Silver Is ‘Undervalued’ Relative to Stocks, Bonds, Gold – GoldCore

– Silver is ‘undervalued’ relative to stocks, bonds and gold: GoldCore
– Silver at $14/oz is cheap relative to gold with gold-silver ratio over 85
– Silver drops to 32-month lows prompting sellout of Silver Eagle coins at U.S. Mint
– U.S. Mint said “recent increased demand” prompted a “temporary sell out” of its American Silver Eagle bullion coins as investors see silver coins as a bargain
– “We believe that we are on the verge of another financial crisis”

by Myra Saefong of Marketwatch:

A drop in silver prices this year has attracted investors seeking a bargain, prompting a temporary sellout of the 2018 American Silver Eagle bullion coins at the U.S. Mint this month.

At about $14 an ounce, silver was bound to attract more buyers. It’s “now very undervalued, relative to stocks, bonds, and, indeed, gold,” maintains Mark O’Byrne, research director at precious metals brokerage GoldCore in Dublin, which has seen the amount of the metal clients have stored grow 24% this year.


Silver in USD – 10 Years

“We believe that we are on the verge of another financial crisis, likely due to contagion among European banks, which will impact risk assets,” he warns, adding that this should lead to “significant hedging and investment demand for both gold and silver.”

“The sellout of Silver Eagles implies that demand for physical [silver] has recently been increasing,” says Chris Gaffney, president of World Markets at TIAA Bank.

“With Silver Eagles being the most popular bullion coin available, this is a good indicator of physical demand,” he adds, and higher demand “makes sense,” given that prices are nearing multiyear lows again.

The mint announced on Sept. 6 that it is producing additional coins to restock its depleted inventory.

Edmund Moy, director of the U.S. Mint from 2006 to 2011, says the recent sellout of the 2018 coins from strong growth in demand was unusual. He adds that sellouts happened much more frequently during the financial crisis of 2007-2009 and the Great Recession, which began in late 2009. Back then, the mint had a hard time meeting surging demand, as some worried investors sought refuge in precious metals.

Moy notes that sales peaked at 47 million ounces in 2015, but that this year’s are still running above the 10 million-ounce annual totals seen before the financial crisis and Great Recession. He expects sales to end the year at 11 million or 12 million ounces.

Overall physical demand for silver—including metal used in jewelry and other commercial items and processes, as well as coins—slid to 1.018 billion ounces in 2017 from 2016’s 1.041 billion. Nonetheless, there was still was a supply deficit of 26 million ounces last year, the fifth straight annual shortfall, according to the Silver Institute.

The U.S. Mint says that increased demand was behind the Silver Eagle sellout. Moy says the “surge was likely caused by silver speculators spurred by the gold/silver ratio,” which currently stands at around 1 to 85, based on Tuesday’s settlements. That means it took about 85 ounces of silver at $14.15 to buy one ounce of gold at just over $1,202. The historical norm is 1 to 50, “which means gold is overpriced or silver is underpriced,” Moy observes.

“Speculators are betting that silver is underpriced.”

Full article on Marketwatch

 

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News and Commentary

Gold Prices Reclaim $1,200 Ahead of New U.S. Tariffs on China (Investing.com)

Trump puts new tariffs on China as trade war escalates (CNBC.com)

Asian markets mostly shrug off latest U.S. tariffs targeting China (MarketWatch.com)

Trump slaps tariffs on $200 billion in Chinese goods, spares some consumer tech (Reuters.com)

Trump set to slap $200 billion in tariffs on Chinese goods: WSJ (CNBC.com)


Source: US Funds via GoldSeek

History Is Due To Repeat Itself – Dalio on Coming Currency Crisis (Youtube.com)

It Feels Like 2007 All Over Again… (BonnerAndPartners.com)

Is This Just the Calm Before the Storm? (GoldSeek.com)

How Anglo Quietly Built a Commodity Trader in Glencore’s Shadow (Bloomberg.com)

How Politics Drove an Irish Ruling Family Into a Ditch (BonnerAndPartners.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below


Gold Prices (LBMA AM)

17 Sep: USD 1,196.80, GBP 914.00 & EUR 1,027.21 per ounce
14 Sep: USD 1,206.20, GBP 918.76 & EUR 1,030.58 per ounce
13 Sep: USD 1,206.65, GBP 924.41 & EUR 1,038.68 per ounce
12 Sep: USD 1,197.80, GBP 919.07 & EUR 1,033.10 per ounce
11 Sep: USD 1,194.00, GBP 915.92 & EUR 1,028.75 per ounce
10 Sep: USD 1,195.80, GBP 923.28 & EUR 1,032.45 per ounce

Silver Prices (LBMA)

17 Sep: USD 14.17, GBP 10.81 & EUR 12.15 per ounce
14 Sep: USD 14.22, GBP 10.83 & EUR 12.15 per ounce
13 Sep: USD 14.23, GBP 10.90 & EUR 12.24 per ounce
12 Sep: USD 14.16, GBP 10.90 & EUR 12.22 per ounce
11 Sep: USD 14.13, GBP 10.85 & EUR 12.19 per ounce
10 Sep: USD 14.22, GBP 10.99 & EUR 12.28 per ounce


Recent Market Updates

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– Video: BREXIT To Contribute To London Property Bubble Bursting
– Australia’s Banking System May Be The “Bloody Big Butterfly” Which Triggers Next “Financial Storm”
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– London Property: Here Comes the Crash
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– This Week’s Golden Nuggets

 

Mark O'Byrne

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