July 24, 2014

Widespread Silver Bar Shortages

As of today, there are no longer any regular wholesale supplies of the 1 ounce through 100 ounce silver rounds and bars available for immediate delivery.  It may be possible to locate incidental quantities of some product, but most wholesalers are now promising two to four weeks delivery to allow time for the silver to be fabricated.

As a result of the shortages, premiums have started to rise.  So far, the increases have been modest, on the order of 0.5-2%.  However, if the shortage grows, expect to see further and larger premium increases in the coming weeks.  We could see a repeat of the late 2008 gold and silver buying frenzy, where product availability got as slow as 1-4 months after payment.

At the COMEX close yesterday, registered (dealer) silver inventories fell below 50 million ounces.  Even if you include the eligible (investor) silver inventories in the COMEX bonded warehouses, which are not available to fulfill COMEX deliveries unless the investor specifically chooses to do so, there were barely 107 million ounces to fulfill around 725 million ounces of contractual obligations.  COMEX silver inventories are now down more than 10% from mid-June even while the amount of silver owed has soared!

As the price of silver almost continuously rose from $17.98 on August 23 to $29.36 mid-day on November 9 (a 63% increase), the COMEX had not changed its minimum requirements for leveraged accounts.  It would be a normal process to periodically bump us the minimum amounts for margin accounts as prices rise, but this was not done until November 9, when the margin requirement was increased from $5,000 per contract to $6,500.

On September 16, the COMEX further raised the silver contract margin requirement to $7,250—even though the price of silver had been dropping since November 9!  What is suspicious is that a lot of “insiders” were liquidating their silver positions starting the afternoon of November 15.  Is it possible that they may have received advance notice of the coming change in the minimum margin account requirement and sold in anticipation of lower prices the next day?

The next round of gold and silver options expiration occurs on Tuesday, November 23.  The attempt to suppress gold and silver prices upon the release of the US jobs and unemployment report on November 5 was almost a complete failure.  Unless something is done to knock down gold and silver prices before November 23, a lot of call options will be exercised, which would further increase the demand for physical precious metals.

I suspect, as do many others, that the two rounds of increasing gold and silver margin requirements were timed for no other reason other than to try to help hold down prices through November 23.

Don’t be surprised if supplies of other low premium physical silver products, especially US 90% Silver Coin, dry up, with those premiums also starting to rise.  If you are looking to acquire some physical silver, I suggest you act sooner rather than later.

Patrick HellerPatrick A. Heller owns Liberty Coin Service in Lansing, Michigan and writes “Liberty’s Outlook,” a monthly newsletter covering rare coins and precious metals. Past issues can be found online at http://www.libertycoinservice.com/ Pat Heller is also the gold market commentator for Numismatic News. Past columns online at http://numismaster.com/ under “News & Articles”. His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com.

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Comments

  1. Truthheap says:

    Get some silver while you can!

  2. TK says:

    I buy and sell alot of silver. I have no problem getting any in Chicago.

  3. Mike stevens says:

    The number 1 seller of gold and silver in the USA (based on $) apmex.com has tons of silver bars spot + $1.00 an oz. This article is total hype and bs from a fear monger, scumbag author.

  4. If you actually read the Apmex product pages, you would see that these products are all on delayed delivery, as the article is stating.

    1 oz bars
    “These items are on a slight delay. We expect to be able to ship these items by November 30th or sooner”

    100 oz bars

    “These items are on a slight delay. We expect to be able to ship these items by January 6th or sooner.”

    JM 100 oz bars

    “These items are on a slight delay. We expect to be able to ship these items by December 8th or sooner.”

    It varies by product, but you get the idea.

  5. Joe says:

    Great way to convert your paper while its still relatively worth something.

  6. Falesteeni says:

    “CRASH JP MORGAN BUY SILVER”

  7. Najam says:

    @ Falesteeni, note some important points. View the situation, this campaign is running successfully in the english-speaking areas, the non-english countries are thus placed at a disadvantage because stocks of the sought material are running out. Consider also,- the history of paper money,- who started it,- who are the early buyers silver/metals these days,- and the implications of these actions. Those who have sense and communicate, then take the necessary steps, exchange trash for valuable metals, stay in the lead and keep advantage and control. Those ill-informed will follow later, enter the market to buy when the price is high, and the commodity is scarce. The americans are quite smart, they do not mind if $’s value goes down, that means the value of it$ debts go down, they will still be holding precious metals/value. So those holding dollars outside of the U$ should beware of the coming slide, it might be speedy, the world should be ready for a rude shock. The $ may even be de-monetized, remember Nixon’s-(1971) refusal to honor promise to pay gold for dollars. History repeating – -.

