Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at both the supply and demand sides of the silver market. (See the Precious Metals section.)
Precious Metals:
The demand side for physical silver is off the charts. But meanwhile, the supply side of the silver market equation is downright grim. Consider these factors and some recent news:
- In the United States, Newmont has temporarily closed some mines.
- In Canada, many mines–in all sectors, not just silver–have been put on hiatus.
- Ditto for mines in Peru.
- Mexico’s Ministry of Health announced that all silver mines in Mexico will be shut down until at least the end of April, because of the Wu Flu pandemic.
- About 30% of silver production worldwide is a by-product of copper, zinc, and lead mining production. But all of those industrial commodities have had depressed prices for many months, and some mines have therefore shut down, or shifted to very limited production.
- Global silver production had already been in a gradual decline, since 2017.
- Silver refining production, particularly in Nevada’s Carlin region is slowing, or in some cases stopping.
Although the official spot and futures prices of silver are still depressed because of fallout from the stock market crash (read: traders liquidating assets, for margin covering), the real world physical market is red hot. Dealers are charging as much as $19 over spot as a premium, for 1-ounce Silver American Eagles.
I expect the spot price of silver to rebound, by the end of June. And, as I’ve mentioned several times, I expect the silver-to-gold price ratio to get back closer to normal. For that reason alone, I prefer buying silver rather than gold. Silver will gain, relative to gold. So, if you can find any silver, then stack it deep!
Economy & Finance:
Reader DSV sent this: “There Are Basically No Sales”: U.S. Auto Industry Enters Total Collapse From Nationwide Lockdown
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Simon Black, over at Zero Hedge: There’s a major sovereign debt crisis looming
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At Wolf Street: Week Two: How COVID-19 Lockdowns Impact US Housing Market. Mortgages Give Clues: It Gets Uglier