Silver Price Dropped, Now What?

Last week (20th Feb), silver price has a drastic drop of almost $1 within 6 hours:

In the past 30 days, silver price felt from $32 to $28.

Take a look at the longer term for silver chart from September 2012 to February 2013, we can observe the following:

Lower High

This chart shows a lower high pattern. Lower high means each of following high is lower than the previous high. High 1 peak is about $35, High 2 peak is about $34.40, High 3 peak is $32.25. In other words, High 3 is lower than High 2, and High 2 is lower than High 1. Let me repeat this, a lower high pattern where each of the following High is lower than the previous High.

Lower high is a pattern that signals market is losing strength. Does it mean silver price will continue falling? I can’t be sure as market tends to always surprise us. I won’t call the current price as a rock bottom price but it certainly is a good buying opportunity. Remember, in order to sell high, you need to buy low; unfortunately most people are afraid at that point that price might drop even further.

Throughout the last 10 years, there are many good buying opportunities. If you missed out the previous opportunity, you might not want to miss out this time. Remember my previous  question on when is the best time to plant a tree? The first best answer is 10 years ago. The second best answer is now!

If you are wondering whether you should cut lost now, I will share with you a simple guideline when to continue holding to an investment and when to consider let go. The solution is to refer back what were the fundamental factors that made silver a great investment. If the fundamentals have not change, keep holding. Remember, an arrow can only shoot forward by pulling backward first.

When comes to investing silver, you have to mentally overcome your own emotions, step back and look at the fundamentals silver. The world has limited supply of silver, rising costs of mining, growing investment demand and industrial demand, and an active currency war where the winner is the central bank with their paper money (fiat currencies).

Since about 75% of new silver supply came from mining, it is important to keep an eye on the mining cost. In Mid 2012, Pan American Silver (PAAS) claimed mining cost for silver is $13.87 per ounce. Many experts think the number is totally illogical and the actual mining cost for silver is $26.54. This would make perfect sense as why silver price has been strongly supported at $26 since 2011 until 2013 because that is exactly where the mining cost is. It cannot go lower than!

Strong Support

Is the price currently going to $26? If it reaches there can it be supported at $26? Most importantly, when is the best time to buy?

In Malaysia Silver Investor Membership, I showed a simple yet effective formula to the members on when is a good time to buy and sell silver. At the point of writing this ($28.76), the indicator shows it is a good time to buy some silver. You could wait till silver price touches $26 (the very strong support), but if silver price doesn’t go there and re-bounce to $30 range, you might have just missed a good buying opportunity. In silver investment, you would rather be 1 year too early and not 1 day too late!

On 20th Feb 2013, Eric Sprott (silver expert and billionaire fund manager) said he still believes silver is the investment of the decade. Eric stated silver should be $100 today, and he expects silver to massively outperform gold. He conservatively expects the metal to reach $200/oz, however $200 is not be considered as the top. He said, “When you trade 1 year’s silver production in a day- matter of fact I think we traded one year’s worth of gold production yesterday, which is absolutely ridiculous!“. All we know is that the price should be up massively, he added.

Practical Guide For Investing Silver In Malaysia (3rd Edition) is updated with latest information for silver investment. NEW chapters are added to provide quality content to readers. You will also receive FREE Special Report: Maybank Silver Investment Account

Apocalypse Revisited: Silver Market Update

by Joshua Enomoto, Founder of ContangoDown.com and FutureMoneyTrends.com contributor

With spot-silver down below the all-important $30 mark again, many market participants are understandably frustrated: if the fundamentals are so bullish, like so many experts and gurus emphasize, then why the %&$# are the precious metals taking a beating!? Usually, the answer proposed by the alternative investment community is “manipulation by the Rothschild cabal” or “irrational market behavior.” While I am neither a conspiracy theorist nor a psychologist, I will offer three points:

  1. There are irregularities in the silver sector
  2. Similar irregularities have occurred in the past
  3. The long-term market (+8 months) is more bullish than bearish

First, let’s acknowledge the irregularities in silver by examining its derivative market, popularly known as the “options chain” of iShares Silver Trust, or SLV. Options are contracts that give the owner the right, but not the obligation, to purchase (call option) or to sell (put option) an underlying market entity at a specific price within a specified period of time (Murphy, John J ; author of Technical Analysis of the Financial Markets). Options in and of themselves have no intrinsic value but rather derive value from an underlying asset, hence the name “derivative.” In most cases, the options fluctuate in value according to the market action of the underlying asset, but options are traded within its own market sector. Both fundamental and technical analysts examine the put/call ratio (which is a ratio of put volume divided by call volume) to determine market sentiment. A high put/call ratio suggests bearish sentiment, as volume is more heavily focused on the trading of puts (where the owner of the put makes profits from an underlying asset moving downwards in price). However, an excessively high put/call ratio can often be used as a contrarian indicator, where market sentiment has gone too bearish and that a bullish reversal is likely.

