Tracking the shortages of physical Gold and Silver

Jim H
By Jim H on Sat, Apr 6, 2013 - 4:13pm

I believe that the precious metals price suppression efforts of the bankers are getting closer to the point of unsustainability... in other words, something is going to break.  The most likely sign of this breakage will be physical shortages, increases in premiums when PM's are for sale, etc.  The purpose of this thread is to highlight examples of shortages in order to document the tipping point in real time.

Let's see where we are at;

*  Japan is about to seal their own inflationary death warrant with their new hyper QE

*  Nobody in the weaker European nations can feel very good about the safety of the money they hold in banks

*  The US shows no sign of being capable of fiscal sanity... and all of the numbers are turning the wrong way.. which means that there will be no end to QE.

Should PM's be priced at a two year low right now?  Does that make sense to anybody who is aware of the above?  What's truly amazing to realize is that the tiny proportion of awake folks with some wealth to protect are enough to clean out the store shelves even now.  The true scarcity of physical precious metals will soon become apparent.  I will post examples to this thread as I see them in real time.    

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9 Comments

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2387
Tracking shortages of physical Gold and Silver

In another thread, I referenced this anecdotal observation by a PM investor in Bangkok, Thailand;

http://silverdoctors.com/gold-run-there-is-not-one-single-ounce-of-gold-...

I live in Thailand and am 100% invested in PM.
Today when I walked by a Gold-shop here in Bangkok, there was a long queue outside.
Since I’m curious and also have seen how the cartel has smashed down the Gold the last 2 days I walked in and asked whats happening…
and not 1 ounce is possible to buy. (they only have some jewellery for sell)
To buy Bullion you must order and wait (at least) 5 days.. and you can only order 2.5 ounce per person.
And they stopped taking orders at 3pm today as well.

Another surprise is that Tulving, a CA-based dealer who only deals in bulk (i.e. one monster box min. for Silver Eagles) is out of monster boxes. 

http://www.tulving.com/

He does have Canadian Wildlife series Antelopes available in monster box quantities for $2.69 over.. a pretty coin and a good deal to boot. 

Finally for today, this poster from TFmetals has been doing a pretty of documenting the growing scarcity and increasing premiums for "junk" Silver;

  http://www.tfmetalsreport.com/comment/292164#comment-292164

Although Eagles and 90% junk are in short supply, Gold and Silver are still widely available in the US.  I don't know when the store shelves will become empty, but I believe we will get there soon.  The current best buy that I am aware of is the Austrian Philharmonics from Gainesville coins, available in roll (20) quantities for only $2.25 over spot each;

    http://www.gainesvillecoins.com/products/163138/2013-1-oz-austrian-philh...

KennethPollinger's picture
KennethPollinger
Status: Platinum Member (Offline)
Joined: Sep 22 2010
Posts: 654
Many thanks again Jim H

You seem to be on top of much of this stuff.   I wonder how your past portfolio of junior

mining stocks have done?  Care to share anything about this?  Thanks,  Ken P

Jim H's picture
Jim H
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Posts: 2387
Silver Eagles in short supply

SilverDoctors are reporting tonight that Eagles are once again on allocation from the mint to the large dealers.  Premiums are also rising... Eagles were just $2.79 over spot each in roll quantities a few days ago at Gainesville... they are now $3.25 each in roll quantities;

http://www.gainesvillecoins.com/products/162783/2013-1-oz-american-silve...

Note that you can still get Austrian philharmonics at Gainesville for $2.25 each over spot, in roll quantities.. so there are still deals to be had out there.   

Here is SilverDoctors report;

http://silverdoctors.com/us-mint-sells-nearly-1-million-silver-eagles-mo...

The US Mint has updated April sales statistics for the first time since last week, and to no surprise, the Mint again reported more massive sales, with another 833,000 silver eagles reported sold Monday!   The April total through 6 business days is now 1.645 million ounces, bringing the 2013 total to a massive 15.868 million ounces.
In response to the continued massive demand for silver eagles, the mint also has begun rationing sales of silver eagles to primary dealers resulting in supply delays!
Just as was seen in January, tight physical supplies have seen premiums on ASE’s skyrocketing over the weekend and throughout the day, as ASE’s are rapidly becoming as scarce as 90%!

 

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
Canadien Maples

Are $2.20 over spot at Coloradogold.com

Unfortunately, you have to buy 200oz minimum.  That's gone up over the past couple months as the minimum used to be 100oz.

But back in 2008/9, the minimums at CG varied from 500oz to 1000oz, so the current minimum is below when the crisis began.  Then again, back then you could get 500oz for $4-8k!  Now 500oz would cost you  $14k.

