When it comes to buyers of physical assets as opposed to traders of paper representations of such assets, there is one key difference: the latter, more than anything, enjoy looking at “heatmaps”, chasing trends and jumping on momentum, the result being the most recent massive selloff in such “paper” representations of precious metals as the GLD and SLV ETFs, and various gold futures.

On the other hand, those who prefer to hold the metal in their hands, as well as others such as China whose ravenous appetite for gold over the past 4 years has been extensively covered here in the past, take every advantage of selloffs, and – inconceivably – demonstrate how Econ 101, namely supply and demand, really works, leading to ever greater demand the lower the price. Demand so high, in fact, that the underlying commodity that is being sold through paper conduits, sells out.

This is precisely what happened at the U.S. Mint, which just sold out of all silver American Eagle silver bullion coins, following “tremendous” demand in the past several weeks, according to Reuters reports.

This should hardly come as a surprise: over the weekend we reported that “Silver Coin Sales At US Mint Soar To Highest In Two Years.”

Sales surged to 5.79 million ounces, the most since January 2013, the month that set an all-time high at 7.5 million, Bloomberg reports. “Today, sales jumped 33 percent in one of the busiest times this year”, Tom Jurkowsky, a spokesman at the Washington-based mint, said in an interview. Last month’s total was 4.14 million.

“We saw demand surge over the past two days,” Michael Kramer, the president of New York-based MTB Inc., a dealer authorized to purchase coins directly from the mint, said in a telephone interview. “Business was almost triple than what it has been over the past few months.”

Logically, as a result of the surge in physical demand, silver futures for December delivery dropped 1.9 percent to close at $16.106 an ounce on the Comex in New York. Earlier, the price touched $15.635, the lowest for a most-active contract since Feb. 25, 2010.

Because when it comes to precious metals, thanks to the BIS and the central banks, Paper beats Rock every time.

 

Mint Silver Sales_0

Which brings us to today, when according to an alert issued to dealers across the US, some 2 million ounces of silver sold out just after noon, Eastern time, following the sale of over 1 million ounces in just the first two days of the month.

In a statement sent to its biggest U.S. coin wholesalers, the U.S. Mint says it will continue to produce 2014-dated coins. The Mint will advise when additional inventory will become available for sale without providing further details.

The announcement has not been made available to the public, but a U.S. Mint spokesman confirmed that it has sent the statement to its authorized participants.

A sharp break in gold prices to their lowest in more than four years last week has unleashed a surge in demand for silver and gold coins in North America and Europe.

As A-Mark, one of the largest bullion distributors in the country added, “The US Mint has just announced that they are temporarily sold out of American Eagle Silver Bullion Coins.  They are in the process of producing more and will advise when additional inventory is available.  If you previously received fixed premium pricing from us, it is no longer valid.”

So… even lower prices coming, right?

And since everything else in the New Normal is now flipped on its head, it only makes sense that the continued price collapse for precious metals is, as it turns out, driven by ever greater demand!


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