Many investors consider the recent drop in gold, silver and platinum prices to be the perfect opportunity to build (or add to) their precious metals position. With the price down, the basic law of supply and demand has kicked in and demand for silver bullion and silver coins has risen sharply. Short-term, supply has gotten tight, as some dealers scramble to keep up with demand.
We also saw a major disconnect between Physical Gold vs. Paper Gold as a massive sell order hit the futures market to sell 400 tons of gold! But at the same time small buyers rushed to their local dealer to take advantage of the price drop and stock up on the physical metal. And of course since gold and silver prices tend to move together we saw similar action in the silver market as well.
In another article, Jeff Clark, Senior Precious Metals Analyst for Casey Research told us that they talked with the wholesalers directly. These are the big boys, the bullion banks, bullion traders, and refiners. They deal in wholesale trades only, in large quantities. These boys supply the dealers and investment funds.
Here’s a summary of what Jeff found out about what occurred during the week after April’s 9.3% selloff in gold… [Read more...]