Silver bullion demand remains very robust as silver stackers continue to stack. 2014 has been another record-breaking year at the U.S. Mint which has sold 43.3 million silver eagle coins – up from 42.7 million coins last year.
Record demand in 2014 was seen despite the U.S. Mint running out of Silver Eagles early last month due to very high demand throughout October. As a consequence of this lack of supply, November sales of the coins were down 40.8% according to Reuters.
Silver prices fell 36% last year and, despite obvious shortages in the supply of physical silver, they have declined a further 12.5% this year. This demonstrates the degree to which naked shorting of the market - the selling of paper contracts for gold which the seller is not actually in possession of - is determining price of the physical metal.
Silver in USD - 5 Years (Thomson Reuters)
Why is it that demand is so high for an investment whose price is falling? For one, silver is a poor man’s gold. Working people with little disposable cash who are nervous about the condition of the global economy can hedge against instability, systemic risk and currency debasement by acquiring a small allocation of silver.
One ounce of silver is currently valued at $16.87. Whereas smaller gold bullion coins such as sovereigns are currently valued at around $283. This makes silver a more attractive and realistic option for a section of people in the western world who have seen their standards of living decimated in recent years.
Clearly, record demand for silver eagles shows a high level of anxiety and indeed fear regarding their financial well-being and that of their families.
Guide to Silver Eagles here
MARKET UPDATE
Today’s AM fix was USD 1,210.75, EUR 974.53 and GBP 772.41 per ounce.
Friday’s AM fix was USD 1,223.50, EUR 984.31 and GBP 779.15 per ounce.
Spot gold fell $3.00 or 0.25% to $1,222.10 per ounce Friday and silver slipped $0.04 or 0.24% to $17.01 per ounce. Gold climbed and silver soared last week - up 2.6% and 4.4% respectively.
Silver in USD - 1 Year (Thomson Reuters)
Gold fell 0.8% today on further speculation the U.S. Federal Reserve is moving closer to raising U.S. interest rates despite a mixed economic outlook. The Fed’s meeting starts tomorrow and is from December 16-17th.
Silver for immediate delivery declined 1% to $16.8605 an ounce in London, after rising in the past two weeks. Platinum slipped 0.8% to $1,220.44 an ounce. Palladium retreated 0.4% to $812.25 an ounce.
Gold futures and options for net long positions rose for a fourth week in the period to December 9, the longest stretch of increases since July, data showed.
Gold’s 2.5% gains last week were the most in two months and came as the dollar declined and global stocks tumbled amid a drop in energy prices.
Holdings in gold-backed exchange-traded products fell 1.5 metric tons to 1,611.3 tons as of Dec. 12, data from Bloomberg shows. They reached the lowest since 2009 on December 8th.
Asian shares were lower except for shares in China which bucked the trend. The Stoxx Europe 600 Index gained 0.5% this morning, for its first gain in six days. It slumped 5.8% last week on concerns about economic growth.
Greece’s ASE Index (ASE) climbed 2% and a rally in energy shares sent European stocks higher after their biggest weekly slump in three years. Standard & Poor’s 500 Index index futures climbed 0.8% before data that may highlight U.S. industrial production rose in November. The benchmark S&P lost 3.5% last week for biggest slump since May 2012.
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