Silver Price: Demand for Coins Rockets Higher

silver investing
Written by Mike Hammer
The US Mint was forced to suspend silver bullion coin sales in mid-February, saying they needed to “restock inventories.” Which is a no-fault way of saying “we ran out of coins.”  Or, “people wanted more than we had.”

In fact, people wanted a lot more silver.  Demand was up just over 100% year-on-year.  Or, twice as much for those who prefer their math on the easy side.

According to standard classroom economics that would send prices higher – but this is silver we’re talking about.  So what have prices done since then?  Why Professor, they’ve dropped of course.  That answer would get you an F on your Econ 101 exam, but if you predicted that in advance in the real world you’d be getting richer.  Remember that the market rewards “being right” by letting you make money, and punishes incorrect answers by taking your money.

So in what some call the ever-perplexing world of silver, what happens next? You’ll recall on Tuesday we talked about the chart technicals for silver and how they’re pointing up.  Well, the COT report is currently showing the opposite. Traders, it seems, have had enough of holding silver and have swung to the sell side.  Which generally portends a near-term decline in silver prices.

On balance, this all says silver prices are more prone to drop down to chart support rather than rise up to resistance. This morning we’ll be looking at put option prices to see if it makes sense to open a position there.  Or, if this is just another good time to wait…

Signed,

The Gold Enthusiast

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as continuing themes. Mike graduated with a business degree and spent years as a financial advisor, before moving to New York and to pursue a career in IT and education. For more than a decade Mike has been working with the Adam Mesh Trading Group as a stock market and commodities mentor. He’s trained over 200 individuals, spoken at several national conventions, and is a frequent contributor to educational webinars.

Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keeps him in touch with "the student mindset".

Mike focuses on the precious metals markets, the energy industry, and the financial sector. His motto is "Plan your trade, then trade your plan!"

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1 Comment

  • You think maybe J P Morgan Chase cornering the Silver Mkt. might have something to do with the prices ? ? ? Others went to jail for that!