Supply Starting To Dry Up

[beauanderos]

http://numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=26340

"Since the last time I reported the occurrence of slower deliveries of some bullion-priced gold and silver coins and ingots, supplies have gotten even tighter. As a result, even more premiums are inching upward.

On Monday morning, here is what one major wholesaler was reporting for delayed availability: In gold coins and bars: Half-ounce and tenth-ounce American Eagles, 1-ounce Buffaloes, Canadian Maple Leaves, South African 1 ounce Krugerrands, kilogram-sized gold bars, British sovereigns, Swiss and French 20 francs, Austrian 100 coronas, Mexican 50 pesos and Australian Kangaroos.

In silver coins and bars: U.S. silver American Eagles of all dates, Canadian silver Maple Leaves, 1 ounce Engelhard rounds and rectangles, 10-ounce Engelhard or Johnson Matthey bars, 100- ounce bars of any manufacturer and U.S. 90 percent silver coins."

[theo]

I tend to view these articles with some skepticism as they seem to appear every couple months. The shortage is justified by either limited or anecdotal evidence. Why is his research merely limited to "one major wholesaler?" That being said; my small LCS has not had a lot of 90% over the past few weeks.

[barrytrot]

Yep, the "drying up" line is used at least once every 3 months and yet I can still make an order for 500 ounces of silver or gold in 5 minutes. Go figure. Of course, they may not deliver the gold since I wouldn't actually pay

[beauanderos]

Yep, the "drying up" line is used at least once every 3 months and yet I can still make an order for 500 ounces of silver or gold in 5 minutes. Go figure. Of course, they may not deliver the gold since I wouldn't actually pay

Barry, you're talking about bar and rounds .999 silver... I'm talking about 90%. Try ordering $1000 face bags of 90% junk and you won't find any wholesaler with, at most, two or three of them. I'm gonna go out on a limb here and make my own prediction... that whenever silver finally does climb above $100 an ounce, it will be on the back of .999 forms of silver... as you won't be able to pry 90% loose from whatever few strong hands remain holding it.

.999 will always be around, but 90% is going to disappear. Common junk silver will be a thing of the past by the end of this decade.

[68Camaro]

Makes sense as there was only enough 90% 50 years ago to give every citizen a few ounces each.
Now our population has doubled, the thin coin (and much else) has already been melted, and the bulk of the rest is in increasingly stronger hands. It will get hard to find, while the bullion will at least continue to be generated.

[Hawkeye]

Interesting reasoning. I hadn't thought about the availability of 90% vs 999 before. I've always assumed (wrongly, I see) that 999 would be "more desireable" and thus more scarce. But I supposed they're not making 90% junk silver any more, so the supply would continue to slowly diminish and consolidate into stronger hands, while 999 will always be produced for the new buyer. I guess I need to start concentrating more on junk silver while the opportunity remains.

[creshka46]

That is a good point about the 90%. I just checked Tulving and it looks like they don't even have 90% listed now.... Have they stopped selling it?!

[barrytrot]

Apmex appears to have some.

[93_Confirmed]

I've heard these same reports in other coin forums and I'm starting to believe the hype. Might pick up a big chunk this week at my LCS just in case the supply really is drying up.

[Engineer]

Apmex appears to have some.

Goldmart too.

[theo]

Yep, the "drying up" line is used at least once every 3 months and yet I can still make an order for 500 ounces of silver or gold in 5 minutes. Go figure. Of course, they may not deliver the gold since I wouldn't actually pay

Barry, you're talking about bar and rounds .999 silver... I'm talking about 90%. Try ordering $1000 face bags of 90% junk and you won't find any wholesaler with, at most, two or three of them. I'm gonna go out on a limb here and make my own prediction... that whenever silver finally does climb above $100 an ounce, it will be on the back of .999 forms of silver... as you won't be able to pry 90% loose from whatever few strong hands remain holding it.

.999 will always be around, but 90% is going to disappear. Common junk silver will be a thing of the past by the end of this decade.

