Low Silver Prices Lead to Increased Demand

Wayne Lin

9/14/2018 11:11:52 AM

Daily Gold & Silver Market Report – 09/14/2018

Earlier this month, the U.S. Mint ran out of 2018 Silver Eagle bullion coins following a temporary sellout. This increased demand is primarily due to the current, multi-year low market price for Silver. The mint released a statement September 6, announcing new stock would be produced. According to Barron’s, some industry insiders pointed out the U.S. Mint may have been caught off guard by the quick influx of physical Silver buyers when the Precious Metal began trading near $14 per ounce. The U.S. Silver Eagle is the most sought-after bullion coin in the world.

Edmund Moy, who was director of the U.S. Mint from 2006 through 2011, said sellouts were very common during the financial crisis from 2007 through most of 2009. Moy said such a sudden growth in demand was atypical of the market, adding the “surge was likely caused by Silver speculators spurred by the Gold/Silver ratio… Speculators are betting that Silver is underpriced.” Silver prices have been challenged over the last year by the strong U.S. dollar, high interest rates and consistent falling industrial demand since 2016.

Gold On Track for Weekly Gain

The price of Gold bullion has seen several gains this week, as the U.S. dollar lost strength. Friday morning, the dollar was down 0.9 percent, as indicated by the U.S. ICE Dollar Index. As mentioned on MarketWatch, Gold futures were also higher, as investors see the weaker dollar as a signal of higher prices to come. ActivTrade Chief Analyst Carlo Alberto De Casa was quoted as saying, “The weakening of the U.S. dollar is giving bullion a lift, increasing the chances of seeing further recoveries.” Events Friday could change the newfound traction for Gold, however. A retail sales report for the U.S. was released early Friday morning, which could have an impact, along with numbers regarding industrial production and September consumer sentiment, which were also released.

Bitcoin Prices May Trend Higher for Remainder of 2018

Cryptocurrencies have seen significant declines this week on the heels of a report that Goldman Sachs is postponing plans to initiate a trading desk for digital coins. While Bitcoin seemed to hold at first, prices soon plummeted, reversing all strength gained in early September. Crypto markets are known for ongoing volatility, but an analyst for Forbes suggests the recent round of sell-offs have been unnecessary. In an opinion piece posted Thursday, analysts feel the Goldman Sachs decision is temporary and part of the process many companies are going through to fold cryptocurrencies like Bitcoin into mainstream financial channels. The article goes on to observe that Bitcoin is susceptible to supply and demand like many other investments, and that lack of ability to use digital coins for transactions may have lead to the recent drops in price.

At 12:10 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,2197.50 Down $8.00
• Silver, $14.17 Down $0.13
• Platinum, $800.60 Down $5.70
• Palladium, $986.40 Down $1.30

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