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This is What’s Caused Silver & Gold Buyers to Hold their Fire

from The Wealth Watchman:

Since the rip-roaring good time that we stackers had in July, where silver soared from $17 to over $21, silver’s price has been taking a pause. It has(so far) been correcting through time: spending extra time around certain price points, and grinding sideways, to digest it’s very sizeable gains from the lows(in the $13’s) that we saw back in January.

During this pause however, something else has begun to be very clear: much of the big money has stepped away from the table, for now, and seems to be waiting before purchasing more silver and gold. Today I’ll be taking a key look at why that is, specifically in 2 areas, which should help shed some more light on why big-monied investors are putting on the brakes in silver purchases. Before I go into the reasons though, here’s the evidence that big money is adopting a “wait and see” approach to precious metals at the moment.

Sales Have Cratered

First let’s take a look at gold’s recent sales from the world’s largest mints.  Below you will see that gold coin sales literally face-planted in the past 3 months.  For instance, take the “Cadillac Coin” of the bullion world, the American Eagle. Sales of AGEs(American Gold Eagles) have declined sharply from this time last year.  Ouch.
Waiting 4

Switch gears to Perth Mint, which has seen sales of roughly 50,000 ounces of gold per month, recently drop from those levels by two-thirds(Two-thirds!) since spring-time.

Cliff dive!

Waiting 2

Remember: the Perth Mint is the major bullion dealer for eager Chinese bullion stackers, who want quality products, reasonably close to their sphere of influence.  When Perth sales go slack, it’s fairly likely that Chinese buying has also slowed.

“Well, Watchman, has mainland Chinese buying slowed at all then?”

Fantastic question, I’m glad you asked!

If you’ll take a look at the only bullion bourse left that actually matters in the physical realm(Shanghai) we can see that Chinese buying has also taken an enormous tumble in gold, in the last several weeks!

Waiting 5

 

117 tonnes bought in the month of July! While that would be mind-blowing total in any other country….that’s a drop of roughly 60% in tonnage that China bought, year over year, in July. That’s the second lowest monthly tally of gold buying in the last 30 months.

It’s not just gold though.  Take a look at silver for a moment:

Waiting 3

For the first time in roughly a calendar year, silver sales at the Perth Mint didn’t remotely reach near 1 million ounces in a month.  In fact, it fell nearly 50% in just one month.

US Mint silver sales have languished the same way.

So, now that we’ve demonstrated that bullion sales at major mints have languished, let’s take a look at why the big money is holding their fire for more purchases.

Price Spike

At the year’s beginning, bullion sales were flying high, because gold and silver’s price was quite low.  Gold double tapped the $1,050 area(where India first announced they’d bought 200 tonnes).

Silver also had reached $13.50 in early 2016, in the lowest print since 2008, and millions of ounces were being consumed in bullion demand at every major mint each month. Those prices triggered furious buying, which lasted up and until July(despite silver’s price climbing higher).

Then something happened which caught even most of the major market players off guard. The Brexit vote came on June 23rd…and with it, twin, mini-parabolas in precious metals began immediately.  The result was so instantaneous, that precious metals began spiking even before the vote confirmed that a Brexit had happened.

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14 comments to This is What’s Caused Silver & Gold Buyers to Hold their Fire

  • Craig Escaped Detroit

    A lot of guess-work, speculations and “shot in the dark” as to WHY purchases have slowed down.

    Perhaps the obvious reason is right? The prices jumped up recently, so perhaps the purchases slowed down and waiting for a bit of time, before the buying spree begins again.

    I know that MY money situation has been really tight and will continue to be tight for the next few months (ouch). I’m glad I bought silver when I was able to do so.

    Perhaps the Chinese & Indians, noticed that their HUGE purchases were driving up the costs?
    Slow it down, wait for the cartels to push it back down, and start the buying-hoarding process all over again.

    Stack em when you can.
    Get ready for your next garden, and plant some FRUIT & NUT trees when the time is right to plant them again.

    • petedivine

      I find my self in a similar situation. I’m a little tight on PM funds, so am focusing on sustainability. I just purchased a garden tower. I’m impressed. http://www.gardentowerproject.com/

      I just started my fall seedlings. Let’s see how this thing does. So far its very promising. I’m also going to plant a bunch of blue berry bushes and apple trees in a month or so.

      Lastly, I’m getting my stuff together to can soups and beans for the winter months.

      Good luck all.

      • Moishe

        @peterdivine,

        Excellent! I just cleared & prepped a 1/4 acre garden plot ready for fall planting & no grubby jew kosher tax on the fruits my labor! (they hate that) No one is or ever will be my master & neither should you!!

    • Ed_B

      @Craig

      Could not agree more on the fruit and nut trees. Now there is an investment that will pay good dividends for years to come! Our two cherry trees did not make it. They needed more time and attention than I had to give them. But the two golden delicious apples and the two Italian plums are doing great. No apples so far but we have about 2 dozen plums this year. Plum trees are hardy and do well in the NW US. Apples do too.

      Our garden is doing well with good crops of tomatoes, peppers, squash, and some very full and healthy looking potato plants. Won’t know what we’ll have for potatoes until we dig them up but they usually do pretty well here. These store well in our basement and can last for 6 months or more when wrapped in newspaper and stored in cardboard boxes. The acorn squash are the champs at lasting a long time, though. We’ve stored them for a year and they were still good to eat at that point. They turn completely orange from their dark green color but are still firm and delicious when baked with a little butter and brown sugar. My wife hates eating veggies but will eat these, so I can at least get some veggies into her diet.

