Silver Doctors Reports U.S. Mint Authorized Purchaser Has Told Them that the Mint Will Stop Making 2016 dated American Silver Eagles.
Lack of Demand Cited.
Silver Price Rising, Demand Falling?
According to a report on Silver Doctors, the U.S. Mint is halting production of American Silver Eagles, due to lack of demand. This runs counter to the stories we have heard that physical gold and silver demand was ‘skyrocketing’. One report even said we would run out of silver in 2016 – guaranteed!
We have been reporting on noticeable declines in global physical gold and silver demand for several months, and while we are surprised the US Mint is halting production this early in the year, we are not shocked given what we know.
The U. S. Mint, a branch of the U.S. Treasury, didn’t want the attention that would come from a silver shortage so they allowed authorized purchasers to buy a million silver eagles a week for six months. As a result, authorized purchasers and their dealers have plenty of silver eagles on hand. The Mint actually managed, not only to avoid a ‘positive’ silver story but now has a negative silver story:silver is plentiful, demand is gone, nothing to see here.
Investment Demand and “Trader Sentiment” Drive Gold and Silver Not Physical Demand
Sounds counterintuitive. Keep in mind gold and silver ‘sentiment’ on gold and silver was very low from 2014-2015 despite record Shanghai Gold Exchange withdrawals, massive Indian silver imports and record silver sales at the major mints. Physical demand was boosted by the low prices.
When the “big money” moves into gold and silver, it moves into paper gold and silver. Messrs. Soros, Drukenmiller, Paul Singer, Rothschild dont go down to the local coin shop or call online bullion dealers for a few eagles or maples, they buy comex futures contracts, gold and silver ETFS (record inflows) and gold and silver mining shares. This is how they are authorized by their investment mandates to invest. When prices rise, stackers stop buying physical gold and silver perhaps and instead are watching the ride higher or even buying some mining shares.
All during 2016 we have been reporting on the decline in physical demand (see below) and the increase in investment demand and have cited the latter as the reason for the swift rise in precious metals prices this year.
80% of Central Bank Gold Buying is from Russia and China
The PBOC has slowed its purchases this year.
Shanghai Gold Exchange withdrawals, often considered a proxy for physical gold demand In China, are down this year.
Number one importer of silver, number one or two consumer of gold.
INDIAN SILVER IMPORTS (no import duty restrictions) DOWN in 2016
INDIAN GOLD IMPORTS DOWN in 2016
U.S. MINT SALES (monthly archives)
PERTH MINT SALES (monthly archives)
CANADIAN MINT SALES
(quarterly and annual archives) (admitted over producing this year to avoid a shortage)