Demand For Coins And Bars Exploding While Gold And Silver Prices Pushed Down

While the price of silver and gold have been breaking down, the demand for coins and bars is exploding, as evidenced by the following facts:

Bloomberg reports on October 31st “U.S. Mint Silver-Coin Sales Jump to 21-Month High“:

Sales of American Eagle silver coins by the U.S. Mint jumped 40 percent in October to the highest in 21 months, defying a slump in New York futures to the lowest in more than four years. Sales surged to 5.79 million ounces, the most since January 2013, the month that set an all-time high at 7.5 million. Today, sales jumped 33 percent in one of the busiest times this year, Tom Jurkowsky, a spokesman at the Washington-based mint, said in an interview. Last month’s total was 4.14 million.

Reuters reports today, November 5th “Silver lining in precious metals’ rout catches out coin mints“:

The U.S. Mint sold 1.4 million ounces of silver American Eagle coins on Friday alone, the highest daily sales since Jan. 13 when the new 2014-dated coins first became available. The Perth Mint, which runs the only gold refinery in No. 2 gold producer Australia, said it was not facing any supply issues as it usually launches a new line of products from September, unlike the other mints.

Reuters reports today, November 5th “U.S. Mint temporarily sold out of Silver Eagles amid huge demand“:

The U.S. Mint said on Wednesday it has temporarily sold out of its American Eagle silver bullion coins following “tremendous” demand in the past several weeks. In a statement sent to its biggest U.S. coin wholesalers, the U.S. Mint says it will continue to produce 2014-dated coins. The Mint will advise when additional inventory will become available for sale without providing further details.

In Germany, precious metal dealers have literally been run down in the last week, as evidenced by GoldReporter:

Christian Brenner, CEO of Philoro Edelmetalle GmbH in Leipzig and Berlin: “The run is tremendous, even today on a Saturday. Despite the high counter trade level in September, demand has increased by 100 percent, online-trade even soared by 300 percent.”

René Lehmann of Münzland in Dresden: “Run is not the right expression. We?ve seen up to 80% of our regular customers taking advantage of the slide to build up more positions. On those two days, on Thursday and Friday, we made approximately 50% of our monthly revenue. The ratio of buyers to sellers has generally been at 50 to 1.”

Robert Hartmann, CEO of Pro Aurum: “On Thursday demand had improved considerably. On Friday we had 250 percent more business (tickets) than on average in the weeks before. But it were rather gold bullion and coins that people focused on.”

Resource Investor reports on November 4th “Indian gold bullion imports hit 17-month high“:

As per trade figures released yesterday, the total gold imports during the month of October totaled 24.07 metric tons (MT). This is the third time since June 2013, when gold import restrictions were imposed, that the monthly gold imports have crossed double digits. The gold imports surged nearly 16% upon comparison with the total gold imports of 20.8 MT during the previous month. The imports during October last year had totaled just 0.127 MT.

Bullionstar on November 2nd: “Insatiable Chinese Gold Demand Continues Unabated.”

Based on these data, except for the Perth Mint in Australia, all other sources are reporting a huge increase in demand for coins and bars across the globe. Retail investors primarily are looking taking advantage of these bargain prices. The price setting in the COMEX futures market has its effect on real world demand. The question is, when will wholesale demand start piling up on precious metals to trigger a supply shortage? That would be fun to observe … but we are unfortunately not there yet … prices should go even lower to trigger such a situation.

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