Supply Issues For Gold And Silver
Doug Eberhardt | Aug 03, 2015 01:46AM ET
Gold tried to take off on Friday, but it just couldn’t stay above the $1,100 level. The dollar broke below 97 and that was a signal gold needed to bounce. But it was short lived and the dollar moved past 97 again and gold below $1,100, where it stayed all day. You can see how the dollar touched the low from earlier this week, but bounced right back up. We need the dollar to break down more for a bounce in gold (and silver).
I have been saying that lower rates were ahead of us and the 10 Year Note fell 3.26% on Friday, settling at the low of the day 2.18%. I thought rates rose with a strong economy?
I said last week that sales have been brisk with this recent downturn in metals. Because of this, premiums have risen on some of the metals, and orders for many products have been pushed back 2-4 weeks, depending upon dealer and supplier. A couple years ago, when we had a severe dip in the metals, customers had to wait up to 8 weeks for some products as premiums soared.
The reason I mention it is because as many of you know, I have been calling for lower prices in the metals for some time now. Many have held off purchasing gold and silver because they are waiting for my “all in” article. I do have a large list to contact when I write that article. I want everyone to know that if metals do fall to where I presently think they can, and if supplies are somewhat of an issue now, please know that supply will also be an issue as we move lower. People don’t sell their metals, they hoard them. Many view it as insurance and know they have real wealth in their possession, not an “Illusion of Wealth.”
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Once we break lower in prices, you can expect premiums on many products to rise, negating any decrease in pricing, and also expect longer waits for delivery of metals. I will try and write my all in article BEFORE things get out of hand. I’m just putting the warning out now so you know what is coming when the real gold rush begins.
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