What gold and silver investors want to know above all is when the bull market will resume. In a very real sense, it already has resumed. Futures market prices aside, evidence abounds that a raging bull market in physical precious metals is now underway.
In the third quarter (ending September 30th), coin demand went through the roof. Mints literally couldn't keep up with demand. The dysfunctional u.s. Mint rationed deliveries of Silver Eagles, failing to fulfill its mandate under law of keeping the market supplied. Even so, investors bought up a record 18.59 million ounces' worth of Silver Eagle coins in the past four months.
Steve St. Angelo of SRSRoccoReport.com compared the 2015 Silver Eagles shortage situation with the infamous 2008 incident. He found the current shortage occurred even as the U.S. Mint produced three times as many Eagles this time around!
Extraordinary conditions in the silver market are causing the mainstream media to sit up and take notice.
As Reuters reported, “The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand.”
Record Demand for Coins Sends Premiums Soaring
Record demand for silver coins has driven premiums on virtually all bullion products substantially higher. Some of the biggest premium spikes are being seen on pre-1965 90% silver coins. These premium increases represent real gains in value for holders of physical silver. During periods of elevated premiums, national dealers like us have paid and will pay prices up to several dollars above spot on buy-backs of most silver products from customers.
Market conditions will eventually normalize. But since this great public buying spree in physical silver was spurred by low spot prices, it may take significantly higher spot prices to lessen demand-driven shortages and backlogs. Buyers who wait for premiums to come down may, in turn, end up having to pay higher spot prices.
