Gold weakened in early Wednesday trading as the EU and Greece reach a bailout agreement that still has to be voted on by parliament. Gold last reported a.m. is $1146.80 and silver is $15.09. Physical silver supply remains at critical levels as investors purchase everything available taking advantage of historic lows.
Silver is currently available for almost $9.00 per ounce under what it cost mining companies to produce it. Mining companies cannot continue generating negative cash flow indefinitely. It cost the average mining company about $24.00 to produce 1 ounce of silver. Costs to produce 1 ounce of gold are in the $1200.00 range.
After 4 years of gold price manipulation beginning in April 2011 in the futures markets by central banks, investors are still weary to jump back into gold but enthusiasm for silver remains at record levels. The U.S. Mint has temporarily suspended sales of the Silver American Eagle because there isn’t enough physical silver to keep up with demand. Price drops have not discouraged purchasers from jumping in who are looking for long term gains.
Reportedly, JP Morgan has amassed more than 350 million ounces of silver over the past several months. JP also increased their derivatives by more than 3 trillion in one quarter.
Why would JP Morgan who is, the Fed, and also owns COMEX attack gold and silver, suppressing prices until the “herd” mentality did it for them? Two reasons: U.S. dollar strength is dependent on weak precious metals prices and equally important, as seen above JP Morgan and bullion bankers are enjoying the opportunity of amassing gold and silver at greatly reduced prices.
When the dollar loses reserve currency status, JP Morgan will remain a global player having hedged its assets with real physical gold and silver. Western bankers may cede partial control to the Chinese in the not too distant future, especially if China backs the Yuan with gold, but they won’t be out of the game.
Global stock markets are ripe for harsh corrections and once again, precious metals will be the asset of choice.
We don’t have to be victimized by rigged and bloated stock markets. Gold and silver are available at basement prices and stand ready to protect our wealth.
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