Gold & Silver – Market Overview April 23d

Gold has bounced off its low near $1350 per ounce. Silver is still struggling to find a bottom. Although I doubt it, both paper gold and paper silver could go to lower prices in the paper markets.

But as I see it, the important news is that demand for physical gold and silver is huge – worldwide. We hear of shortages around the world – in India, China, Japan, Canada, the United States, and other countries.

My favorite supplier is quoting availability of silver eagles on April 30 (maybe) at a premium of approximately 30%, normally under 10%.

The US Mint just announced that their 1/10-ounce gold coin sales have been suspended due to excessive demand. Most suppliers are out of most silver items, all silver eagles, most bars, and most gold items. Physical demand is strong.

And for the first time in a very long time, perhaps the first time ever, there is a possibility of a COMEX default. Many respected writers and insiders are discussing the possibility. A Dutch bank has defaulted on its gold holdings for clients – and paid them in cash. Other stories are circulating about similar situations in Switzerland and in London.

Times are changing. Default is in the wind. It could happen. If so, expect the premiums on physical gold and silver to increase much further. There is no fever like gold fever. Think about it.

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