When I posted 100-oz silver bar shortage developing in US, silver was trading in the $27 range, and lower prices seemed possible. As this is written, silver is trading well above $30, a turnaround that has left many investors still on the sidelines, as I discussed in that post.
It was on the possibility of lower prices causing a surge in silver buying that I predicted a shortage of 100-oz silver bars. However, silver did not drop in price but turned higher, which did create further tightness in the 100-oz silver bar market as some investors bit the bullet and bought. While there is not a severe shortage of 100s, some dealers are out. CMIGS has an ample supply at this time but does not have all hallmarks.
Silver’s price action may be explained by Gene Arensberg’s analysis Near Zero Contango in COMEX Silver Futures.
Also of interest to silver investors should be Arensberg’s post of February 1 where he noted that silver may have another ten bucks in this move. Silver was about $28.50 then, so “another ten bucks” would mean nearly $40 if this turns out to be what he calls a “definition move.”
At CMIGS, we recommend buying silver and gold in physical forms and holding for the long haul. We believe that the world’s political and financial climate make precious metals the right investments at this time. Investing under such conditions does not require subscribing to newsletters. You simply buy, secure your holdings and wait until some form of sanity returns. No one knows how long that wait will be.
Still, Arensberg’s Got Gold Report is an excellent resource for gold and silver investors who want to follow the markets closely. Arensberg provides excellent analysis of the COT reporting in the gold and silver markets, and his work often reveals smart entry points. His February 1 post is a prime example.
Additionally, Arensberg makes junior mining stocks recommendations, which he calls Vulture Bargains. Such stocks offer the potential for substantial returns but carry considerable risks. A
subscription to Got Gold Report runs $200 annually.
You’re a late-comer. I bought silver in the spring of ’08 at $12.25 per oz. My only regret is that I didn’t buy more. I expect it to be $35 before long, which will triple my investment in about three years. If some sanity in government and finance doesn’t return soon, it won’t matter how much I bought, I’ll have plenty of hard metal to barter when the dollar become thoroughly worthless.
A late comer? I’ve been a silver bullion dealer since 1973.
As for your regreat that you “didn’t buy more,” you never buy enough of a good investment, and you always buy too much of a bad one.
You say “If some sanity in government and finance doesn’t return soon.” It won’t. Be prepared to hold your silver for a long time.
Bill: Always enjoy your blogs. My last order of two monster boxes of SE’s arrived safely, but it took ten days out of Boston(?) to arrive by P.O. mail. Perhaps this is an indication of shortages to come.
My mail person called me at 8AM to say “your coins have arrived and I’ll bring them by early before I start my route”. Great service, but the “machine parts” label doesn’t fool them anymore. Hope I can buy more and average my cost up. Wishing you a great year! Hi Ho Silver! Away! Bill T.
Bill, you’re stuck in sunny California. The ten days was more a result of the massive snow storms hitting the East. While the US Mint is enjoying record sales of Silver Eagles, the Mint is continuing to turn them out. The delay was weather-related.
As for your postal carrier no longer being fooled by the machine parts label, it only works the first couple of times. After a while, even the most disinterested postal worker figures out what a box of Silver Eagles looks and feels like.
Before buying more Silver Eagles, seriously consider junk silver coins. Lower premium; more coins for the dollars invested; once used as money, could be used as money again.
Ok, I am surely the laggard. I own no gold or silver but am looking to buy junk silver coins and possibly some gold – only physically owning it. What is a good amount to buy starting out in silver and/or gold. How much will you need if the economy does collapse and how long will that sustain you? Also, going forward what should your cache look like? Are todays prices good for buying at this point in time?
I agree the stock market is way too volatile to be in right now. I just stick with gold and silver. Its an easy way to get a sure return on your money. I agree with you our economy is insane, and whatever way it turns you can be sure your gold will be worth more money than it is today.
I want to get into silver. Is it better to just buy the 100 oz bars or buy and trade silver stocks such as SLV? I know the USA is heading for big troubles ahead, but the financial collapse in the dollar plus hyperinflation that everyone in the gold/silver business is talking about may not happen for years yet?
Whether you go with physical silver (100-oz bars, for example), silver mining company stocks or SLV depends on a couple of factors: your outlook for the future and your willingness to take risks.
Buying physical silver is the most conservative because you get the hard, tangible product, which cannot be debased by government or mismanaged.
Buying silver mining stocks provides the opportunity to participate in a rising market with the potential of greater gain. Pick the right company, and its stock price should rise greater on a percentage basis than the price of silver. However, investing in silver stocks carries the risks that go with all stocks: bad management decisions, accidents that close properties, and political difficulties in some countries (nearly all, including the US).
With SLV, you do not own silver. You own stock in a company that owns silver. If everything remains “normal,” you participate in silver’s price action.
By far, owning physical silver is this most conservative way to go. If you see really hard times ahead, consider junk silver coins. If think that sometime in the future “normalcy” will return to the financial scene, then 100-oz silver bars are excellent investment vehicles.
Hey folks….I’m a very late convert to silver bug life….since I bought my prices seem high for physical bullion….lately I’ve noticed that there is a very real shortage of good reputable bullion product out there…..whenever I see the bullion banks manipulate the prices lower I manage to grab a few more oz’s ….if all you long time silver bugs are right these higher priced bullion products will seem like a bargain in the near future….thanks for letting me bend your ears a little….always enjoy the posts….bud
Your advise and professionalism served us well before Y2K, and we will continue to seek your advise in the uncharted that lie ahead.
Zooming past $33 today! The takeoff for silver is here, technicals are pointing next stop $50!
Nice article, glad to know that there are people out here that are aware of the global financial situation. In my opinion just owning the precious metal is the most important thing. Not really concerned with the volatility, wealth preservation is the key.
Thanks, Bill, for being a man of integrity. Your counsel and CMI are a valued asset as we now look at silver.