Chart usGOLD   Chart usSILVER  
 
Food for thought
The 9 scariest words of the english language : “I’m from the Government and I’m Here to Help.”
Ronald Reagan  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1287.010.21
Silver 19.450.00
Platinum 1419.500.75
Palladium 899.20-2.55
WORLD MARKETS
DOWJONES 1709815
NASDAQ 458023
NIKKEI 15425-35
ASX 56253
CAC 40 438115
DAX 94708
HUI 2463
XAU 1021
CURRENCIES (€)
AUS $ 1.4062
CAN $ 1.4278
US $ 1.3137
GBP (£) 0.7912
Sw Fr 1.2060
YEN 136.6700
CURRENCIES ($)
AUS $ 1.0710
CAN $ 1.0868
Euro 0.7612
GBP (£) 0.6024
Sw Fr 0.9177
YEN 104.0000
RATIOS & INDEXES
Gold / Silver66.17
Gold / Oil13.41
Dowjones / Gold13.29
COMMODITIES
Copper 3.150.01
WTI Oil 95.961.29
Nat. Gas 4.070.04
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
In the same category
David Ceresne: Watch out when physical market for gold and silver detaches from paper
Published : February 05th, 2013
473 words - Reading time : 1 - 1 minutes
( 7 votes, 4.9/5 ) Print article
 
    Comments    
Tweet

By David Ceresne
Saturday, February 2, 2013

Shortages and volatile markets are forcing the precious metal industry into turbulent times.

How is the precious metal industry adapting? Global mints and refiners have increased premiums on all products.

How are investors reacting? Buying is at an all-time high and premiums are no longer the primary concern. In fact, delivery time on products now is the most important factor for buyers. This shift demonstrates the demand for precious metals, whatever the premium may be.

It's simple. Relentless demand and shrinking supply are changing the precious metal landscape. We are witnessing a deviance from paper price to physical price. But why?

To understand the changing landscape, we need to analyze the precious metal supply chain. Looking to global mints can let us know what changes must be made.

 


To start, where are mints getting their metal? It boils down to three sources.

1) Mining companies. Above-ground and easily mineable metals are a thing of the past. Mining companies must dig deeper than ever to extract precious metals. Changing mining conditions and high input costs are affecting the precious metal supply. As mining conditions change and inflation continues to rise, the extraction of metal through mining appears to become less feasible. Political factors also play a role. Laws, politics, and tax rules can slow down or even stop the extraction of precious metals in key markets.

2) Recycled products. It is estimated that 85-95 per cent of world silver output is now disposed of, primarily through industrial applications. Middle-class people all over Europe are trading in their gold and silver for cash, disposing of everything from jewelry to silverware. In North America the story is the same. But much of that supply has already been depleted as people sell personal items to help pay the bills. This causes a big strain on the physical gold and silver markets. People are also liquidating their retirement accounts and selling assets to buy precious metals. Supply is depleting as demand increases.

3) Global trading floors. Mints and refiners will purchase silver and gold from global trading floors. If you have purchased precious metals before, many of your products may have been melted down from large bars into smaller-denominated coins and bars.

But the next time mints ask for metal to melt, will it be there? With current demand for metals, the answer is no. Then what? If there is no silver or gold to procure, we will head toward a "force majeure" (http://en.wikipedia.org/wiki/Force_majeure).

At this point the paper price will have no relevance to the physical price. As people rush for the door, dealers will undoubtedly sell. But at what price? This will be for the true markets to decide.

-----

David Ceresne is president of Precious Metal House (http://www.preciousmetalhouse.com/), a coin and bullion dealer in Toronto.

* * *


 

Data and Statistics for these countries : Hong Kong | Singapore | Switzerland | United Kingdom | All
Gold and Silver Prices for these countries : Hong Kong | Singapore | Switzerland | United Kingdom | All
Tweet
Rate :Average note :4.9 (7 votes)View Top rated
Previous article by
Chris Powell
All articles by
Chris Powell
Next article by
Chris Powell
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Chris Powell

Chris Powell is the secretary of the Gold Anti-Trust Action Committee (GATA) which has been organized to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities.
Chris Powell ArchiveWebsiteSubscribe to his services
Most recent articles by Chris Powell
8/31/2014
8/31/2014
8/31/2014
8/31/2014
8/31/2014
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer