An Inside
Look at the Rapidly Escalating Physical Silver Shortage Via
SDBullion
January 20, 2013 By 19 Comments
On Thursday, we alerted SD readers to the fact that the US Mint had sold out of Silver Eagles, selling over 6
million ounces over the first 9 days of sales in 2013, and was shutting down
sales and production of Silver Eagles through at least 1/28/13, and would ration
sales of eagles upon resumption of sales.
With a rapidly growing presence in the retail gold and silver
market via SDBullion, we have had a unique perspective of the
escalating physical silver shortage, and would like to give our readers an inside glimpse of
the time-line of events evidencing a growing shortage of physical silver.
Full time-line of
the developing silver shortage from a wholesale perspective is
below:
Silver Shortage Time-Line:
Mid December 2012: US Mint announces 3 week halt of Silver Eagle
production as the Mint transitions to 2013 Silver Eagles. Wholesale premiums and
retail pricing of Silver Eagles do not change.
Late December 2012: Wholesale premiums begin noticeably rising on
90% silver -pre-1965 coins.
Monday 1/7/13: US Mint begins sales of 2013 Silver
Eagles
Monday, 1/14/13: Wholesale suppliers run out of 90% face pre-1965
silver coins. Wholesale premiums rise 2-3 fold, and suppliers quote 3 week
delays.
Tuesday 1/15/13: SDBullion’s primary supplier informs us that
premiums on generic 1 oz rounds are doubling, effective immediately, with a 1-2
week delay on delivery. Delivery on previously placed orders are also delayed 1
week.
Wednesday 1/16/13: Rumors begin to circulate that premiums on
Silver Eagles and Silver Maples are set to jump .75/oz imminently. All major
suppliers deny the rumor, and state they expect premiums to remain stable for
the foreseeable future.
Thursday 1/17/13: 9am: SDBullion’s suppliers all confirm ASE’s are
in stock at standard premiums.
Thursday 1/17/13: 3pm: US Mint sends the following communication to
authorized purchasers:
Authorized
Purchasers,
The United States Mint has temporarily sold out of 2013
American Eagle Silver Bullion coins. As a result, sales are suspended until we
can build up an inventory of these coins. Sales will resume on or about the week
of January 28, 2013, via the allocation process.
Please feel free to call us if you have any
questions.
Regards,
Jack A. Szczerban
Branch Chief, Precious Metals Group
Department of the Treasury
United States Mint
Jack A. Szczerban
Branch Chief, Precious Metals Group
Department of the Treasury
United States Mint
Thursday 1/17/13: 3:30 pm: SDBullion’s primary ASE supplier raises
premiums by .75/oz.
Thursday 1/17/13: 5pm: SDBullion’s primary ASE supplier is sold out
of 2013 Silver Eagles
Thursday 1/17/13: 5:30pm: SilverDoctors.com advises readers that
the US Mint is sold out of 2013 Silver Eagles
Thursday 1/17/13: 6pm: SDBullion is forced to raise premiums on
2013 Silver Eagles as wholesale supply is rapidly vanishing, and premiums are
skyrocketing.
Thursday 1/17/13: 9pm: SDBullion.com sells out of all remaining 2013 Silver
Eagles
Friday 1/18/13: 9am: SDBullion is able to procure a small order of 2013
ASE’s from a secondary provider for .75 over normal wholesale premium.
Friday 1/18/13 3pm: Nearly all wholesale bullion dealers are sold
out of 2013 ASE’s, wholesale premiums have risen by nearly $1.50 for those
wholesalers with any remaining (and rapidly diminishing) inventory.
Friday 1/18/13: 4pm: SDBullion’s primary supplier refuses to honor
the new and increased pricing for 1 oz generic rounds agreed to 48 hours
prior
2013 Silver Eagle retail availability As of Sunday
1/20/2013:
Apmex: Sold out
Provident: Sold Out
Provident: Sold Out
Scottsdale: Sold Out
SDBullion: Under 500 oz remaining, with one last
inventory order en route.
With the US Mint not scheduled to begin resumption of ASE sales for
another 8 days, at which point it will begin sales with rationing/ allocation,
expect premiums on Silver Eagles to continue escalating, and expect supplies of
alternate forms of physical silver coins and rounds to begin drying up, as
investors turn to Silver Maples, Philharmonics, generic rounds, 10 oz and 100 oz
bars as alternatives to the skyrocketing premiums Silver Eagles are
commanding.
With shortages causing panic
buying among silver investors, much the way that the recent gun and ammo
shortages and threats of gun confiscation have caused massive demand and 2-3
fold increases in prices of guns and lead futures, a similar situation could
easily develop quickly in the silver market, particularly with the fact that
silver is a Giffen good, and is an extremely small
market.
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