Just saw this article, and thought it was a fitting followup to those here who posted in early 2013 how, "2013 is going to be the highest selling year in history" for Eagles. Well: http://blogs.barrons.com/focusonfun...s-wrapping-up-a-stingy-september/?mod=BOLBlog Back to back two of the lowest months in the last 6 years of eagle sales. Not trying to start anything. I just have a long memory, and its very easy to come onto a board and make a bold prediction. Very few times are there any followup of how those predictions pan out. So, YTD, silver is down 31%, gold down 22.7%, while all equity markets are up strongly. All of the while, no one is wanting to buy gold, as evidenced by mint sales. I think I have busted about every balloon floated so far this year by those who argue only PM is worthy of investment. PM is a great contra investment. However, this year its contra to good investment performance. In that regard, as protection and as pretty things to collect, its not a bad buy. I only post this in case others try to make other arguments. Make up your own mind, but this is how its panned out so far, versus very different prognostications.
Yeah, it is almost ironic that that folks really want it when the price is HIGH, but not so much when it comes down. It should be the reverse. Also a very interesting point, is whe you look at the demand for Silver, it really as been steady to SLIGHTLY up for 10 years and the biggest driver for the NEW demand is Coins. If it were not for coins, demand would have actually decreased. So if the market for Eagles and such continues to decline, not only will that put a bit of downward pressure on the metals, but there is a buttload of it out there that is essentially smelter ready that will be the first thing to go if unexpected expenses come up or the wife wants a new kitchen..... Mike
Having all your investments in one asset class is rarely a good idea, whether that asset class is PMs, stocks, bonds, etc. Any of those markets can experience periods of volatility and irrational pricing.
Are you sure they were referring to gold eagles? Silver eagles are on pace for an all time high and will get it barring a catastrophic falloff in production. The highest year was 2011 with a little over 40 million minted, this year there have already been over 36 million minted with 3 months to go. Every single month this year has had 3 million+ in sales.
My prediction was 42 million and change I believe, looks like I might be fairly close since Nov and Dec usually aren't big sales months.
You got it. The article was for gold eagles, but the discussions have been about silver eagles. Silver is selling on par with gold on a dollar per dollar basis which reflects the GSR from a sales volume perspective, but with available silver supply being far less than available gold supply the fact that silver is selling in vastly greater quantities makes these 2 scenarios incompatible for blanket comparison.
Fair enough. The article only talked about gold eagles. Let me ask this. Is there any shortage at all of ASE or any other pm coins? I thought the argument went that there will be massive shortages and force the price upwards for physical pm.
There was a shortage of silver eagles at the beginning of the year that sent premiums up to $5+ even if buying a monster box. No shortage any longer, premiums are back down to normal, 2.69 over on a monster box.
Yes, but it should be looked at a different way. In 2011, the average price of Silver was $35.00, so 40 mil of ASE's cost the buyers of retail silver 1.4 Billion Dollars. If we pick your estimate of 42 million total est mintage @ $25.00 average price you come up with 1.05 Billion Dollars in 2013 for a whopping 25% DECLINE in total dollars spent, which represents a significant downward interest in retail silver. Bottom line is people were less likley to exchange their fiat for retail silver.
Agree to a point, but you can also make the point that the bottom line is that 36 million ounces of silver are coming out of the market. There also may have been more eagles sold if the mint had been able to keep up with demand early on in the year when premiums surged to 5+. Smart investors stopped or decreased their eagle buying due to the high premiums and may have spent their money on generics ect. There could of been millions more in sales that didn't happen because of the mint not keeping up with demand.
Perhaps, but difficult to say what could have happened, but three points. The spike in premiums was driven by huge demand by anxious buyers, not by folks sitting back and waiting. The second point is any pent up demand should have been filled by now as premium were only high for a short time, and third is that does not explain 2012 at all. No matter which which way I spin it, it appears to be the demand for retail silver peaked in 2011 which aligns with the peak prices and is in decline. Can that change in 2014, sure, but as of now, I am not seeing it.
Yeah, at least temporarily. I simply view it as surplus inventory building up. However, to Mike's point a few days ago, even with this substantial amount of silver moving to coins nowadays, prices are not increasing. For all of the vaunted industrial demand, if it weren't for coin buyers there would be hundreds of millions of unwanted silver on the market every year. So, if not for pm investors, silver would have collapsed by now. Makes a guy nervous......
No, say someone was going to spend $10,000 on silver bullion in Jan of this year. Usually they buy eagles when they can be had for a $2-3 premium, but since the lowest price on them was $5 over spot, they bought generic bullion instead. So if many people did something similar, the mint could of easily of lost out on a few million silver eagle sales. We would have a much better idea what the silver demand is if all the numbers are published. Basing total investment demand of retail silver off of silver eagle totals is irresponsible. It might give you some idea, but hardly even that this year due to U.S. mint issues with meeting demand.
Not irresposible at all, it might not be 100% accurate, but you NEED a ruler. ASE's are not the whole story, but they are most likly the best measuring stick that is available to us.
Really? How is that a good measuring stick when in 2011 the US Mint had to start producing silver eagles in San Fransisco to meet demand, in 2012 they didn't have many delivery issues that I recall, but in 2013 they had issues meeting demand with both mints producing them. Sorry, but if they have 2 mints capable of producing them and still fall behind the demand curve, well, I guess you can decide for yourself that it means demand is falling off? I'll tell you that you're probably better off without a measuring stick than one that is inaccurate or unreliable. Basically, cutting something a 2nd time to find out it's still too short is a waste of time.
If you recall, there was little generics available also, so those folks were hit with the same problem, I stand by my belief that ASE's are a good yard stick.
I think you have to use mintages as a yardstick. Now, if people have mintages of other bullion, rounds, bars, etc those are fair to use as well. Just using "sales" is troublesome since if its old product then by definition someone was selling in order for someone to buy. I think we would be looking for new net buying as our metric. All in all, I always shake my head at this market. Of course, I do that for nearly every market. Humans are funny. We all like to chase returns, buy what is "hot". I feel that emotion too, but prefer to not give in and wait until nice quiet times like now to make decisions. Emotions and investing rarely go well together.
Theres a lot of what if's and speculation, but the bottom line nobody can argue with is the spot price, which says it all. Silver demand is on the decline while supply is on the rise. That takes no crystal ball to observe.
