We discuss the supply and demand factors for gold with Gary
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The gold markets certainly do provide an interesting twist on supply and demand!
Absolutely David, from my experience with manufacturing, distribution, wholesale and retail, that’s how it works.
Neat you mention your “real life” experience, WGC mentioned the other day demand for gold has decreased, anyone having issues with silver could check SD Bullion, they have all you want, any quantity, at least that’s what their advertising.
On the other hand, I have had people on this site tell me that a mint running to capacity is a shortage so maybe its perspective, Ive never had an issue acquiring gold or silver tho.
David,
That still doesn’t explain why price doesn’t just rise to curb demand. Why wouldn’t the mint just raise price to halt the shortage. Any normal business would raise price if their product was flying off the shelves and they couldn’t keep it in stock. The only reason the mint is selling out is because their price is determined by the price of silver in the futures market. And that price is obviously too low.
Very true, Gary!
I havnt checked the % of other silver coins compared with maples.
But maples are not the only silver coins the canadian mint produces, and there are lots to purchase.
The Canadian mint runs by budgets for product, only so many maples will be budgeted for. As well as budgeting time to mint, the Canadian mint produces currency not only for Canada but many other countries as well.
My point of course is the mint has more responsibility than just maples.
Im sure its the same in the states.
The Australian mint had a neat explanation for running out, lack of qualified labour.
Gary – I enjoy your commentaries. You have made some excellent calls lately – oil for example. Keep up the good work!
Do they have a mandated premium by law perhaps? Maybe not.
I mean the US or other Mints.
I do not believe that there is a mandate on the amount of the premium.
I just did a whole FAQ on coin shortages that explains why mints don’t raise prices, as well as a number of other issues, read here http://research.perthmint.com.au/2015/08/12/coin-shortage-faqs-telling-a-real-shortage-from-a-capacity-shortage/
Many thanks Bron.
We will post this.
Well price does rise versus demand Gary but it is only on a local basis. It was just reported here yesterday that one once junk silver was selling for 30 dollars an ounce and upwards on Ebay.
On a local basis price can rise to any level the market will support. But what you are neglecting here is that gold and silver are globally traded commodities and thus they need to reflect aggregate buying and selling in the futures where prices are determined.
Last year there was a famine in South Sudan. But I can tell you with a 100% degree of certainty that did not impact on the price of grains such as wheat and rice. It was in fact only on the local level within select regions of Sudan that prices driven by panic an demand were spiking.
So why do you think the rest of the world still bought bread for pretty much the same price? Serious question Gary….you cannot compare the price of fresh bottled water during Hurricane Katrina to what ordinary people paid in New York on the same date of that disaster.
In any case, gold and silver are only partially driven by investment demand. But trying to divine true value by looking at US mint strikes is about as useful as trying to determine the price of water or wheat based on regional emergencies or panics.
Interesting point, David. Thank you
Agree with you Gary. People may say it is on resale level. But question is why they let it happen repeatedly. Gold and silver is in such small volume. The transportation and fabrication should not be a bottle neck for such long time unless it is intentional. I cannot believe planners are so stupid. If they do this in Toyota, the company would have bankrupted.
The intention is to ration the demand. The cost of buying is stupid. It cost one 15% above spot to acquire physical. The cost include premium, bar fee,shipping and insurance. The worst offender is US Mint and US is also the biggest manipulator. Is it coincident?
And that, Lawrence, is a very good point!
Excellent points Gary brought up today and hard to argue with. Investor demand always picks up when price climbs. Al’s point that ‘the store of value’ reason doesn’t play out with the herd, even though many of us can buy into that as a reason for holding some.
The following article has some good logic in it from one of my favorites; Saville–http://news.goldseek.com/SpeculativeInvestor/1439993160.php
May not “play out with the herd” but it sure does play out with me!
Look at the above posts, they confirm my long held conclusion. In China, people has nothing but suspicion to the system and in the West people have nothing but confidence to their system. When you lost your vigilance against the government like the founding fathers suggested, people get what they deserve.
Another great point about vigilance, Lawrence!
