Wednesday, May 29, 2013

Paper vs Physical Gold Article in Forbes.com with historical wholesale silver premuims to melt

This link is to a short article by Addison Wiggin about paper and physical gold.  It quotes Eric Sprott and John Embry who have been writing about the precious metal markets pyramid schemes for many years.
http://www.forbes.com/sites/greatspeculations/2013/05/28/somebody-is-messing-with-the-gold-market/

This article is significant for two reasons:
1. It is published in Forbes.com that, presumably has a very broad readership.  
2. A chart of wholesale 90% US silver coin premiums to melt value from 1998 to today is included.

The source for the silver premiums is noted on the chart as "CoinExpert.com".  I searched the CoinExpert.com site http://coinexpert.com/US%2090%20PREMIUM.htm and found a chart of the premiums from 1998 to 2010.  The source of this data is not clear.  Perhaps the CoinExpert tracks it independently.  Data like this would be very insightful if it was clear exactly what the data represents and how it is collected.

According to the chart, current wholesale US silver coin premiums are almost 20%, which is very high and has happened only three times since 1998. The previous occurrence of 20%+ premiums was at the end of 2008.  During 2008 the market price of silver rose above $20/ounce and then dropped to almost $10/ounce.  After bottoming out at about $10, silver prices went on a tear to about $50/ounce over the following 2.5 years.  Perhaps today's high premiums portend similar silver price gains in the coming months.

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