03-22-2020, 05:32 AM
Investors are selling off their precious metal contracts to pay margin calls on their leveraged equities. The same thing happened in 2008. Meanwhile, the same investors are buying physical precious metals as an inflation hedge. So there is a unique and temporary situation of falling prices and no inventory. It's because the paper contracts FAR exceeds the actual supply of the physical metal because it's rehypothecated over and over again. If history is any guide, we'll have true price discovery soon and the price of gold will rise to levels perhaps we have never seen before, and silver will follow.
Both the US and Canadian mints are sold out of silver so there is no place for the dealers to get any except from the open market.
Gold is unique in that almost all the gold ever mined, dating back to antiquity still exists. Almost 98% of the mined gold still exists and is accounted for. Silver on the other hand is an industrial commodity that is consumed as quickly as it is mined and nearly 100% of the mined silver is gone. The only way to add silver to the market is to mine it. Gold gets mined too but mostly it just gets moved around.
Both the US and Canadian mints are sold out of silver so there is no place for the dealers to get any except from the open market.
Gold is unique in that almost all the gold ever mined, dating back to antiquity still exists. Almost 98% of the mined gold still exists and is accounted for. Silver on the other hand is an industrial commodity that is consumed as quickly as it is mined and nearly 100% of the mined silver is gone. The only way to add silver to the market is to mine it. Gold gets mined too but mostly it just gets moved around.