PMBull.com

What are silver experts predicting for the price of silver in 2013? PMBull presents two video interviews with silver experts Eric Sprott and David Morgan. In the first video, Eric Sprott provides a long-term forecast for silver relative to gold. In the second video, David Morgan provides his thoughts on the likely path for silver prices in 2013. PMBull comments, unless directly quoted, represent PMBull’s assessment of the thoughts expressed in the interviews and should not be ascribed to the video, interviewer or interviewee. These predictions are merely a snapshot at the time these videos were produced and it is entirely possible that both gurus have further amended their forecasts.

Eric Sprott Predicts Silver to Outpace Gold in the Decade Ahead

In this compelling interview from December with Lauren Lyster of Capital Account, Eric Sprott, Founder and CEO of Sprott Asset Management discusses the prospects for Silver in the decade ahead and outlines some specific data that suggests silver may indeed be a better investment than gold.

Eric suggests that silver will ultimately trade down to a 16:1 ratio vs. gold and details what this would mean for prices. He concludes that gold was the investment of the last decade, but silver will be the investment of the next decade. For more from Eric Sprott see Why Are Investors Buying 50 Times More Physical Silver than Gold on ZeroHedge.

Continue Reading …

For the second time in 30 days, evidence of a silver shortage is presenting itself. Back in December, we questioned whether there would be a shortage of Silver Eagles when the U.S. Mint sold out of its 2012 coins and informed authorized purchasers that there would be no more production or delivery.

Well, it appears that brisk sales of 2013 Silver Eagles has resulted in the exact same thing for the 2013 coins. At the time of the 2012 notice, dealers began taking pre-orders for 2013 coins, with notice that delivery would begin around January 20th of this year. A shortage for new 2012 Eagles resulted in some dealers lifting premiums and others directing buyers directly to their 2013 Eagle pre-order pages.

Authorized purchasers have been informed that the mint will not be able to deliver additional 2013 coins until around January 28th. We would indeed define this as a developing shortage. The simple fact is that demand for both 2012 and 2013 silver eagles have outpaced production twice now inside of 30 days. The U.S. Mint apparently can’t keep up with demand, which has been heavy. According to CoinUpdate.com:

“On the first day of availability for 2013-dated Silver Eagles, authorized purchasers had placed orders for 3,937,000 of the one ounce coins. This seemed to mark the highest one-day sales in the entire history of the program. The strong demand has continued with sales now having reached 6,007,000 according to the latest information posted on the Mint’s website.”

As the most popular silver bullion coin, a shortage in Eagles is going to eventually spill over into other forms of bullion. Premiums on Silver Eagles have already started going up. Bars and Rounds can’t be far behind, especially if we see investor demand pick up in the current precious metals rally.

This development, along with increasing Central Bank demand for its gold bullion from New York, is going to begin raising awareness as to how tight supply in the precious metals markets truly is, and we could at some point see physical silver and gold break away from paper prices in a dramatic fashion. Spot Silver has had a nice rally over the past few days and if delivery demand begins to increase, shorts are going to be in for a real pickle.

Physical is still available at online silver dealers, but premiums are drifting higher (and this is most evident in the Eagle right now). Unlike our note on the mint selling out of 2012 coins in December, we won’t assure those still needing to add to their stack that there is no need to panic. A lot of events are conspiring to suggest silver may soon launch higher. Right now, PMBull suggests looking at Canadian Maple Leafs, bars or rounds as an alternative during this temporary mint delay. They will get you more silver for your dollar.

Jan 17, 2013 Update: It is now being reported that the U.S. Mint has sold out of 2013 Silver Eagles.

If you are a silver investor trying to figure out whether you should buy 2012 or 2013 American Silver Eagles, PMBull has done a little research for you.

As noted last month, the U.S. Mint sold out of Silver Eagle coins in December and chose not to strike any additional coins for the year. This left authorized purchasers with no ability to replenish inventory until January 7th. As such, many dealers began to increase premiums on their 2012 dated Eagles and began taking pre-orders for the 2013 dated coins, with longer lead times on delivery. While 2012 coins are still available at many dealers, the premiums have risen, leaving investors with a dilemma. Pay more for the 2012 Eagles, or place an order for the lower priced 2013 bullion coins and wait for the extended delivery time?

