Updated 7/22/2015 Gold prices are lower in early Wednesday trading as precious metals fight to regain momentum after Tuesday’s futures sell-off. Gold prices remain near 5 year lows which means continued record demand for physical silver. Investors understand that purchasing silver under production costs is a no brainer as witnessed by the current shortage in physical silver. Gold last reported a.m. is $1094.90 and silver is $14.92.
Gold prices are steady in early trading Tuesday after Monday saw what appeared to be another futures gold scam that pushed the metal to a 5 year low. Gold last reported is $1108.90 and silver is $14.99. Suppressed prices continue to place strains on global silver supply as buyers race to purchase “poor man’s gold.” As silver prices go lower, demand skyrockets.
Silver has taken a beating as it follows a one year slump in gold but it’s not out of the game. Investor sentiment has been throttled by declining prices but overall physical demand, especially in the industrial sector has seen record highs.
From December 2008 to mid 2011, silver prices tripled and gold climbed 70 percent as both metals hit all time highs. Since 2011, precious metals have struggled to hold solid gains as repeated massive dumps in the futures markets continue to halt advances. It’s important to remember that most precious metal sold in the futures markets is not available for physical delivery. We would be correct in saying that gold and silver has been sold that does not actually exist. Futures markets are highly unregulated and open to fraudulent activity courtesy of big banks.
In 2014, gold fell 28 percent and silver plunged 36 percent equating to the steepest declines since 1981. Not to be concerned, industrial usage has guaranteed silver will rebound. Hedge funds are running into silver with a net long position valued at more than $4 billion dollars.
2015 is the first year we will see a drop in global silver production as a lack of investment into new mines accelerates a physical shortage. Investors are standing on the side lines weary of investing capital as mining companies reap net losses, even as demand outpaces global mining supply.
The silver trump card is that silver is an energy metal and in 2014, 56 percent of global silver supply went to industrial usage. A growing demand by the solar industry alone is expected to use more than 75 million ounces of silver this year. China will account for the largest percentage of the increase as it hopes to install more than 17 gigawatts of solar power capacity by the end of the year.
Current events are pointing to a coming physical silver shortage over the next several years. Now is the time to go all in for silver as it is currently available for $9 dollars an ounce under production costs. Mining company losses can be our gain while supplies last.
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