So true, Lawrence, and Canadians in general seem to be among the least suspicious of their government —even compared to U.S. citizens.
Canadians are like The Greeks they will always take the path of least resistance, we had a chance to vote in a conservative leader 1.5 years ago who wanted to cut one hundred thousand government jobs in The Province Of Ontario, he was run out of Dodge fast. Now we have the biggest provincial debt that will never be paid back and is increasing daily.
I remember a poll about two or three years ago that showed Obama’s approval rating among Canadians was much higher than it had ever been among Americans. The average U.S. citizen looks sophisticated by comparison; now that’s bad!
Compared to George,Jeb,John and Hilary Obama looks like a frigging genius.
Maybe Americans have yet to figure that out.
Even if we split hairs that is complete nonsense, Matt. Five of a kind is much closer to the mark when describing that group.
Your assessment is exactly the kind of “thinking” that scares the shit out of the few who actually do their homework rather than relying on perceptions that are the result of carefully crafted MSM illusions.
Interesting comments about Canadians.
Interesting story about Europeans. Before the 1008 US elections, I was speaking at a conference in Germany. Speakers got together for lunch later and I was asked if I thought that he would get elected. I answered that I could not vote for him after reading The Audacity of Hope. The response from one of the others was that if he did get elected, the approval rating of the US would sky rocket upward around the world!
Wonder if that still holds true?
I just took a look at 2008 silver demand by application.
7% coins,2% investment,1% de hedging.
The rest, industrial ,jewelry silverware and photography demand = 90%
Guess people here might consider coins investment, so, that 9% investment sure seems to hit above its weight if its really influencing price a much as the blogosphere would have us believe.
Does 9% of world demand really influence the price that much? I don’t know, maybe it does.
I doubt how much photographic demand is left. All the industrial demand cannot be curbed, otherwise you face halt of production and create bankruptcies. The investment demand is the only part which can be reduced without hurting industry. So it is why eventually the price will go up simply due to industrial demand in silver.
Of course all industrial demand cannot be curbed, but the demand from the photographic industry has to have dropped.
I just have to ask, how does industrial demand not drop when fewer people are buying product? Heck, on the natcore thread its stated zero silver will be needed for solar and photography demand keeps dropping as well.
The world economy is slowing = less demand for product.
Off topic a little, but solar is getting a good run for its share of the market supplying energy from other sources. Not using silver in panels doesn’t really mean solar is the slam dunk some people think it is.
Silver hasnt been holding solar back from expanding its share of the market.
Maybe just the way I see it.
Great comments today BB!
Thx Listener, just got an idea, what % of non maple silver coins compared to maples are sold.
Thinking this way, why on earth would the mint even bother with maples?
Have you seen the prices of those collectible coins? They are sold at postal outlets, the staff there tells me they sell out of everything on a continual basis.
Running out of Maples could merely be a good business decision on the mints part.
I know with my retail stores I had more shelf space for the most profitable products.
Just a thought, havnt checked into it yet.
2008 is a long time ago.
Currently almost NO photography demand, even X-ray use now computerized.
Little silverware demand .Little de-hedging anymore.
Coin purchases up 4-fold in US and Canada.
Silver purchases in India, much higher.
China has seen huge demand growth in silver jewelry since it becomes more popular to let children ware silver to expel devils, a tradition they could not afford for last 100 years.
Another thought as to why America and Britain hated silver so much they killed it every time it raised its head to remotely compete with their bloated fiat systems.
I was told that they killed JFK as well, who was going to use silver to replace FRN
Gentlemen,
I would like to strongly suggest to all of you that you read a book entitled Unlimited Access. It was written by an FBI agent who worked in the Clinton White House. YOU WILL SIMPLY NOT BELIEVE IT!
Pretty hard for a person like that to lie!
There is still quite a growing use of Silver in medical/dental, electrical, water filtration, clothing to reduce bacteria (socks/pants/shoes), and as a health supplement. I’m not sure it will make up the difference in photography, and the reduction of silver in solar panels, but some of it washes out.
