Quote

Silver Stock Report "Investors are still a very tiny part of the overall market, maybe 10%."

ReportGold
Date02/10/2009
Loaded Date02/10/2009
TitleSilver Rises; Investors Pause
QuoteMonday's auctions are always the slowest ever, and thus, the best time for you to buy.

On Monday, we offered 9500 ounces in about 30 auctions, and we sold about 1900 ounces. I mention this because I feel it's important for you to know the buying sentiment out there. On Saturday, we sold about 5500 oz., less than a record, but significantly more.

Meanwhile, silver prices continue to march ever higher.

Again, this market seems like it is NOT driven by investor demand, not in the slightest. Investors are still a very tiny part of the overall market, maybe 10%. It appears as if the paper futures contract sellers remain in control.

But physical silver demand still remains stronger than it has been in 15-20 years.

Some of my more cautious customers ask me about selling back the rounds, asking what my buy back price will be. Well, that's the thing. Nobody is selling. That's why nobody has them for sale, unless they are making them new, like I'm doing. I suppose I could offer to buy them back at about $1.00 over spot. But again, we are just not set up to take any incoming orders to sell, since none of my readers really want to sell. Or, they offer me high prices like $3-5/oz. over spot, thinking that will raise the price. It will raise the price, because it means their product is basically not for sale.

I'm a silver buyer, but the flow is only one way right now, from 1000 oz. bars, to rounds, and back out the door. I don't hold cash to be able to buy, but I have cash coming in daily from the auctions that I could divert into buying from the public, if need be, but again, the public is not selling.

Some may think that "the spread" is bad, as I would buy silver at $1 over spot, yet sell it at $2.25 over spot. But the spread is actually better than that, as I see some of my customers reselling the same silver I sold them, for more money, at eBay! So, in that sense, there is no spread, it's profits only!

Some of my readers think that my selling silver is depressing prices. No, it's not. My selling is only helping to lower premiums over spot, not actually lowering spot. As I sell silver, I continue to buy, so other potential silver buyers are denied the silver that goes into making the rounds.