{"id":76702,"date":"2015-08-11T14:02:00","date_gmt":"2015-08-11T18:02:00","guid":{"rendered":"http:\/\/countingpips.com\/?p=76702"},"modified":"2015-08-11T16:00:48","modified_gmt":"2015-08-11T20:00:48","slug":"u-s-and-canadian-mint-dysfunction-snowballs-as-silver-coin-premiums-rise","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/08\/u-s-and-canadian-mint-dysfunction-snowballs-as-silver-coin-premiums-rise\/","title":{"rendered":"U.S. and Canadian Mint Dysfunction Snowballs as Silver Coin Premiums Rise"},"content":{"rendered":"
August 11, 2015<\/div>
\r\n<\/div><\/div>

By Clint Siegner<\/em><\/p>\n

Lower precious metals prices<\/a> on Wall Street aren\u2019t necessarily bringing lower prices on Main Street.\"\"<\/p>\n

The retail market for gold and silver coins, bars, and rounds has been swamped with high demand since mid June.\u00a0 Both the U.S. Mint and the Royal Canadian Mint continue to run into serious issues keeping up with retail silver coin demand.<\/p>\n

After selling out in early August, the U.S. Mint resumed deliveries of Silver American Eagles, but it has since been rationing them out.\u00a0 And this week brings word of new silver supply-chain problems. Mint officials let it be known they are cutting further back on Silver Eagle shipments, reducing them as much as 20% below already insufficient levels.<\/p>\n

Dealers already had some catching up to do, and similar news from the Royal Canadian Mint (RCM) late last week won\u2019t help either.<\/p>\n

RCM officials announced significant \u201cproblems\u201d with sourcing silver blanks for production of the Silver Maple Leaf. At least one major wholesaler stopped accepting new orders for the popular coin all together.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

The one-two punch of U.S. Mint and RCM rationing and production breakdowns promises to keep buy premiums elevated and cause shipping delays on most government-minted silver coins for the foreseeable future.<\/p>\n

Are Delivery Delays and Higher Premiums Reasonable?<\/strong><\/p>\n

Bullion investors watched spot prices fall relentlessly during the month of July and a whole lot of them decided to go bargain hunting. Unfortunately, when they called their dealer to buy silver, they found significantly higher premiums and delivery delays on most items.<\/p>\n

\"\"Seizing the opportunity to buy silver on the cheap when spot prices fell below $15 per ounce has proven harder than many expected.<\/p>\n

Inventory constraints in the marketplace SO FAR are primarily a function of bottlenecks in manufacturing of certain products \u2013 not an outright shortage of raw silver grain or bars.<\/p>\n

Reputable dealers like Money Metals Exchange will only accept orders for precious metals that it already owns and for products it knows it can fulfill. Responsible dealers make commitments to customers up front about when a customer should receive delivery, and then meet (or exceed) those commitments.\u00a0 And, as frustrating as it might be to do so, prudent dealers will stop selling items that cannot be reliably sourced.<\/p>\n

Unfortunately, some dealers operate differently \u2013 taking all the orders they can regardless and hoping and praying they can follow through as promised.\u00a0 That\u2019s risky for both the dealer and the customer.<\/p>\n

If your dealer is consistently missing commitments on delivery, or quoting delays significantly longer than other dealers, you should be wondering if the company truly is \u201cselling silver they don\u2019t have.\u201d Shipment in one to two weeks after payment clearing is reasonable given current bottleneck conditions. Anything approaching a multi-month delay at this point should be viewed as unacceptable.<\/p>\n

Demand during Price Drops Tends to Force Premiums Up<\/strong><\/p>\n

\"\"The physical market for precious metals, unlike the paper futures markets for gold and silver, DOES respond to real-world supply and demand fundamentals. This market is also extraordinarily competitive. Premiums have to be set at fair levels or customers go elsewhere.<\/p>\n

One misconception is that higher premiums go straight into the dealers\u2019 pockets. In reality, the wholesale premiums and fabrication costs associated with securing inventory are also rising.<\/p>\n

Dealers aggressively bid for scarce inventory and production capacity so their customers can access the supply they want.<\/p>\n

In recent weeks, for example, Money Metals Exchange has actively encouraged customers to buy silver rounds, where premiums rose only modestly, and silver bars<\/a>, where premiums increased only a few cents.<\/p>\n

Bargain hunting for bullion investors is best done when the physical markets are quiet and premiums coming down.<\/p>\n

 <\/p>\n

\"\"Clint Siegner is a Director at <\/em>Money Metals Exchange<\/em><\/a>, the national precious metals company named 2015 \u201cDealer of the Year\u201d in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals\u2019 brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Clint Siegner Lower precious metals prices on Wall Street aren\u2019t necessarily bringing lower prices on Main Street. The retail market for gold and silver coins, bars, and rounds has been swamped with high demand since mid June.\u00a0 Both the U.S. Mint and the Royal Canadian Mint continue to run into serious issues keeping up […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-76702","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/76702","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=76702"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/76702\/revisions"}],"predecessor-version":[{"id":76706,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/76702\/revisions\/76706"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=76702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=76702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=76702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}