For the chart below, I have plotted the put/call ratio for SLV options with expiration dates in March through January (2014). Within the same chart, a similar ratio was plotted for open interest, or options that are not closed or delivered within a particular trading session.

As expected, March options are indicating bearish sentiment, as the put/call ratio is 1.3, meaning there are 1.3x as many puts traded as there are calls. In the near-term, it is very possible to see silver challenge horizontal support at $28 and even $26. However, we also have to keep in mind that overall, the put/call ratio is about 0.5 or less, meaning that call volume is usually twice as much as put volume in future contract months.

The one glaring exception is options that expire in October 2013. Here, the put/call ratio is 2.42, dwarfing the ratios registered in other contract months. This is a major irregularity in the silver market as bearish open interest does not rise in accordance with the volume. Specifically, what is causing the ratio rise is put options with a strike price of $26 (which equates to roughly $27 in the spot-market), where volume is 3,019, over 5 times higher than the next most dense put. In fact, the volume exceeds open interest by over 270%, suggesting massive activity. As it is highly unusual for volume to exceed open interest, especially by such a large margin, an investor can reasonably speculate that the October options activity is a contrarian indicator.

For a look at how a “normal” options market operates, let’s consider Carnival Cruise Line, or ticker symbol CCL:

To no one’s surprise given the recent black-eye that Carnival gave to the cruise line industry, bearish activity increased for March options. This is evidenced by both a high put-to-call ratio, as well as a high open interest for puts relative to calls. However, both the volume and the open interest ratios decline the further out the contract months are spread, confirming the normalcy bias of stock market psychology: over time, stocks tend to increase in value. Also, despite the current bearishness, CCL is in a comparatively healthy industry. It is very difficult to beat the “fun per dollar” basis that the cruise industry offers, and therefore, the above chart is indicative of short-term setbacks but long-term growth.

Unlike CCL, silver bullion’s price actions at times betray its fundamentals and this discrepancy is most noticeable when analyzing palladium. As an element, palladium is imbued with unique properties that make it indispensable for operating our sophisticated society. In fact, developments in advanced sectors such as fuel cell technology would be impossible without this element. This makes it similar to silver in that many of our technologies that we take for granted would not come to fruition were it not for precious metals. The key difference, though, is palladium’s usage is centered on industrial or commercial demand, with a majority share allocated towards the automotive sector as a critical component of catalytic converters. Investment demand, while not unheard of, is currently nowhere near the popularity of gold and silver bullion.

This has the advantage of making palladium’s market action easier to predict: as the automotive industry goes, so goes palladium. Most of the time, there is a strong correlation between spot-palladium and the Dow Jones Transportation Average; therefore, with the transportation index hitting all-time highs, it’s no wonder that palladium is the least affected in the recent downturn of the precious metals sector. However, silver also plays an important part in the automotive sector, with 36 million ounces appropriated for this industry. While that only represents 4 ~ 5% of annual mining production, your car simply wouldn’t function without silver. Also, with investment demand heavily leaning towards bullishness, as evidenced by the SLV options chain, spot-silver should be moving up, or at the very least, sideways.

So what gives? To provide a possible answer, let’s consider the 3-year daily chart of the Dow Jones Transportation Average interposed with the price action of spot-palladium and spot-silver:

While the connection is rarely (if ever) made, there is a recognizable measure of correlation amongst silver, palladium, and the Dow Transportation index. The two precious metals are even more tightly correlated, with one notable exception: there are times when palladium rose and shared an inverse relationship towards silver, as occurred in April 2010 and January 2011. Both times, silver dramatically increased and it remains to be seen whether it will do so again. Palladium is currently trading at $754/oz, roughly 5% above its one-year high. Silver is trading at $29.80, 20% below its one-year high.

Personally, I believe that silver will rise from its current price point but that it is unlikely that we will see a new nominal record being set within the first half of this year. In the immediate time frame, we have to acknowledge the rise of bearish volume in the options market and that could create some “funny business” for the next few weeks. However, whether we are looking at derivatives or the real deal, the overriding sentiment is bullish; therefore, I don’t think this is the time to dump the metals.

Also, I would not want to initiate puts and hope for prices to fall to $19/oz as the derivatives market is not bearish enough for an investor to feel confident that his” hopes in reverse” will pan out favorably. While the Commitment of Traders report suggest that commercial shorts are steadily increasing, so are commercial and non-commercial long positions, and quite dramatically at that.

Clearly, smart money and the insiders are moving into the silver market, and not all of that volume is on the short-side. Therefore, consider the current dynamics in context before making rash decisions in the precious metals sector.

