Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

[FondoFinder]

About 4,588,000 coins have been sold so far in 2011 (Jan 18). Compare that to last year and it shows individuals are buying the dip.

On an annual basis that would amount to about 1/10 of the 30,000 ton global silver supply expected to be available this year.

I have said that I think its not in US citizens best interest to crash JP Morgan. Sure, hurt JPM big time perhaps, but don't kill it.

But why wouldn't countries/citizens that see the U.S. as their enemy use it as a weapon? It could (have) be(en) the achilles heel of the US economy, that they could attack from the comfort of home. That's why I thought Max Keiser was targeting the wrong audience.

[Kadriana]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

I really don't understand silver's moves anymore. Is Industrial use down dramatically to make up for silver sales? Are people scrapping a lot more or miner's production increased a ton?

[FondoFinder]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

Kadriana, its industrial use is not down dramatically (slightly less than 50% of yearly silver supply consumed), and people are not scrapping a lot because it is largely used in trace amounts in electical components that are thrown away (i.e. .35 gram per cell phone). Miner's production is increasing somewhat (I am not sure by what percent on a global yearly scale, but I think it is very likely close to 4% this year).

Near the bottom of Jon Nadler's comments today he (being bearish on precious metal prices recently) cites a recent Silver ETF fund withdrawal of 4.5 Million ounces and HSBC reducing their gold holdings by 50% to chase equities (HSBC and JPM are the two banks commonly refuted to make dealings on behalf of China). What he skirts around is that there is a lot of speculation about China whacking the price of precious metals down, only to buy more, at lower prices, and take physical delivery from closer places like Australia. That's all speculation of course, but clearly China is continually increasing its precious metals base, reducing exports, accumulating silver, and is promoting sales of precious metals to its citizens (I cannot verify how much though).

Gold and silver equities are not getting proportionately hammered as they normally would (in multiples of the % decline of the underlying commodity) today, so I think a significant amount of those withdrawals is going in to mining equities, which have been hammered down 20-30% recently. I have seen individuals claiming to do this recently as well (i.e. sell SLV, buy SLW). A higher leverage trade.

There is also a lot of press going around about being sure you only hold physical metal as well. Not ETFs. Many individuals are likely converting ETFs to physical. So one can't trust an ETF withdrawal amount as being taked completely out of silver (or gold). As the two bears (somehow related to zerohedge) explained last week, sheeple should focus on the metal market, LBMA, and comex physical demand and supply, as they sense a physical shortage in silver that could cause a short squeeze.

[FondoFinder]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

Record-Setting American Eagle Silver-Coin Sales Could Be Greater If Not For Rationing

Many eyes on the March comex delivery numbers due to this

[thriftyandboringinohio]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

I've been watching Comex warehouse levels occasionally for a couple years.
The stories that they'll be unable to deliver seem so plausible, but it never happens.

[FRED]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

I've been watching Comex warehouse levels occasionally for a couple years.
The stories that they'll be unable to deliver seem so plausible, but it never happens.

Plausible, but not credible, which is why we never repeat the "Comex can't deliver" stories here.

[Kadriana]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

Record-Setting American Eagle Silver-Coin Sales Could Be Greater If Not For Rationing

Many eyes on the March comex delivery numbers due to this

Don't silver eagles have to be made from silver that is mined in the US? I'm wonder if there is a max of silver eagles the US can make because we can only mine so much.

[lektrode]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

Plausible, but not credible, which is why we never repeat the "Comex can't deliver" stories here.

whats even more interesting is that with the BULLHORN SCREAMING BUY SILVER, their price has dropped nicely (for me, since i only have 100 of em):
http://www.gainesvillecoins.com/cate...er+Eagles.aspx showing 30.89 today(fri 21jan) from 31.73 last fri, and down very nicely from 34.21 on 30dec

but my CDE is getting KILLED (tho i'm still up)

but i guess the question becomes: is this gonna be one of those 'tsunami' moments, like when the sea goes rushing out, just before the monster comes roaring in?

or will 'the cartel' be pulling out all the stops to krank up the dollar?
(asks the student....)

[FondoFinder]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

I found this excellent article on the sources and uses of Silver, gleaned from 2009 data. Surprisingly, scrap silver was estimated at a whopping 8,500 tons (32% of total supply) in 2009, possibly due to the financial crisis.

Near the bottom he postulated (on Nov 22 2010) that silver could drop to the $19-22 level on profit taking. He also notes that silver is more risky than gold, and values over $25 could introduce more scrap, tempering further price gains.

A great starting point I think, but there is no mention of the large naked short positions, physical shortages for the March deliveries, the strong public demand for physical silver, or accumulation by China and India in 2010 and beyond however.

[Kadriana]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

I found this excellent article on the sources and uses of Silver, gleaned from 2009 data. Surprisingly, scrap silver was estimated at a whopping 8,500 tons (32% of total supply) in 2009, possibly due to the financial crisis.

Near the bottom he postulated (on Nov 22 2010) that silver could drop to the $19-22 level on profit taking. He also notes that silver is more risky than gold, and values over $25 could introduce more scrap, tempering further price gains.

A great starting point I think, but there is no mention of the large naked short positions, physical shortages for the March deliveries, the strong public demand for physical silver, or accumulation by China and India in 2010 and beyond however.

I'm curious to see what 2010 numbers look like and if scrapping increased dramatically or not. I know my mother-in-law was thinking about selling her wedding silverware because she doesn't have enough pieces. I know I have a sterling silverware set around that I'll probably hold on to but I'm sure plenty of people are selling them. Now you have a bunch of places buying silver which makes scrapping even easier.