Whether or not a true shortage of 90% silver is upon us, Beauanderos makes an interesting point. While .999 silver is subject to availability of above ground supplies; 90% coinage (and by extention 80% Canadian) is no longer being produced and therefore have a finite and slowly decreasing supply. Actually, I'd be willing to bet that some silver from the 80s melt ended up supplying Ag for subsequent mintings of .999 coins, perhaps even some of the early ASEs and Maples.

[Rodebaugh]

Premiums on 90% are up. wholesale channels are grabbing what they can and paying above spot to get it.

this is not speculation.....Pure clean observation.

[BlackOut]

this is the reason that I have held onto every 90%er I have pulled from circulation. I would not be surprised if those that sent theirs into the refiner will not have at least some regret down the road.

[Engineer]

Premiums on 90% are up. wholesale channels are grabbing what they can and paying above spot to get it.

this is not speculation.....Pure clean observation.

The question in my mind is how much this has to do with the supply of eagles drying up at the end of the year. Buyers of government coins may simply be turning to 90% until the SAEs start shipping again.

Then again, it may be indicative of increased demand by joe public...or strong hands speculating on a $30 floor with a run-up in the spring.

Has there been a run on common Morgans along with the rest of the 90%?

[barrytrot]

It's also probably due in part to silver being down near and under $30 lately. When that happens it seems the premiums on 90% go up and when it is $35 and above they go down.

I wouldn't read anything into it until it really is impossible to find 90% at all the major retailers. In tracking silver on and off for a long while that hasn't happened one time despite these "supply drying up" happening probably 20 times

[beauanderos]

It's also probably due in part to silver being down near and under $30 lately. When that happens it seems the premiums on 90% go up and when it is $35 and above they go down.

There's a lot of correlation that is likely accurate, to what Barry is suggesting. At depressed prices, savvier investors are increasing the pace of their long-term stacking of junk silver, leading to shortages. As well, more sellers are reluctant to accept these prices, with the exception of those clueless beneficiaries of inherited silver that sporadically appear on ebay like mushrooms, albeit this current crop being one seemingly afflicted by drought. As prices rise, it tempts more sellers, some induced by need, others by avarice, to try and call the direction with market timing, planning on selling higher and buying lower. As $35 nears, the flood of sellers will return, offering renewed supply and lessening the need for online dealers to offer a bit of a premium on 90%. What few sellers recognize is that the cyclic pattern of silver's rises and falls is unnatural, and driven in large part by bullion banks pushing the price to their advantage, such that they benefit with paper profits on downdrafts... and the ability to turn those profits into further physical accumulation themselves on repeated cratering of prices. We're witnessing, firsthand... on a small scale for most of us, the strong hand effect... that being the result of stronger hands, whether they be bullion banks, investors, or long-term stackers, siphoning away available supply from weaker hands... those focused on fiat profit, or needing a shot of cash unrelated to greed. What few realize is that their opportunity to reposition themselves advantageously back into 90% silver on subsequent dips incrementally diminishes each time the cycle repeats. At some time in the coming months, whether this be an ultimate inflexion point or not, this truism will become evident to more and more sellers... and they will begin to price their coins according to demand, understanding that they may be pressed to source fresh inventory to replenish their stock. 90% IS leaving the market, permanently, as Gresham's Law induces some to part with their poorer grade coins, some ultimately destined for a smelter's refining. It is a gradual process, difficult to determine its pace... but one sure to accelerate with time and price rise.

[Double3]

Yep, the "drying up" line is used at least once every 3 months and yet I can still make an order for 500 ounces of silver or gold in 5 minutes. Go figure. Of course, they may not deliver the gold since I wouldn't actually pay

I'll split the 500oz of gold with ya.

