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Fast-Moving Precious Metals Markets
Higher Premiums and Lead Times in the Retail Market, Especially on Silver...
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Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.
Welcome to this week's market wrap podcast, I'm Mike Gleason.
So is the bottom in? Well, precious metals bulls made a case this week, pushing gold and silver prices up off their most deeply oversold levels in years.
Gold led the way, rallying 4.3% for the week through Thursday's close. As of this broadcast on Friday morning, gold has added another couple of bucks since yesterday and currently trades at $1,472 per ounce.
Silver stayed quiet until Thursday, when it jumped 5.4% to break out of a 7-day sideways consolidation. Silver currently trades at $24.30 per ounce.
We'll be keeping an eye on the $26 level for silver and $1,550 for gold. Those were the major support levels that got broken on April 12th, resulting in a barrage of technical selling. These former support levels could act as resistance on the way back up. In other words, the rally could stall at those levels, at least on the first attempt by the bulls to push through them. But once prices do break decisively above $1,550 for gold and $26 for silver that will be confirmation that a rally has legs.
We already have plenty of confirmation in the retail bullion market that one heck of a rally is taking place in physical demand for gold and silver. By the time the month is over, April 2013 will be one for the record books in the retail market. We're seeing record national sales volume for Silver Eagles and shortages across a wide array for silver bullion products.
The demand surge is showing up in the gold coin market as well. This week, the U.S. Mint announced that it is suspending sales of its tenth ounce American Eagle gold coins because it can't keep up with demand, and in part because it probably needs extra bandwidth to produce the more popular one ounce products. The Mint said that sales of these fractional coins are up 118% compared to this time last year. This marks the first time since November 2009 that the Mint has failed to supply the market with a gold coin product.
A lack of availability translates, of course, into rising premiums. Money Metals Exchange does offer a lower-premium alternative: our exclusive privately minted fractional gold round. Our Lady Liberty gold coin is composed of 24 karat, .9999 (four nines) pure gold. American Eagles, by contrast, contain 22 karat, or 91.67% gold.
Due to the recent surge in order volume on all bullion products, customers should expect longer than usual lead-times for order fulfillment. The supply shortage and increasing premiums have been the big story in the bullion market this month, and it's beginning to approach the extreme situation we saw during late 2008 when lead-times routinely got out as far as 3 months at many dealers. Money Metals Exchange isn't comfortable with asking our customers to accept long lead times like that, so we prefer only to sell items where we have good inventory levels.
At this point some products are still not available, although we have now resumed taking orders for our popular 1-ounce silver rounds. But there will be a lead-time on delivery while our mint works through a big backlog of orders.
We also resumed taking orders of Silver Eagles and Silver Maple Leafs this week, however given the small allocations all dealers are getting from the government mints, the premiums are really elevated, and they've definitely gotten pricey. As a better alternative, we've continued to offer the beautiful Austrian Philharmonic silver coins. So investors insisting on government-issue 1-oz silver products can save more than a dollar an ounce and get quicker delivery on the Philharmonics, at least while the supply lasts.
This unique situation in the silver market has meant that some precious metals dealers are taking advantage of the extreme tightness in product availability to promote their high-premium products. Others are taking orders for items that they don't have and may not get for weeks or months. Rest assured that when you order through ILB, we'll work to help you obtain the lowest-premium bullion products in your price and size range. And we won't sell you anything that we can't fulfill in a reasonable period of time.
Even though the activity has leveled out a little bit from the frenetic pace of buying we experienced a week or two ago, ILB, along with most dealers throughout the country is dealing with constricted supplies on most popular bullion products. But we are still able to fulfill most orders within 2 weeks – usually sooner. Now our newly re-designed website gives updates on what products we're selling and what type of lead-time you can expect on the various items. It also gives you the ability to place an order right there through our secure shopping cart. Check it out at www.MoneyMetals.com. Whether or not you choose to order online, we are always happy to speak with you by phone. Just call 1-800-800-1865.
Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most value for your depreciating dollar… with speed, with accuracy, and with top notch service. Have a great weekend everybody.
Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at www.MoneyMetals.com or call 1-800-800-1865.