Silver Bullion and American Eagles- Supplies are back!

The metal with the most momentum in terms of investor interest is silver. Silver bullion demand in the third quarter exploded, with sales of Silver Eagles hitting a record 14.3 million ounces. That number would have been even bigger if the dysfunctional U.S. Mint hadn’t arbitrarily limited supplies of coins going out to dealers. The market for physical silver remains tight, with supplies of most bullion products in short supply and premiums elevated.

Silver spot prices haven’t been affected – at least not yet. The white metal spent most of the third quarter trading within a $14.50 – $15.50 range.

However, the weekly silver chart now shows an interesting wedge pattern developing. Silver prices briefly touched the bottom of the wedge last week before closing near the top. A solid weekly close above $15.50 would represent a bullish upside breakout, while a decisive break below $14.50 would carry bearish near-term implications.

999.9 gold bullion, three bars

Gold prices rebounded from a two-week low on Monday, closing higher for the first time in four sessions.

Gold for December delivery rose $3.40, or 0.3%, to settle at $1,166.20 an ounce on the Comex division of the New York Mercantile Exchange.

“The weaker dollar is giving a bit of support to the gold market,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview according to Bloomberg News. “It’s widely anticipated that the FOMC won’t do anything this week because of too much global weakness.”

The U.S. dollar weakened after a Commerce Department report showed new home sales tumbled 11.5% in September.

The yellow metal ranged from a low of $1,162 to a high of $1,168.30. Gold declined 1.7% last week, its first weekly loss in three weeks. The precious metal on Friday ended at its lowest price since Oct. 9.

Elsewhere, silver for December delivery tacked on 8 cents, or 0.5%, to close at $15.91 an ounce. Silver prices traded from $15.77 to $15.98. Last week, silver tumbled 1.8% after three straight weekly gains of 1.9%; 3.6%; and 1%.

In other precious metals futures:

  • January platinum lost $4.20, or 0.4%, to $997.50 an ounce, ranging from $987.90 to $1,004.90.
  • Palladium for December delivery fell $9.95, or 1.4%, to $683.90 an ounce, trading between $678.05 and $694.50.

Last week, platinum fell 2.2% and palladium shed 0.8%.

London Precious Metals Prices

Earlier fixed London gold and silver prices were mixed. In comparing their prices from Friday PM to Monday PM:

  • Gold added $5.15, or 0.4%, to $1,166.40 an ounce.
  • Silver declined 12 cents, or 0.8%, to $15.86 an ounce.

LBMA platinum and palladium prices are available on the LBMA’s website with a delay of midnight.

Last week, losses combined to 1.7% for gold, 0.4% for silver, 0.1% for platinum and 0.6% for palladium.

US Mint Bullion Coin Sales in October

United States Mint bullion sales were unchanged Monday as of 4:14 PM ET.

In related news, the U.S. Mint this week limited Silver Eagle sales to 1,043,500. The agency has restricted weekly sales of bullion American Silver Eagles since temporarily running out of them in early July.

Below is a listing of United States Mint bullion products with the number of coins sold during varying periods. Products with an asterisk (*) are no longer available.

US Mint Bullion Sales (# of coins)
Monday Sales Last Week Sept Sales Oct Sales YTD Sales
$50 American Eagle 1 Oz Gold Coins 0 2,500 98,500 22,500 542,500
$25 American Eagle 1/2 Oz Gold Coins 0 1,000 9,000 3,000 66,000
$10 American Eagle 1/4 Oz Gold Coins 0 0 20,000 4,000 146,000
$5 American Eagle 1/10 Oz Gold Coins 0 10,000 175,000 45,000 875,000
$50 American Buffalo 1 Oz Gold Coins 0 1,500 22,000 10,000 180,500
$1 American Eagle 1 Oz Silver Coins 0 926,500 3,804,500 2,931,500 38,986,000
2015 Homestead 5 Oz Silver Coins* 35,000
2015 Kisatchie 5 Oz Silver Coins* 42,000
2015 Blue Ridge Parkway 5 Oz Silver Coins* 45,000
2015 Bombay Hook 5 Oz Silver Coins* 45,000 45,000


This can sum it all up for you.



