The physical gold market vs. phoney gold markets

The phoney silver and gold markets, e.g., the London and New York exchanges, trade in multiples of paper in relationship the actual available physical metal.  Today, a call to my local coin dealer shows that the market price is far too low.  The Canadian PMX expects to have one ounce physical coins including silver American Eagles, Silver Rounds, Maple Leafs, Philharmonics, and bars; and 1 oz gold Maple Leafs, bars, and Philharmonics only by the middle of January.  This means:  (1) the mints can’t keep up with the investor demand because the current market price is too low; (2) no one who actually already owns physical species of precious metals in the Toronto area are bringing their coins to Canadian PMX to redeem them at these pathetically low market prices.  Thus, those with physical metal know that they are holding value, while the current paper market in which traders pass back and forth many multiples of paper metal with little physical backing is an absolute farce.

I remember those who came from manipulated markets in the Soviet bloc countries during the cold war had severe supply demands.  I heard a testimony once that people would stand in line at markets for a long time, not even knowing what was for sale.  When you final came to the front of the line, they might be selling left shoes size ten, and you would buy them, as many as you could, because you never knew when you might have another chance to buy something.

Currently, the physical market is very tight. If buyers have a chance to put their hands on physical metal, they should.  You never know the next time you’ll have a chance.

Disclosure:  I currently have positions in Sprott Physical Gold Trust and Sprott Physical Silver Trust.

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