Imports near all-time highs in South Asian nation grappling with gold shortages
Silver American Eagle coin sales are on pace to break the all-time record set in 2011 by the U.S. Mint. Almost 37 million have been sold through early October, compared with the 39.87 million sold during all of 2011."If present demand continues and our weekly allocations of between 800,000 to 900,000 coins remains constant, we'll set a new record for sales in 2013," acting Mint chief Richard Peterson has predicted.
The Mint's Web site shows that as of Tuesday (Oct. 8), 866,500 silver Eagles have been sold this month, and 36,954,500 have been sold for the year, with more than two months left in 2013.
$25 silver? Or $100 silver?
And the price of the metal, which has both monetary and industrial applications, is likely to rise. Members of the London Bullion Market Association predicted at their recent convention that silver will rise on average about 20%, to $25, by its convention in November 2014. Sixteen percent of those polled think silver will be the top gainer over gold, platinum, and palladium next year.
Leeb Capital Management chief Stephen Leeb offered up an even more bullish silver forecast in a recent interview with King World News:
"Silver for photovoltaics is expanding enormously right now. Demand for silver in this sector has nowhere to go except higher. This is going to drive the price of silver over $100. I do expect for silver to be stronger than gold over the next year or two because of this explosive situation. It wouldn't surprise me at all to see the price of silver hit $110 in the next 24 months. The price of silver is going to super-surge. But the mainstream media will be saying it is because of massive demand for photovoltaics -- they won't be admitting that it's also because the financial system is going to hell."
And with the U.S. just days away from a potential debt default on Oct. 17, gold has found support around $1,300, but if lightning strikes with a Lehman Bros.-type catastrophic scenario, "you'd want silver coins to buy gasoline and groceries," said Jim Rickards, a senior managing director at Tangent Capital and author of The New York Times best-seller "Currency Wars."
Gold scarcity sends Indians into silver
Record silver demand isn't occurring just in the U.S. India is reporting a surge in imports as its citizens turn to the white metal in the face of new government restrictions on the gold trade, launched to rein in the nation's gaping account deficit.
"Indian retailers are paying more for gold than the metal's international price as a festival-season buying rush and curbs on imports have led demand to far outstrip supplies," The Wall Street Journal reported Wednesday as premiums hit $50 an ounce there. "Restrictions on imports have now led to a shortage of gold in the market, just as festival-season demand has started picking up."
"The demand is very strong. But there is no gold available," said Vasu Acharya, director of Parker Bullions, one of India's largest bullion dealers.
Supply problems have thus led many Indians into silver as a cheaper, more-plentiful alternative. "Ever since the government has started putting measures to curb gold imports, demand for silver has seen a sudden surge," said Monal Thakkar, president of Amrapali Industries. "People are buying silver as a viable investment option," he added.
Imports rising at torrid pace
Now silver imports are on pace to hit a record high this year as the wedding and festival season drives up buying. "There has been a massive improvement in silver imports and we will continue to see more. Investors are taking advantage of lower prices and the lack of restrictions on silver imports as of now," said Harmesh Arora, director with the Bombay Bullion Association.
According to the GFMS metals consultancy, India imported 4,073 tonnes of silver from January to August, more than double the 1,921 tonnes in the whole of 2012, when a jump in prices in the peak season hurt demand. The record high was 5,048 tonnes in 2008.
"Going forward, the recovery will be sharper in silver compared to gold," said Gnanasekar Thiagrajan, director with Commtrendz Research, noting that silver would be in demand as an industrial metal, too.
For now, much of the silver flooding in is finding its way to rural areas, where industry officials expect a surge in disposable incomes after a bountiful monsoon boosted agricultural harvests.
"There is less gold available, so rural people will gradually move to silver. It will be a more of a default option than a conscious choice," said Rajesh Khosla, managing director with refiner MMTC PAMP.
"Monster Box" is a monster deal
Silver has it all: monetary qualities and endless industrial applications. And when gold rises, silver can rise even higher -- exponentially so. One metal expert gave this analogy: Gold is the B-2 bomber to silver's F-16 fighter jet. And perhaps most importantly, silver's cheaper price offers an attractive entry point for investors who think gold is too expensive.
If you're thinking about acquiring silver American Eagles, consider a "Monster Box": 500 1-oz. bullion coins, packaged in 25 tubes of 20 coins each, in a sealed green box from the Mint. It's one of the most economical ways to start stacking silver Eagles.
Source: http://www.blanchardonline.com/investing-news-blog/econ.php?article=6454Related Topics: Dusty Baker Malcom Floyd brandon jacobs teresa giudice Jason Dufner