      As to gold and silver buying, yes it is slower now but that is often the case when money is tight, people already have what they think they need, or they are spending their money on other things. Summer is in full swing now, so many are traveling and spending their disposable income on vacations. Others are saving their money because the fall election is coming and they feel more comfortable sitting on a good cash hoard rather than spending it. Others are waiting for a price pull-back before buying more gold or silver. It’s not a simple matter. There are lots of moving parts in all this.

  • fonestar

    When fonestar fought alongside Max Keiser’s Silver Liberation Army in 2009, we were told to never hold our fire. We were instructed to aim at center of mass and buy every single last gram in our h00d.

  • Craig Escaped Detroit

    I still like the Battle Cry from Max & Stacy=
    “Crash JPM, buy silver.”

  • F16hoser

    If everybody believes that Silver is going to 3-digits and I’m one of them. Why would anyone give a flying-FK about a $3 dollar swing in either direction??? So “Big Money” took a break. Who gives a sh!t. Plenty of other buyers out there from all over the world.

  • Troy

    I quit buying silver after it went over $15. Now my money is going into my 1968 Pontiac Lemans…which is darn near finished, and been buying lots of building supplies. Fixing up a building on my property. If silver ever goes back under $15, I may buy some more. Next car on my agenda is a 1968 GTO with a 4 speed.

    • Craig Escaped Detroit

      @Troy,
      I’d suggest to keep stacking silver, simply because of things like the lessons of Venezuela, right now, the purchasing power of a single ounce of silver, can buy up to 6 months of food (from farmers)… a story said an ounce is about equal to have $2000 American Dollars, and keeps going up.

      So here’s my point, when we are getting deeper into it, similar to Venezuela, how many ounces of silver would it take to buy your Muscle car dream machine? (Today’s price of such cars, often is between $30k-$50k), but when people need FOOD and things to survive, you should be able to buy the car of your dreams, perhaps for just 20 ounces of silver.

      Do the math. 20 ounces X $2000 of purchasing power = $40k of your selection of muscle cars.

      Or, if you buy your car NOW, and if you get squeezed and need to buy food or medical care, somebody else out there will give you 20 ounces of silver for it.

      I’ve always wanted to take $15k or $25k of cash to the “Woodward Dream Cruise” and buy some unfortunate guy’s “Divorce Car”. You know, the guy who spent 5 years of all his spare time working on his dream car (neglecting his wife), and the poor WIFE gets SO resentful of not having a decent husband, she divorces him because of it, and the poor guy has to sell the dream car (now with more than $35k into it), and is forced by his new circumstances to let it go for less than half of what he sunk into it.

      (Or the WIFE got the car and she dumps it just to SPITE her ex who neglected her too much so he could spend all his time and money on the thing he loved TOO much.)

      So, delay and put off your “muscle car gratification” for a year or three, and end up with a barn FULL of half a dozen of very cherry rides. 20 ounces right now, costs just $400. That may not even enough to buy a good manifold & injection or carb system.

      Difficult choices, eh?

      I got a bit of that “car fever” myself. Just a couple years ago I had to sell my ’48 Fat Fendered Ford (Low Rider) with a 1969-327 Chevy (steel crank & 4 bolt mains) & TH350 tranny, mid rise manifold, Edelbrock carb, etc. It was pretty sweet, but someday after silver goes wild, I’ll pick up something even better. The car was a decent DAILY drivable car getting 14MPG and sipping regular gas, and had QUIET MUFFLERS so it was not annoying, but it still had the powerful sound without the loud dB’s.

      I could actually enjoy listening to the radio at NORMAL levels.

      • Eric

        I would have to agree with you Craig. It’s what keeps me from buying my truck/van. If I buy it now, I know it’s just going to sit there on the street. It’d be nice to have but I don’t need it. I know I will need food and my wealth intact. I’d rather wait and see where we are after the election and possibly wait until November at this point as long as I can.

        I also think that if it gets real bad, I don’t want to have a truck I need to sell or can’t sell in order to get on a plane and leave the country.

        Each person needs to do what they need to do. But if you’re waiting for $15 silver, you probably won’t see it. And you might be buying it again at $250. Better to keep trying to acquire some on dips.

        I’m waiting to see if the $19.28 level gets tested again. Then $18.70. Sitting on a bit of powder right now and getting ready to pull the trigger.

  • mac

    …so the eastern peoples buy dips and westerners buy momentum…

    – the challenge now is whether the Western money that’s going into Gold is for the long term…?

    The eastern people, I think, will madly buy if they sense a runaway is likely.

  • Eric

    India’s wedding and festival season is October-December. But a lot will happen in the run up to the election here in the US. Don’t miss these moves.

    http://www.kitco.com/commentaries/2016-08-05/Miners-Could-Reach-First-Stage-Blow-Off-Targets-Soon.html

    Here are your stops…

    http://www.kitco.com/commentaries/2016-08-08/Where-are-the-Stops-Monday-August-8-Gold-and-Silver.html

    And here are your charts…

    http://www.kitco.com/commentaries/2016-08-08/Monday-s-Charts-for-Gold-Silver-and-Platinum-and-Palladium-August-8.html

    Be smart like the Indians and be a bargain hunter.

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