The Federal Reserve is about to raise the discount rate and the dollar will probably fall.

As the dollar falls, silver and gold will rally.

Silver tends to rally at greater magnitudes than gold and the gold to silver ratio is at a multi-year high.

The best reward per unit of risk will probably be found by shorting gold and buying silver.

The past 3 years have been quite brutal for holders of silver, with the average position down around 50%. In fact, over the past 4 years, silver has only increased on a year-over-year basis in 5 months!

With such a merciless sell-off many are doubtless tossing in the towel or considering exiting all remaining positions. While this is totally understandable, I believe selling now is a mistake. In fact, I think now is an excellent time to buy silver.

Recent changes in Federal Reserve policy indicate that in the very near future, the discount rate will be increased. The discount rate is the bedrock rate of the United States economy against which nearly all other interest rates are evaluated. When the Federal Reserve raises interest rates, ramifications are felt across the entire economy. Specifically, for the past 42 years, every timethe Federal Reserve has raised the discount rate following a lengthy period of low stability, the dollar falls at some point by 10-12% over the next 2 years.

The economic significance of this change is profound. As the dollar weakens, basic economic theory teaches that it will take a greater amount of dollars to purchase the same amount of silver – leading to a higher price of silver. I only tend to believe economic theory if it can be quantified and proven through data.



As you can see, economic theory is substantiated by reality – as the dollar falls, silver tends to rise. Over the past 42 years, every single time that the Federal Reserve has increased the discount rate, the dollar has declined by 10-12%. Historically, when the dollar falls by 10-12%, silver has risen by 40-60%. In other words, the data strongly suggests that it is time to buy silver.

The Gold Trade

Not only does the dollar suggest that silver is in for a strong gain, but also, the gold-to-silver ratio strongly suggests that we are at the end of a strong gold, weak silver cycle. You see, from a financial standpoint, gold and silver are very, very similar. Don’t believe me? Here’s the data.

Gold and silver returns have historically exhibited fairly strong correlation. In other words, if gold increases over a time period, silver increases as well – but only in direction, not necessarily in magnitude.

As you can see from the chart above, silver tends to experience stronger moves than gold, even though the direction is almost identical. I believe this is due to the heightened volatility associated with a less liquid instrument. A fund selling $1 billion of gold futures will not cause the same impact as selling $1 billion of silver futures – silver will move substantially more.

Since silver and gold are quite similar from a financial standpoint, we are afforded the ability to trade one instrument against the other.

We are at the cusp of an excellent investing opportunity. Over the past 4 years, silver has witnessed a 50% sell-off while gold has only experienced a sell-off around 30%. This has driven the ratio of the gold price to silver price to the highest level since 2008. Since gold and silver are similar financial assets, their prices will eventually revert to a mean. In other words, the current ratio of gold price to silver price is too high and will tighten. As you can see in the chart above, this type of opportunity only occurs every 5 years on average. And in each of the previous occasions, silver has historically rallied against gold over the next 3-4 years. For an investor seeking the maximum reward for risk taken, I believe shorting gold (NYSEARCA:GLD) and buying silver (NYSEARCA:SLV) represents an excellent investment.

Don’t get me wrong, I’m also bullish gold. I believe anyone purchasing either gold or silver is due for strong returns over the next 12-24 months. However, if you want to get the best Sharpe ratio, short gold, long silver is an excellent value proposition. Silver historically moves at greater magnitudes than gold, so as both gold and silver strengthen, the ratio of gold to silver will tighten.

Whichever way you decide to play it, the short of it is this – the Federal Reserve is increasing rates very soon. When rates rise, the dollar has fallen every single time. When the dollar falls, gold and silver rise.


