Save your cookie preferences

We use cookies to remember your site preferences, record your referrer and improve the performance of our site. For more information, see our cookie policy.

Please select an option below and 'Save' your preferences.

Save

You can update your cookie preferences at any time from the 'Cookies' link in the footer.

We use cookies (including third-party cookies such as Google) to remember your site preferences and to help us understand how visitors use our sites so we can improve them. To learn more, please see our privacy policy and our cookie policy.

To agree to our use of cookies, click 'Accept' or choose 'Options' to set your preferences by cookie type.

Options Accept

  • English
  • Deutsch
  • Español
  • Français
  • Italiano
  • Polski
  • 日本語
  • 简体中文
  • 繁體中文
  • Daily audit
  • Help
  • Contact
  • Deposit
  • Login
  • Open account
  • ABOUT US
    • About BullionVault
    • In the press
    • Reviews
    BUY/SELL BULLION
    • Live order board
    • Daily Price
    • Regular Investing
    INVESTMENT GUIDE
    • Guide to gold
    • -How to buy gold
    • -Gold investment
    • -Gold investment plan
    • -Investment insurance
    • -Compare asset performance
    • Guide to silver
    • -How to buy silver
    • Guide to platinum
    • -How to buy platinum
    GOLD NEWS
    • Gold news front page
    • -Gold price news
    • -Opinion & analysis
    • -Market fundamentals
    • -Gold/Silver Investor Index
    • -Infographics
    CHARTS
    • Gold price
    • Silver price
    • Platinum price
    • Price alerts
  • Login
  • Open account
  • BUY/SELL BULLION
  • Live order board
  • Daily Price
  • Regular Investing
  • INVESTMENT GUIDE
  • Guide to gold
    • ⤷
    • How to buy gold
    • Gold investment
    • Gold investment plan
    • Investment insurance
    • Compare asset performance
  • Guide to silver
    • ⤷
    • How to buy silver
  • Guide to platinum
    • ⤷
    • How to buy platinum
  • GOLD NEWS
  • Gold news front page
    • ⤷
    • Gold price news
    • Opinion & analysis
    • Market fundamentals
    • Gold/Silver Investor Index
    • Infographics
  • CHARTS
  • Gold price
  • Silver price
  • Platinum price
  • Price alerts
  • ABOUT US
  • About BullionVault
  • In the press
  • Reviews
  • Help
  • Contact
  • Daily audit
    • English
    • Deutsch
    • Español
    • Français
    • Italiano
    • Polski
    • 日本語
    • 简体中文
    • 繁體中文

Gold News

Live support

NEED HELP? ASK US NOW

Search form

Gold News front page

Gold Price News

Gold Prices Slip as Western Funds 'Chase It Higher', Indian Jewelry Stores 'Pin-Drop Quiet'

More...

Gold Investing In Depth

Learn about gold bullion bars

Learn about gold bullion coins (and costs)

Gold investment: Why & how?

Gold Investment Analysis

  • Latest Gold Investor Index
  • Diversification: Gold as investment insurance
  • 40-year Asset Performance Comparison Table

Gold Articles

Opinion & Analysis

Gold Price News

Investment News

Gold in History

Gold Books

Gold Investor Index

Gold Infographics

Archive

  • February 2019 (27)
  • January 2019 (33)
  • December 2018 (28)
  • November 2018 (39)
  • October 2018 (38)
More...

List of authors

Silver Investing is Soaring

Monday, 4/12/2010 11:01

Almost all US silver output is going to US Silver Investing. Yikes...!

The US MINT just reported another record, but this time it wasn't for gold, writes Jeff Clark, senior editor of Casey's Gold & Resource Report.

The Mint sold more Silver Eagles in March and in the first quarter of this year than ever before. A total of 9,023,500 American Silver Eagles were purchased in Q110, the highest amount since the coin debuted in 1986.

While this is certainly bullish, there's something potentially more potent developing in the background for US Silver Investing. Namely, how this matches up with US silver production.

Like gold, the US Mint only manufactures Eagles from domestic production. And US mine production for silver is about 40 million ounces. In other words, we just reached the point where virtually all US silver production is going toward the manufacturing of Silver Eagles.

Yikes!

This is especially explosive when you consider that roughly 40% of all silver is used for industrial applications, 30% for jewelry, 20% for photography and other uses, and only 5% or so for investing through coins and medals.

