If you're familiar with this site, you'd know that we've been long time advocates of precious metals. However, when clients begin to call in asking to sell their conservative holdings in order to buy as much silver as they can get their hands on, one has to wonder why the sudden alarm? Well, recently, rumors have been afloat all over the internet about a potential silver shortage, especially in 100 oz bars. Often when such sensational news stories like this go viral it's good to do a little digging and see how much truth there is to it before going into panic mode, liquidating your entire portfolio, and buying your weight in precious metals.
I spoke to Kathryn Derbes, CEO of KDerbes Precious Metals LLC, and asked her whether this was just hype or an actual cause for alarm. According to her, there weren't any current shortages in the silver market to speak of except for secondary-market specialty bars, specifically Engelhards, that haven't been manufactured since the late 1980s. Unfortunately, this small overlooked detail may have been the only source of all the news that's currently going around.
Also, Kathy related that dealers who bought 100 oz silver bars near the peak earlier this year would naturally be stuck with high-priced inventories that they'd be reluctant to sell and take a loss on—holding out, of course, until prices rise back to where they could make a profit. Thus, the appearance of a shortage may just be due to the unwillingness of dealers to sell at currently suppressed prices unless they can make up for it with higher premiums.
All in all, whether or not this is the beginning stage of an actual silver shortage or just the natural course of doing business, time will tell. Fortunately, if you'd like to hear more about the current state of the silver market and what's really going on, Kathy will also be speaking on Jim's show tomorrow for a special interview regarding this very topic.
About Cris Sheridan
Cris Sheridan Archive
|04/17/2014||Dr. Ben Hunt: How Sentiment and Narratives Shape the Crowd||bcast|
|03/31/2014||Is the Entire Market Rigged?||story|
|03/27/2014||Duration Risk: Why "Tapering" Is a Mirage and the Fed May Be Loosening Instead||story|
|11/27/2013||Sync: The Unconscious Life of the Market||story|
|08/23/2013||Big Data and the Doomsday Machine||story|
|08/15/2013||How to Hack the Stock Market||story|
|07/12/2013||Go “Double Long” Your Neighbor's House||story|
|06/28/2013||The Data-Dependent Fed: One Final Step towards Real-Time Market Management||story|
|06/21/2013||Surveillance vs. Infrastructure: When a Country Falls Apart||story|
|05/06/2013||A High Frequency Map of the Market||story|