is taking WEEKS to ARRIVE 

Good one!    I am also waiting on some orders I've placed a couple weeks ago... some have already been cancelled due to not having inventory

[Serendipity]

4 hours ago, SilverGameOfThrones said:

It is low because i still need to grab 1000oz before it  FINALLY BLOWS 

I don't think we have too much time left  so am nervous  as every transaction is taking WEEKS to ARRIVE 

It’s the same problem over here in England. The Royal Mint Bullion has virtually no silver bullion in stock at the moment and I have to wait until early May for the arrival of a numismatic sovereign which I ordered.

[Bimetallic]

On 06/04/2020 at 16:55, Reinhart said:

To Silver experts on forum,

Can anyone explain me why the silver price is so low while most sellers don't have anything to sell? I try to make my purchases at goldsilver.be but they ran pretty much out of silver. Some things are not adding up here. Can anyone clarify this situation?

Cheers,

Reinhart

The founder and CEO of JM Bullion came onto the Silverbugs subreddit the other day and explained the situation.

The reason for the shortages and extremely high premiums is an explosion of demand for physical bullion because of the pandemic. Basically stackers.

The explosion of demand was further juiced by the fall in the spot price, but it was mostly caused by the crisis.

The spot price fell, along with gold, because in the short term metals move in the same direction as the stock market, and people and institutions were cashing out. Same thing happened in 2008. It's only in the longer term, like 1 to 3 years, that metals climb after crises.

Some people thought premiums were high because dealers had to sell inventory that they paid much more than current spot price for. But it turns out that major dealers are fully hedged, so they're not exposed to changes in spot price. They make their money on the premium spreads, not on predicting spot prices.

[GoldenPhil]

On 08/04/2020 at 02:35, SilverGoldSaver said:

Good one!    I am also waiting on some orders I've placed a couple weeks ago... some have already been cancelled due to not having inventory

I have very recently used Baird & co \ Baird Mint as billion by post stopped delivering. Before using Baird I tried to open an account with the royal mint. The online system said my account would be open that day. It was a lie. I called them a few days later and they said it would be within a week. It didn't happen (another lie). I then emailed and was told it would be one more week, however guess what that was a lie as well. So it's been about 3 weeks now and the royal mint (bullion) still haven't opened my account. Fortunately in the meantime I found Baird . On their website it said gold delivered in 2 weeks, silver 3 weeks, platinum a month. The gold and silver I ordered arrived after just a few days (less than a whole week). They seem to practice underpromising and over delivering. The Royal mint bullion jokers could learn from them. 

[TonyS]

I’ve been waiting nine weeks for silver from Baird’s. No replies to e-mails – zilch.

[GoldenPhil]

Wow. Did you try calling them? 

[SilverPirate007]

4 hours ago, TonyS said:

I’ve been waiting nine weeks for silver from Baird’s. No replies to e-mails – zilch.

That’s worrying as I’m waiting to

[GoldenPhil]

57 minutes ago, SilverPirate007 said:

That’s worrying as I’m waiting to

Wow I must have got lucky