  8. brian says:

    Mike Stevens.. you are wrong and owe an apology.. look at apmex again. THEY ARE DELAYED… DUHHHHH.

  9. Najam says:

    The attractive Dollar for tempting Francs “Oo la la”,
    Marks on a chit to lure a Pound is frankly a “Lira”
    –for the Bank.
    Seduction, blackmail, threat, used for debt-traPs,
    but em’Ploy’ment remains the surest bet for grabs
    –at the Bank.

  10. jamal qashou says:

    i think the ratio between gold and silver is unfair ratio its around 1 to 50 i mean by every 50kg of silver you can buy 1kg of gold this ratio in its way to get changed day by day we will see the ratio between gold and selver will become 1 to 40 within the next comming three months then we will watch and see next march 2011 according of the globale demand,so the investment in the silver will be much prfitable than gold but always rember go for physical trade.there is no time to wait the bank note will not servive for avery long time the comming years is silver and gold years.

  11. Don says:

    I purchased 107 wolves from Apmex, took 15 days after check cleared to receive them.

  12. Mike stevens says:

    Are you guys on crack, apmex.com has 1 oz, 10 oz, 100 oz, and 1000 oz bars for sale today. Not all types (ie brands) products are available now but at least one kind in each group (1,5,10,100, 1000) is available. Pllease say it’s a silver shortage if the most popular items are sold out but the rest are not. Apmex has over silver town 10 oz bars in stock ready to ship, the have 5 oz bars ready to ship, 100 and 1000 oz bars ready to ship. The author proclaimed all silver is sold out, a bold lie to get ratings. The fact that some of you would back the author and not even look at the whole page at apmex.com means you owe me an apology. Tulving.com has silver eagles for sale, free overnight shipping spot + 2.49.

    By the way I love silver and buy mine on craigslist for 90% of spot, put an add up on your local craigslist and you too can get a great deal.

  13. carl says:

    I am buying from private parties on the bullion direct neucleo exchange. No delivery issues because it is already owned by a peep just like me. Plus getting for ~.60 over spot as of late.

  14. harry davis jr says:

    I just order coins every month, wire xfer or cert. chk.; delivery is 7 business days,comes UPS, I sign for it ,look at it, admire it, thank God my country allows me to buy it, then dial up the combo to the safe and it’s in MY possesionso when the financial meltdown gets to rollin’ I can, at least buy some bread and peanut butter and pick off would-be thieves with my 12 Ga. Now that’s what us ignorant prolitarians call “Solvency.”
    “ARE YOU IN GOOD HANDS?”

  15. Pat Heller says:

    There seems to some confusion over what I said in my column, though I thought I stated it clearly. I said that the wholesalers are almost cleaned out of stock of silver ingots of 1 to 100 ounce size for immediate delivery. Of course, it is still possible to find some inventories in retailer stocks for immediate delivery. My column did not discuss retail inventories at all. My own company at the moment has more than 100,000 ounces of bullion-priced physical silver available for immediate delivery. However, once the 1 to 100 ounce ingots that we have in stock are gone, it will be 1-2 weeks at the earliest before we can receive additional supplies. Even though it might seem like my company has ample immediate inventory available, I’m not sure it will last until Thanksgiving. I hope this clarifies that point I was discussing in the column.

  16. icarus says:

    In a market economy shortages are always the result of price fixing. If you gave the mnoney, but there is not enough of the product it is because the price is too low. Ask any economist. Even the crooks at the fed who call themselves economists should admit this.

    The price of silver is being fixed.

  17. Silver 1993 says:

    Silver shrugged, JP blinked.
    Silver exports from China down 40% this year.
    In other words, China is hoarding their silver.
    COMEX silver inventories are now down more than 10% from mid-June.

  18. Doughboy says:

    I call BS on this article – I just checked with APMEX and Tulving and they BOTH have 10oz & 100 oz bars for immediate delivery.

  19. clown says:

    Believe it or not.
    Where will you be when the music stops? On a chair or not?

  20. clown says:

    I should have read this article this morning because I just threw away all my silver because someone else said silver was in a bubble and going to be worth less.
    darn darn darn….

  21. angmikey says:

    CRASH JP MORGAN BUY SILVER

  22. “Wholesale” IS NOT THE SAME AS “Retail”

    Anyone who fails to understand that is very silly.

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