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Silver Premiums Have Fallen, but the Short-Term Outlook Is Uncertain

Silver Premiums Have Fallen, but the Short-Term Outlook Is Uncertain
With silver prices rising almost 10%, retail buying of physical silver has lessened over the past three weeks – down from the frenetic pace over the past 4 months. That’s allowed premiums on many products to fall toward normal levels. Production backlogs and delivery delays have also been dissipating.

Ask premiums for the Maple Leaf, American Eagle, and Pre-1965 90% silver U.S. coins – the products that saw the sharpest hikes through the summer – are now leading the way down. The respite will help mints and refiners catch up. Dealers are taking the opportunity to replenish inventories.

2015-dated American Eagle silver bullion coins

More American Eagle silver bullions coins are available this week than in the previous two weeks, although that may not matter to buyers who haven’t ordered as many as they could since earlier this month.

The United States Mint has limited sales of American Silver Eagles since their return after temporarily selling out in July. This week’s allocation level advanced 4.4% to 1,043,500 coins. Last week’s amount slipped 3% to 970,000 coins from the prior week’s supply of 1 million coins.

Weekly inventories through most of the summer sold within a few days of their release. That hasn’t been the case for two straight weeks with a combined 113,500 coins left on the table.

The U.S. Mint does not sell bullion Silver Eagles straight to the public. They are sold through a network of authorized purchasers. AP’s consist of major coin and precious metals dealers, brokerage companies, and other participating financial intermediaries. They must pay $2 more than the spot value of each coin they buy.

Sales of the 1-ounce, .999 fine silver coins at 38,986,000 for the year are on track for an annual record, up 8.1% through the same time in 2014. Last year when sales ended at a record totaling 44,006,000, the coins through Oct. 23, 2014 posted sales of 36,066,000.


2016 Maple of Canopy Kaleidoscope of Color Gold Coin Released

Just in! An interesting read for the avid collector! The 2016 Maple of Canopy coin is beautiful! Designed by Emily Damstra. It is a limited mintage! It It is very attractive to collectors, although its price is ………………. Each coin has the following Mint-provided specifications……………………………

A new maple leaf-inspired coin, struck in 2 ounces of 99.99% pure gold to proof quality, features a colorful design of a large maple tree in autumn. The issue marks the first maple canopy gold coin from the Royal Canadian Mint. Silver editions launched in the past, and all of them have sold out.

2016 Maple of Canopy Kaleidoscope of Color 2 oz Gold Coin

2016 Maple of Canopy Kaleidoscope of Color 2 oz Gold Coin – obverse and reverse

The coin’s distinct imagery and extremely limited mintage of 150 make it very attractive for collectors, although its price is not for the faint hearted.

Designed by Emily Damstra, the reverse shows the trunk and branches of a maple tree from the viewpoint of someone looking up.

“There’s a towering sense of height as the viewer’s gaze sweeps along the trunk of the mighty maple tree, moving upward from the base over the intricately engraved fissures and ridges, to the branches that seem to spread out overhead and across the sky,” the Royal Canadian Mint describes.

“There, a lush canopy of fall foliage blazes brightly with rich hues of red, orange and yellow that have been painstakingly applied over the engraving to recreate nature’s autumnal palette.”

Inscriptions on the trunk of the gold coin read CANADA, 250 DOLLARS, and the year 2016.

2016 Maple of Canopy Kaleidoscope of Color 2 oz Gold Coin, Reverse

Reverse of the gold coin

The obverse offers Susan Blunt’s effigy of the Queen with surrounding inscriptions of ELIZABETH II and D G REGINA.

Each coin has the following Mint-provided specifications:

  • Mintage: 150
  • Composition: 99.99% pure gold
  • Finish: proof
  • Weight (g): 62.34
  • Diameter (mm): 42
  • Edge: serrated
  • Certificate: serialized
  • Face value: 250 dollars


Priced at CAD $4,899.95, or about US $3,730, order the 2016 Maple of Canopy Kaleidoscope of Color Gold Proof Coin by visiting the Royal Canadian Mint’s website at or by following the affiliate link located hereicon.