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.
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.
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!
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:
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.
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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