We knew it would be a record… But the question remained: by how much?
The US Mint sold 6,422,000 Silver Eagles in January 2011 – half as many as were sold in the previous record-setting month of November 2010.
There are a few nattering nabobs who say the figures are skewed because the Mint credited some December sales to January. So what? If you add up December and January sales and average them, you still get the second-highest monthly total ever…right behind November 2010.
Fact is demand is intense.
After just one week, Canada’s biggest bullion bank sold out its limited stock of 100-ounce silver bars. Now ScotiaMocatta has no silver bars to sell in any size. One ounce, 5 ounces, 100 ounces and the kilobars – all gone.
For its part, the spot price of silver remains in “consolidation mode” – down this morning to $28.35. Gold is fetching $1,337 this morning.
For the second time this year, we’re hearing reports of high premiums for gold bars in Hong Kong – the highest since 1994, by one account.
Dealers attribute it to the advent of Lunar New Year in China and wedding season in India. “There’s a lot of interest from India,” a Singapore-based dealer tells Reuters, “but it’s just that we can’t meet their demand. Everybody is snatching the available stocks.”
That’s what Vancouver favorite Frank Holmes calls “the love trade” in gold – the traditional affinity for gold in emerging-market cultures. Then there’s the “fear trade.”
“The fear trade drivers,” says Frank, “are negative real interest rates and deficit spending to support social welfare programs. The Federal Reserve reaffirmed last week that real interest rates will remain negative for the long haul.”
Meanwhile, Frank reminds us that at $14.13 trillion dollars, we’re getting perilously close to the congressionally mandated national debt ceiling of $14.29 trillion.
“Since the mid-1980s, the US has raised its debt ceiling hand in hand with the country’s economic growth, even faster, in some cases.”
Bottom line: “The only thing keeping gold prices from skyrocketing has been money supply, which has been slow to rise. The correction in gold appears to be over for the reasons cited above. We’re near the 200-day moving average, which is a key psychological support level.”
Addison Wigginfor The Daily Reckoning
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
paper = consolidation.
physical = out the door.
what’s a high premium on a gold bar in HongKong?
i just called one of the local coin shops and asked my standard Q:
“Hi. Could you pls. tell me what you are buying and selling 1/10 oz. gold $5 Eagles for, today?
“Sure. We’re buying @ $125. We’re selling @ $168.”
now, THAT’s a premium!
i don’t usually deal there, but they are the big boyz around here, w/ centerfold spreads in the coin mags, most of which stuff is NOT bullion.
so, i tried to call the guy with whom i most frequently bang heads to put deals together, locally, usually for others, b/c i am always broke, but willing to help others.
i got his ans. machine.
i’m pretty sure he’s out riding his bike.
he’s no fool!
now, then: although the bounce off the 120 dma is highly probable here, many. who are NOT traders, will hafta wait longer, perhaps.
why? b/c the gold/silver ratio is now @ 47.1, way down from 70+ a year or two ago. maybe it will reverse, but, until it does, the trend is your friend.
well, you sure nailed it!
and…ahem…, the g/s :: is down a little, too!
Given a choice, Bernanke will likely strangle the currency (your money)... in favor of “strengthening” the economy.
Eventually, economic reality and markets will collide -- unfortunately, the higher the market, the harder the fall.
How certain business practices wind up jacking up costs before sticking you with the bill.
The Japanese Nikkei fell flat on its face overnight.
While Bernanke Runs Wild, Let’s Talk Ponies