With the world economy slowing down everywhere, I would think that there would be significantly less demand on 90% of the silver supply, that should mean a lowering of prices.
Doubt if there is a shortage coming any time soon, but psychology? That’s another story, and that doesn’t have to have anything to do with facts.
No it does not have anything to do with “facts”.
“This brings back memories. When I was a kid, in fact, one of the things that I wanted to inherit when my grandfather passed away was a barometer that sat in the panhandle of Texas – that is where their home was – it sat up on the counter. The panhandle of Texas is tornado alley. Everyone knows it. We were down in the storm cellar some summers a couple of times per week as storms passed. But I remember how important the barometer was to him. He would walk up and he would tap it three times with his finger, and he would look at that barometer, and lot of times he did it with the kind of intent that was someone trying to protect his family from an impending problem. Right now, all the barometers, – it is not just the barometer of gold, but all the barometers are not only broken, but they are being manipulated. A broken barometer just sits there, but a manipulated barometer can actually kill you.”
I agree with the barometer concept, Gabriel.
The Fed did not say QE was a mistake, but rather not clear it worked.
The Federal Reserve is a Privately-owned organization, owned by bankers.
Suppose you are the Fed and have two choices:
Choice A: Do nothing, which is possible the best choice for the country in the long run, but might inflict temporary pain on everybody.
Choice B: Create money for QE, which will damage the currency in the long run, but will benefit banks immensely. (Indeed stop many bankruptcies in the financial sector) and won’t receive much criticism because it will allow pumping of bubbles in real estate and stock market.
Which choice do you think the Fed , owned by bankers, is going to make?
You’re crazy ,if you pick anything other than B.
Just saying!
I think gold is about to head south in a big way. Look at Eldorado gold ( EGO )
Charster, you have been predicting a washout for as long as I remember $500-600 what you predict. It is always going to happen in next few days.
Your wrong. I have said bottom this fall for quite some time now. And yes, mid 5 to 600s.
That does not make me wrong though. I simply stated the fact you have been calling for the washout repeatedly. As for bottom this fall, I have no idea you said it or not. I did not mention it in my post either. Enjoy your trading
SPECIAL CIRCUMSTANCES:
Greece halts Eldorado Gold’s mine operations
Aug 19 2015, 09:08 ET | About: Eldorado Gold Corporation (EGO) | By: Stephen Alpher, SA News Editor Contact this editor with comments or a news tip
Apparently still not open for business, Greece has halted Eldorado Gold’s (NYSE:EGO) gold mine operations in northern Greece because the company has violated terms.The company’s investment in the Halkidiki region last year was a controversial one and seen as a test case for the country’s ability to attract foreign investment.”We are recalling the technical studies, which will result in the halting of operations at Skouries and part of operations in Olympiada. The company has violated some terms,” said Energy Minister Panos Skourletis after meeting Prime Minister Alexis
I have to disagree, Chartster.
But then, what the heck, I was wrong once before. (Maybe a bit more than once!)
Gary, silver supply is still rising due to all the mines brought on line during the past boom period. There is not a silver shortage as some in the metals community keep insisting. That is pure mythology to satisfy an agenda to convince the unwary to get involved and buy (thus supporting prices). Overall silver production grew 5% in 2014 over 2013 totals and the market was fully supplied. This years totals are still expected to exceed those of last year unless there are mine closures. In fact production has been rising as prices fell just so that companies could continue to meet gross revenue targets. This small irony seems to elude the metals investment community who still do not understand that production MUST rise or the miners will end up posting falling income performance numbers. Most are unwilling to do that and as a result the primary producers increase their ounces as they are trying to meet financial targets, not physical volumes. You can read the country by country results in the following link that are provided by GFMS Thompson Reuters.
Global Silver Production — The Silver Institute 2015
https://www.silverinstitute.org/site/supply-demand/silver-production/
Is it a bird or is it a plane? No, it is the Birdman!
I’m flattered.
We have the first touch @ 1130. It’s going to get interesting.
—SHAD—
Are you still using your 3-touch rule @ 1131?