 

Nate's picture
Nate
Status: Platinum Member (Offline)
Joined: May 6 2009
Posts: 594
more anecdotal evidence

Last month I asked my PM dealer (Central California) about the availability of junk silver.  Historically he has a revolving $2000 face value (1400+ ounces) inventory - buys roughly equal sales.  His total inventory of junk silver on the day I visited was $9 face value.  He indicated deep-pocketed farmers were coming in and cleaning him out.  His junk silver prices have historically tracked Colorado Gold very closely, but now he is charging a premium.

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Comex inventories are very low.

Here is an article that discusses how low the current Comex inventory is.

http://bullmarketthinking.com/comex-gold-inventories-collapse-by-largest-amount-on-record/

 

I think people must be taking delivery of their gold before it gets "Corzined"

Jim H's picture
Jim H
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Posts: 2387
Great article KenC

You couple the Comex inventory action with the GLD drawdowns that have happened in the last month or so and you really have to question who is taking all of this Gold out of the system and why.. and I think many of us here know the why (the inevitable musical chairs of fractionally reserved Gold has begun);

From April 2:      http://www.tfmetalsreport.com/blog/4613/extra-f-final?page=13

First, the draining of the GLD resumed in earnest yesterday. After sitting tight for seven, consecutive days, the total gold in "inventory" dropped by another 4.11 metric tonnes. For those keeping score at home:

  • 132.87 metric tonnes year-to-date or 9.84% removed. That's just short of 4.3MM ounces.
  • According to the World Gold Council, 133 mts is slightly less than the entire holdings of Thailand and slightly more than Singapore. Holding 133 mts would put you at #25 on the global list.
  • 4.3MM ounces is the equivalent of 43,000 Comex contracts.
  • 4.3MM ounces is 10,750 London Good Delivery bars. "That's a lot." Seriously...think about that for a moment. Ten freaking thousand gold bars! Oh my goodness!!
  • 4.11 mts yesterday is 132,139 troy ounces or 330 London Good Delivery bars.

So now think about this. What if this isn't just "investor rotation"? What if those 10,750 gold bars haven't simply been returned to Authorized Participant vaults? What if I'm right and the lion's share of those bars are leaving due to liquidation and conversion? If so....from where will the gold materialize to restock the GLD "inventory" when price inevitably reverses?

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2387
Interesting ZH comment, re: Gold Arbitrage East vs. West

http://www.zerohedge.com/news/2013-04-09/charles-gave-france-brink-secon...

Tyler and Zhers:

Please see that Gold today was trading at $1,575 Oz and the gold in Shanghai was trading at $1,606 .. It was free $33 free arbitrage ... in Shanghai they only take Physical delivery of gold, not like the LBMA and COMEX ... see today gold is at 1,586 .. the Arbitrage is closing ..

What this means, is that the BRICS are head strong to destroy the Paper pushers in NY and London .. this was excellent observation by Jim Willie CB

The Shanghai Metals Exchange sports a significant useful practical Gold price spread, higher than the posted London and New York price. It has opened the door for arbitrage for the last two months or more. My firm suspicion is that the BRICS Development Fund will convert USTreasury Bonds by means of the Shanghai window, thus draining the London centers of their gold bullion. As of 8am today in London, the Shanghai Gold price had a 1591 handle, compared to a 1555 handle in London. That constitutes a $36/oz spread, very feasible for arb trades and the associated drainage of London metal. The professionals are having a field day, exploiting the artificially offered Gold price achieved from yet more naked gold futures contract shorting. The depletion of the SPDR Gold Trust (GLD shares) continues at a frenetic pace. The big US banks are shorting the GLD shares, removing its gold bar inventory overnight, and selling into the market. Or else they are covering their similar sales obligations in like manner. The key to the divergence is that as the phony paper Gold price declines more and more, it signals the demise of the COMEX itself, a shutdown. The event cannot happen without the price divergence, the fast falling paper Gold price versus the stable rising physical Gold price. When the COMEX goes dark, from depleted inventory, from vacated client players, the Gold price will actually not be known for some time. Then later, it will be on display from various key centers across the globe, including Shanghai where naked futures contract activity is not sponsored by the state.

 

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2387
Another increase; Eagles now $3.49 over spot, roll quantities

Another price increase since yesterday, up from $3.25 ---> $3.49 each over spot, in roll quantities, using Gainesville coins as a reference;

http://www.gainesvillecoins.com/products/162783/2013-1-oz-american-silve...  

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