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Silver analysis in March 2020: does the metal stand a chance to fully recover its losses? Capital.com
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Investors who had never thought of buying precious metals are pouring into the metals, depleting inventories. Compounding the problem, the US Mint and the Royal Canadian Mint are closed, and they have not indicated when they will reopen.
Remember, we are dealing with governments here, and they don’t have to operate at a profit. Consequently, shipment dates of new orders for Gold Eagles, the most popular gold bullion coins, cannot be known. Same for the Canadian Maple Leafs, the most popular pure gold bullion coins.
As for silver, problems are similar. However, there are numerous private mints that produce silver products, such as 100-oz. and 10-oz. bars and 1-oz. silver rounds. This makes silver products only slightly more readily available.
Silver Eagles and Silver Maple Leafs (US Mint and RCM products, respectively), are pretty much not available.
On our Specials Pages we offer for sale and immediate shipment gold and silver items, some of which are not well known but some are. Still, we verify the purity of on all incoming items, and we assure you that you are getting good quality metals.
See our Gold Specials Pages and Silver Special Pages for current items available.
On our Product Prices Pages, we now indicate the delivery times for which we will take orders. See Gold Bullion Prices and Silver Bullion Prices.
As always, orders must be placed via a phone call. As this time, because of the coronavirus, we ask even those clients who live in Phoenix to call. 800-528-1380.
A huge spike in demand for physical precious metals has decimated available dealer inventories. The vast majority of gold and silver coins, rounds, and bars are either out of stock or come with extended shipping delays.
Premiums are spiking higher. Dealers have raised bid premiums – the amount offered above the spot metal price – dramatically along with ask premiums.
The market is still searching for equilibrium and bids dealers pay may need to go even higher to entice enough sellers to meet demand.
Demand continues to far outstrip available supply of minted items.
The problem is being compounded as mints and refiners close in response to the COVID-19 virus. The Royal Canadian Mint announced it will be closed effective March 20th for at least two weeks. Some speculate that the US Mint facility in West Point, NY may also suspend operations.
The outlook for supply is exceedingly difficult. Pandemic fears first drove unprecedented demand for physical bullion products. Now it may force the relative handful of major producers to suspend operations.
US Mint officials already suspended new orders for gold and silver American Eagle coins. They could also have to suspend all work to clear the backlog. Private mints and refiners are wrestling with the same challenges.
The supply problem, in our view, figures to get worse before it gets better. That means premiums are likely to go even higher from here.
Unfortunately, it may be quite some time before premiums fall. As described, the short term outlook for fabricators is bleak. And order volume at Money Metals remains 4 times higher than the levels of just three weeks ago. We are working overtime to secure enough inventory and ship orders, and we continue to raise our bid prices.
We understand the frustration from investors over current premiums. They want to take advantage of silver spot prices near $13/oz and then find the price of virtually any silver product is much closer to $19 or $20/oz, if not higher.
This is simply the result of essentially zero sellers and demand that’s off the charts.
We are listening, and we have just introduced one very good option for gold and silver buyers. It is called Vault Silver and Vault Gold. Buyers can get ounces of .999+ pure silver or pure gold securely stored in their name and at super low premiums.
Premiums for silver start at just $1/oz and gold starts at just $5/tenth oz ($50/oz). (For now, we have an order minimum size of 200 silver ounces or two gold ounces.) And we will buy back your ounces any time – currently we pay the spot price.
Physical gold and silver investors can finally capitalize on today’s low futures market prices and also get access to the lowest bid/ask spreads around!
Ounces purchased will be placed in our Class III vault in Massachusetts without the big delays or the costs and uncertainties associated with shipping right now. Fees for secure storage of your metal are less than ½ percent per year.
The bottleneck in supply is currently limited to smaller fabricated products – coins, rounds and silver bars of 100 ozs or less. Thousand-ounce silver bars and larger gold bars are currently available without huge premiums. It is allocated portions of those large commercial bars that will be held by Vault Gold and Vault Silver clients.
We will not be surprised if inventories of even the largest bars eventually dry up as well, so we encourage folks to move quickly – and save a ton by avoiding the higher premiums.
All online orders at MoneyMetals.com are currently limited to $35,000, but you can call 1-800-800-1865 to place larger orders for selected items, including Vault Metals. For more information about these low-cost products, or to order online, please visit our new Vault Gold and Vault Silver pages.
