All of the talk in the gold and silver markets continues to be around Basel III. Where there’s the possibility that the banks are forced to reign in their unallocated paper gold and silver contracts.
Gold is now making a serious run at the $1900 benchmark and silver is challenging $28. I expect both metals to undergo two-way volatility around those two key technical and psychological price levels for at least a few weeks.
It's been almost two months since any silver eagles have been reported sold by the mint -- and nearly a month for any gold eagles or buffaloes. So it should be plain for all to see that the mint does not wish to exacerbate the critical shortage in either silver or gold good delivery bars.
A higher scarcity corresponding with a higher price—this is the very picture of a fundamental price move. It is not merely an increase in speculative positions in the futures market, using leverage. It is an increase in the buying of physical metal.
Yet now the US Mint is admitting that there’s actually a “global silver shortage,” which makes you wonder if this scheme is close to the end of the road.
The mining industry has little ability to ramp up silver production to meet rising demand. After years of high grading and under-investment in acquiring new reserves, gold and silver mining isn’t going to be a growth industry anytime soon.
More and more, the 4 and 8 big COMEX shorts appear stuck – unable to simply quit the concentrated shorting game. This is the only issue that matters in silver and gold and we all have a front-row seat to the spectacle.
This is our definition of peak mined silver. Will the silver mining industry be able to produce, or discover, enough silver that it’s able to meet demand without having to recycle?