I'm bullish of silver long term and only being 33, I can wait the supply/demand issue out. I think China will be interesting to watch where it is the third largest producer of silver.

[FondoFinder]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

Apparently no longer so. According to this Wikipedia page,

"Program extension, 2002
The authorizing legislation for the American Silver Eagle bullion program stipulated that the silver used to mint the coins be acquired from the Defense National Stockpile with the intent to deplete the stockpile's silver holdings slowly over several years. By 2002, it became apparent that the stockpile would be depleted and that further legislation would be required for the program to continue. On June 6, 2002, Senator Harry Reid (D-Nevada) introduced bill S. 2594, "Support of American Eagle Silver Bullion Program Act," "to authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted." The bill was passed by the Senate on June 21 and by the House on June 27 and signed into law (Pub.L. 107-201, 116 Stat. 736) by President Bush on July 23, 2002.^[19]"

So it does not appear limited to the amount mined in the US. I don't see a published limit, so its more likely limited by the amount available for delivery at the COMEX. For example:

- One Comex silver "contract" is for 5,000 ounces, so January's silver eagle consumption would require 1,800 contracts to be delivered, assuming 9 million coins minted, and the mint gets delivery from Comex.
- Currently there are 358,610,000 ounces open for March that may or may not be requested for delivery (obviously only a small portion will be, since this is half the total global mine production of silver for the entire year). Delivery occurs only 5 times a year.
- Comex currently has 104.415 million ounces (Jan 20th). January's silver eagles would take up almost 10% of that. Not that silver eagles are sufficient in quantity to cause a problem, but sales show people in general are buying physical silver. Lease rates staying high may support that.



- There is speculation that when comex cannot fulfill their delivery commitments, they pay cash with a nice premium instead. So the theory suggests traders will load up contracts for delivery in March just to pocket that cash premium. $2Billion would "bust" them.

This isn't a new issue, but this time may be different since the word is out and physical silver is in such short supply.

[Kadriana]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

Thank you for the information. Very interesting. I wonder if sales are going to stay high or slow down. March will be interesting to watch and see how much was hype and how much of shortage really exists.

[cpnscarlet]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

I know I have a sterling silverware set around that I'll probably hold on to but I'm sure plenty of people are selling them. Now you have a bunch of places buying silver which makes scrapping even easier.

I just made a junk silver purchase of about $2K and when it arrived, it was ALL dimes!Not a single quarter or half. That tells me that scrapping is getting to the bottom.

[FondoFinder]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

The total for January was 6,422,000. 50% higher than ever recorded monthly sales. But its a new year for collectors, and also a 9-14% price dip. Temper that count in the months ahead (novelty wears off, collectors have 'em already, and the Crash JPM cult members are tapped out) and I suspect the coins will use up maybe 6/100 of total yearly global silver production.

Just enough to take out some slack in the global supply, but especially so in the US. Harvey Organ's blog cites "If sales continue at this clip then the total no of silver eagles sold in a year would equate to 76.8 million oz. The usa only produces around 40 million oz, so for the first time they will need to import over 37 million oz of silver."

If only Canada and Mexico halted silver exports. Fat chance. They like their fiat siegniorage too much (for now).

Lease rates have been high for nearly two weeks now. Lots of "tight supply" propoganda out there, but a curious lack of imminent Comex silver default talk as the March open interest has been declining.

[lektrode]

Re: Sales of 1-Ounce American Silver Coins Soar, U.S. Mint Says.

...."If sales continue at this clip then the total no of silver eagles sold in a year would equate to 76.8 million oz. The usa only produces around 40 million oz, so for the first time they will need to import over 37 million oz of silver."

If only Canada and Mexico halted silver exports. Fat chance. They like their fiat siegniorage too much (for now).

Lease rates have been high for nearly two weeks now. Lots of "tight supply" propoganda out there, but a curious lack of imminent Comex silver default talk as the March open interest has been declining.

maybe fondo you could expand a bit on the significance of silver lease rates?
if lease rates are going up, does this mean 'they' think prices will drop, so are shorting the market, as per the way traders in stocks do? (forgive my asking seemingly dumb questions) or is it a factor of lack of supply so producers 'borrow' it to keep the supply chain for fabricators/mints stocked???

and if silver is primarily a byproduct of copper mining (as i've heard it explained) does the price of copper krankin up signify that the supplies of silver will also (eventually) go up?

this: http://www.kitco.com/reports/KitcoNe...4AS_focus.html

There’s an old adage in commodities that nothing cures high prices faster than high prices. This refers to expected efforts by producers--whether corn growers, oil producers or copper miners – to increase output when prices rise, as well as consumers cutting back on buying.
But in the case of copper, analysts cite a number of obstacles for companies wanting to hike output. Charl Malan, metals and mining analyst with Van Eck Global, said normal supply growth tends to be 3% to 5% annually, and he expects no more than this for the next few years despite rising global demand.
“I can’t see all of a sudden a massive jump in supply,” he said....."

and, considering EJ's outlook - what happens if china's demand drops/krashes?

and, conversely - what happens when QE2 ends? (as its rumored)

or is the coming 'squeeze' rumored to be occurring in march, the most significant factor tween now and year end? (or is this just a short term trade to get-in/out of)

the trading aspects are most important factors for me, as i dont really have 'long term' money to be pouring into anything - but - short term, its downright scary trying to keep up/ahead of what the bernank is doing (as it took me too phreakin long to get to my present cash position) and tho i'm not the gambler type, 'hoping' that 'the plan' from the whitehouse/congress/bernanke/geithner is looking like the ultimate sucker bet