I still have my last block of JNUG waiting to see if 1131 is broken, then holds as support for next leg.
Hey Brian. Well, we broke through $1131 in after hours trading up to $1133. That was the level I was looking at (the old Nov lows that were prior support and now resistance). If it had tested it 3 times and started to reverse down, I would have sold out. I was trapped out on locations for work and was using my smart phone all day, so when I saw it testing $1131 earlier and not make it through, I got concerned and took partial profits (60%) and left (40%) of my positions in place for a potential run higher.
Today’s price action could have been the top of wave iv inside of the larger Wave 3, and Gold will either pullback from here down down to $1033 in the wave v of the larger Wave 3, or keep climbing towards next resistance at $1155.. Tomorrow will tell the tale.
Here were my thoughts yesterday to Stewie as a recap:
________________________________________________________________
On August 18, 2015 at 10:20 am,
Shad says:
Well Stewie, today it sure looks like wave iv of 3 topped, and wave v of 3 down has started, but I’d want to see another down day tomorrow in metals to confirm this first. Gold could also reverse up tomorrow and make another run at $1131 (Nov 2014 low that was support and now first resistance), and that would mean we’re still in wave iv of 3.
On August 18, 2015 at 1:52 pm,
Shad says:
Yes, I know, and we have to finish this damned Wave 3 first 🙂
The debate is have we finished wave iv and we started wave v (inside of Wave 3), or are we still in wave iv with the potential to still tag $1131, before starting wave v?)
______________________________________________________________
not just eldorado being censored in Greece.. seems to be every company..going the way of their airports…its an asset
It’s hard to get much more precise than Avi recently if GLD 108.50 holds, since it’s daily high was 108.47. http://www.gold-eagle.com/article/gold-silver-are-you-feeling-bearish-yet
He is expecting a wave 5 down of wave 3 in GLD from here if it doesn’t go over 108.50. This would align with Doc Postma’s call of it not getting too much higher than 1130 and Rick Ackerman’s resistance at 1133.20 holding as well.
Agreed. I was looking at the prior Nov low support of $1131, which now had turned into overhead resistance as the potential top to wave iv, and the beginning of wave v in the larger Wave 3. We nailed that level this afternoon, and will either head down from here down to make new lows at around $1033, or if Gold has a little more oomph, it may go for next support at $1155.
“The sun will come out tomorrow…….bet your bottom dollar that’s tomorrow…..”
— Little orphan Annie.
It looks like the sun is coming out today as Gold has continued to head higher. Currently in pre-markets it is trading at $1142.60. Nice.
$1147.50. I took out a day trade on CDE Coeur this morning for the romp.
I am watching carefully wiseguy.1135 is a solid resistance.We see what happens from there onwards.
GLD just busted through to 108.58
wiseguy gld can go as high as 108.80.
Maybe you are right, but I’m out of the market and will wait and see the rest of this week. I think we could have another big up day tomorrow gapping hard above 108.80. It will be interesting to see how this plays out. I’ll be looking to get short around gold 1155 if it gets that high in this rally.
“While most eyes are fixed on COMEX or the London Bullion Market Association listed daily gold price fix, the real worth of gold as a currency reserve and a standard of monetary soundness is growing in worth by the day,” Engdahl concluded adding that this trend is a real pain in the neck of the US Treasury, Federal Reserve and Wall Street.
Read more: http://sputniknews.com/business/20150816/1025811280.html#ixzz3jI9yYAd0
thanks, Matt
Gentlemen – Perhaps using the mint shortage of blanks (rounds) may not indicate a “shortage”. Could it be possible that the mint is managed similar to a standard business inventory control system utilized universally; i.e., current year inventory is forecast from past years factored by estimated demand. So if it were my business, I would not have stocked for robust demand (given the past few years demand) and would therefore employ a more modest inventory, and simply reorder should demand rise. I submit that is what has occurred.
My real life experience tells me that a shortage of physical metal does not exist. Check any supplier and one will note ample supply exists, i.e., no delay in my recent orders of silver and gold eagles.