PMBull lists pricing from two of the most competitive online Silver Eagle dealers in its physical silver bullion guide. Currently, JM Bullion offers both 2012 and 2013 dated Eagles. In late December until just the past few days, the 2012 Eagles were priced with a much higher premium, but the gap between the two appears to be narrowing. Meanwhile, GoldAndSilverOnline is offering 2012 Eagles at the time of this post, with an even lower price than JM Bullion, for smaller orders under 100 coins.

Don’t let a perceived shortage convince you that 2012 Eagles have a higher value. That perception is not likely to last as the coins enter the realm of prior year secondary market pricing. The spread in pricing between both years at JM Bullion is already dimininishing. Further, with record orders taking place for Eagles in the first month of this year, any shortage perception could very well extend to the 2013 coins!

The real advantage to a 2012 coin at this time is that you won’t have to wait an additional amount of time for delivery.

If you are going to sweat the nickels and dimes on your Eagle purchase, consider consulting our guide to buying physical silver bullion online for silver bars or rounds at a significantly lower premium than you will find on coins coming from the U.S. Mint. In the end, as a silver bullion investor, you are seeking the maximum amount of silver bullion for the lowest price, right?

……………………………………………..
Latest Update: Jan 17, 2013
Silver Shortage: Silver Eagles Sold Out at the U.S. Mint Again
For the second time in 30 days, evidence of a silver shortage is presenting itself. Back in December, we questioned whether there would be a shortage of Silver Eagles when the U.S. Mint sold out of its 2012 coins and informed authorized purchasers that there would be no more production or delivery. More…
……………………………………………..

12/18/2012 – Is there a shortage in Silver Eagles on the horizon? The U.S. Mint has sold out of its supply of Silver Eagle bullion coins and will not be striking any more 2012 dated coins. With inventories depleted, authorized purchasers, those to whom the U.S. Mint supplies bullion coins, will be unable to obtain new coins until January 7th, 2013. Read more at CoinUpdate.com

The Silver Eagle is the U.S. Mint’s most popular bullion coin and after a lackluster showing relative to last year for several months, demand began to increase in October, with sales remaining strong through November. Sales of Silver Eagles in November were more than double that of Eagle sales in November, 2011. Silver Eagle sales year to date are over 33,000,000.

Bix Weir at RoadtoRoota suggested that the U.S. Mint has actually been in violation of the law by not striking more coins when this has occurred in the past, because the law states that the Mint is to produce “quantities sufficient to meet public demand.” This may be a bit of a stretch, since coins are available through many dealers and we have never really seen a major shortage where public demand for popular bullion coins could not be met.

Nevertheless, it is interesting to note that Congress changed the law last year to state that production levels were to be left to the discretion of the Treasury Secretary. From RoadToRoota: “So there it is….we have to rely on the Treasury Secretary’s JUDGEMENT on whether or not there are enough Silver Eagle coins being Minted to ‘sufficiently’ meet supply.”

If those in charge truly wish to suppress the price of silver, as the manipulation camp suggests, why would Secretary Geitner allow a supply shortage to surface? Wouldn’t this send the price of silver higher and achieve the opposite of the intended effect? One might argue “not necessarily.” After all, allowing a shortage of coins and a higher coin price could very well have nothing to do with the “manipulated” paper price. The manipulated paper price can be taken down to zero, while the bullion coins skyrocket. However, if the U.S. Mint is not striking more coins, no buyer can take advantage of the lower paper price vis a vis the bullion coins. Dealers can always charge more in the secondary market, but paper silver can remain low.

Currently, you can still buy Silver Eagles online from quality dealers, so there is no need to panic at the moment. In fact, on the heels of this news, spot silver prices have taken a a 2% hit today. Nevertheless, should we see a meaningful reversal in the current sell-off today, one wonders if demand could spike sufficiently to leave dealers high and dry. Could that be the event that separates physical from paper and sends the physical silver bullion market higher?

If you are looking for Silver Eagles, check out PMBull’s guide to Buying Physical Silver for a description of silver bars, coins and rounds, as well as tips on where to buy silver for the best possible price.