To be sure, mine production is not the only source of silver. In 2009, approximately 52.9 million ounces were recovered from various sources of scrap. Further, the US imported a net of about 112.5 million ounces last year. (Dependence on foreign oil? How about dependence on foreign silver!) So it's not like there's a worry there won't be enough silver to produce the Eagle you want next month.

Still, why so much Silver Investing? The silver price ended the quarter up 15.5% from its February 4 low – but it was basically flat for the quarter, up a measly 1.9%. We tend to see buyers clamoring for product when the price takes off, so the jump in demand wasn't due to screaming headlines about soaring prices.

I have a theory.

For some time, silver has been known as the "poor man's gold". Meaning, Silver Investing demand tends to increase when gold gets too "expensive." And the Gold Price has stubbornly stayed above $1000 for over six months now and spent much of that time above $1100.

So you'd be lucky to pay less than $1200 right now for a one-ounce Gold Coin (after premiums), an amount most workers can't pluck out of their back pocket. But Joe Sixpack just might grab a "twelve-pack" of silver.

What would perhaps lend evidence to my theory is if gold sales were down in the face of these higher Silver Investing sales.

The US Mint reported a decline in Gold Bullion sales of 20.8% this past quarter vs. the same quarter in 2009. Further, other world mints have seen sharp declines in gold bullion coin sales as well: the Austrian Mint reported an 80% drop in sales for the first two months of the year and the Royal British Mint a 50% decline in Gold Coin production for the first quarter.

What's even more dramatic is the difference in the Dollar value of the sales. Gold Eagle sales in the US dropped $10.3 million from a year earlier – but silver sales increased by $61.8m. So, not only did silver sales make up the drop in gold sales, they exceeded them by $51.6m.

Is the rush into "poor man's gold" underway?

Why the answer to that question is significant is that a shift toward Silver Investing for this reason could signal we're inching closer to the greater masses getting involved in the precious metals arena. And that – for those of us who've been invested for awhile now – would be music to the ears. Because when they start getting involved, the mania will be underway, and from that point forward, it's game on.

I'm not saying the mania is starting, and I actually think we could see another sell-off before things take off for good. Gold could dip to $1000 and maybe even $950, with silver going to the $14-$15 range. But as clues like these begin to build up, we'll know we're getting closer. And any drop to those ranges would clearly be a major buying opportunity.

Looking to start Silver Investing today? Start with a free ounce of silver at Silver.BullionVault.com...

  • Reddit logo
  • Facebook logo
  • Twitter logo
  • Google logo
  • Yahoo logo
  • LinkedIn logo
  • Digg logo
  • StumbleUpon logo
  • Technorati logo
  • del.icio.us logo

JEFF CLARK is editor and lead writer of BIG GOLD, the monthly gold-investment newsletter from Doug Casey's Casey Research. Having worked on his family's gold claims in California and Arizona, and analyzing the big trends in gold's bull market, Jeff and his team aim to highlight safe and profitable ways for the prudent investor to capitalize on today's long-term rise.

See full archive of Jeff Clark.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News, RSS links are shown there.

Follow Us

Facebook Youtube Twitter LinkedIn

 

Mobile apps

 - live trading 24/7

 - buy & sell instantly

 - up-to-the-second charts

 

 

 

Daily news email
Go to 'communications settings' 

Get the latest daily gold price news free by email

Latest gold news by email

 

 

 

Gold Investor Index
5 February 2019

Gold Investor Index

Gold up, investing up!

 

 

 

CNBC TV-18
3 January 2019

CNBC TV-18

Gold jumps into New Year

 

 

 

Portfolio Adviser
19 October 2018

Vaulted large bar gold. Source: BullionVault

Beyond gold 'chatter'

 

 

 

Money Observer
6 August 2018

Bitcoin ain't gold

No, Bitcoin isn't "new" gold

 

 

 

  •  Email us

Market Fundamentals

  • Gold 'Set to Drive' Silver Price Gains in 2019
  • LBMA Gold Price Forecasts See Tight Range in 2019
  • Gold Mining M&A Now 'Easier' Than New Exploration
More...
  • Cost calculator
  • Cookies
  • Terms & conditions

©BullionVault Ltd 2005-

  • Twitter
  • Facebook
  • Google Plus
  • LinkedIn
  • YouTube