[CtrlAltBernanke]

Last week I went to probably the most well known coin in my city to buy a AR-15 and I overheard one of the guys say to a customer that they are out of junk silver and it was because their supplier in California can't source any right now. I immedietly chuckled and thought about Ray. They said that they have been trying to get some in for three weeks now. They were running low on gold too. only about a dozen pieces ranging from 1 oz Maples to fractional rounds. Just out of curiosity I happened to ask him how much they were charging for ASE's and the guy said $6 over spot. I tend to believe that the 90% is drying up not because of any articles but from what I hear on the front lines from coin dealers. I also fully believe that half of the 90% have been sent to refineries over the last 50 years which makes it even more scarce.

[wagsthadog]

Hi all-

Another thing- when I read about how refiners were backed up with truckloads of 90% and it sold at a discount when selling time came. Some people prefer .999 to mitigate the possibility of that.

I have to point out- that was 35 years ago! I sincerely doubt that the same truckloads of 90% will be there if we have a huge run up in prices. Even if hoarders start to sell their collections of 90%, it's not likely that they have a fraction of what was melted back in the day.

JMO wags

[neilgin1]

Interesting reasoning. I hadn't thought about the availability of 90% vs 999 before. I've always assumed (wrongly, I see) that 999 would be "more desireable" and thus more scarce. But I supposed they're not making 90% junk silver any more, so the supply would continue to slowly diminish and consolidate into stronger hands, while 999 will always be produced for the new buyer. I guess I need to start concentrating more on junk silver while the opportunity remains.

i have to be really honest here, as many of you know, i've been one of the chief cheerleaders on stacking 90's and stacking them hard. AND as many of you know, i am always going for rolls of GEM/BU's....never bags...always rolls, and ray picked up on what i was doing, meaning i was straddling two markets, intrinsic value and nusimatic value.

here's the part where i HAVE to be honest...seeing as a lot of you men, have a LOT more experience than me, at times...secretly inside, i would wonder if my course of action was WISE, because, as any floor trader, i operate from gut instinct....and i would have doubts.

i no longer do. That said, believe me, i'm ALL OVER stacking ASES as well, and i thought it prudent to MEGA stack circulated 40% Kennedys, because these are usually undervalued, and would serve well in trading.

But i have to thank you all, cause thru your counsel and just listening, you all made me better, made me sharper, made me REALLY think hard to what i was doing! God bless RealCent and the knowledge base here!!!! respectfully, neil

[Rodebaugh]

Premiums on 90% are up. wholesale channels are grabbing what they can and paying above spot to get it.

this is not speculation.....Pure clean observation.

The question in my mind is how much this has to do with the supply of eagles drying up at the end of the year. Buyers of government coins may simply be turning to 90% until the SAEs start shipping again.

Then again, it may be indicative of increased demand by joe public...or strong hands speculating on a $30 floor with a run-up in the spring.

Has there been a run on common Morgans along with the rest of the 90%?

Silver D's started pulling more premium a month or two ago. Just ask some of the regular RC morgan/peace buyers about availability and premium.

I'm buying from Joe Public at 25-26......and still not getting much. Then what I do get purchased is getting swallowed next day in the 28-29 range. They never have a chace to make it to RC's BST.

[neilgin1]

Rodee, in my haste, there is ONE silver "coin" (ignot) i'm missing.....yours.

i never buy ignots, but what you did with your ignots was pure art.

[Rodebaugh]

Rodee, in my haste, there is ONE silver "coin" (ignot) i'm missing.....yours.

i never buy ignots, but what you did with your ignots was pure art.

Thanks Neil

[Engineer]

Rodee, in my haste, there is ONE silver "coin" (ignot) i'm missing.....yours.

i never buy ignots, but what you did with your ignots was pure art.

I have some Rodebars that I'll grudgingly trade for that roll of halves you picked up over the holidays.

[Engineer]

Silver D's started pulling more premium a month or two ago. Just ask some of the regular RC morgan/peace buyers about availability and premium.

I'm buying from Joe Public at 25-26......and still not getting much. Then what I do get purchased is getting swallowed next day in the 28-29 range. They never have a chace to make it to RC's BST.

Thanks for the information, Doc. I just tossed out an offer for some common morgans/peace on CL.