When Is The Best Time To Plant A Tree

When is the best time to plant a tree?

The 1st best answer is 10 years ago. The 2nd best answer would be NOW! If you have invested in silver 10 years ago, you would have bought silver below $5 and you could sell your silver now for about $30. That is almost 600% increase in value in 10 years! If you did not buy any silver 10 years ago, now probably is the 2nd best time to buy some silver.

Interesting, there are so little people know about the value of silver. Last week, I showed a video to test how much people know about gold price, this week, the video is to show how little people know about silver price. Although silver price is traded for around USD30, most people would NOT even buy it for 1 dollar. When come to investing, many people don’t make money simply because they don’t truly understand buy low, sell high. They might have heard of the terms, but they never truly understand and practice “buy low, sell high”. Well, the reality is, when they don’t even know the true value of something, how could they buy low and sell high?

This video is the best example:

2 precious metal gurus – David Morgan and Mike Maloney are discussing silver in their car. They discussed the role of gold and silver. If gold suddenly disappeared from the world, nothing is going to change. Everything will still be the same because gold has very little industrial application. However, if our modern life do not have silver, no modern technology would ever exist and we will be living in stone age!

For the first time, if we take all the gold and silver available in the world, there are 5 times more gold than silver for investment. Investment grade gold & silver are those that have at least 99.9% purity. There are about 3-5 billion oz of gold available for investment but there are only 1 billion oz of silver available for investment.

Below are one of the conversations we have in Malaysia Silver Investor Membership. One of the member asked me some questions which I think it could benefit more people if I post it in this blog. For privacy concern, I have blurred the name of the members.

Member

In the membership platform, we have members coming from different level of investment experience. Not only myself ready to answer any question raise by members, many other experienced members are also generously sharing information, advice, and news updates to the rest of the members.

I have written Practical Guide For Investing Silver In Malaysiaan eBook specifically written for Malaysian in silver investment. You will learn different silver investment strategies and I will show you how to invest silver below market price! Click here to find out more.

Gold Price

One of the members in Malaysia Silver Investor Membership has shared the following video (with the rest of the members) to show how ignorant people are on gold price.

We can’t entirely blame the people how ignorant they are on gold, because for the past 42 years, we are living in a world that uses fiat currency (paper money) for daily transaction.  In 1971, Richard Nixon, the president of United State back then took US Dollar off the gold standard. Before 1971, each Dollar is backed by certain amount of gold. After 1971, the  Dollar is just paper as the Dollar is no longer backed by gold. Since every country currencies  (including Ringgit Malaysia) is backed by US Dollar as reserve currency, from that point onward all the “money” in the world has become paper currency that the central government can print anytime and any quantity they like. While we as middle class are working hard everyday for that? How ironic?!

Most of us in this generation are brainwashed to believe that the paper currency printed by government (which is just some paper not backed by any gold) is actually money. We never have a proper / official education on the value of gold. Most of us buy gold for cultural reasons. It is just a wisdom passed from the previous generations. We never question or fully understand the fundamental of precious metals (gold & silver). This is exactly the reason why I started this silver blog to share more information on silver.

If there are so little people understand gold, there are even less people understand silver.

The potential for silver is extremely positive. Last 2 months, silver coins were sold out in US Mint for twice! Canadian Mint faced the similar shortage problem. Silver, apart from being a monetary metal, it is also one of the most highly sought after industrial metal that being used up in large quantity. China being the 3rd largest silver producer in the world still does not have enough silver and they have to import more from other countries.

10 Years Silver Chart

According to Christenson from Deviant Investor, the highs in 2004, 2006, 2008, and 2011 were at or above that trend line. A price of $15 in 2006 was just as extreme as a nearly $50 price in 2011 and a possible $100 price within the next two years. The ten year chart of silver prices is plotted on a logarithmic scale and shows a highly volatile exponential increase in prices over that ten year period. The higher trend line extends to approximately $100 by the end of 2013. Prediction – Certainly Not! Possibility – Yes!

If you are interested to find out more about silver, I highly recommend you to read the following book.

I have written Practical Guide For Investing Silver In Malaysiaan eBook specifically written for Malaysian in silver investment. You will learn different silver investment strategies and I will show you how to invest silver below market price! Click here to find out more.

No Debt, No Problem?

Last year (May 2012) when I published my 2nd Edition eBook Practical Guide For Investing Silver In Malaysia, I discussed that US is going to hit the debt ceiling of 16.4 trillion Dollar latest by early 2013. This does not require us to be a professionally-trained economist to recognize, anyone who spend a little time to learn the fundamental of economy could would predicted it.

Debt ceiling for a nation is like a credit card limit for an individual.

maybank credit cardTake example I am an employee who has a credit card with limit of RM20k. When I spend on my credit card and hit my credit limit, I have to pay it off. If I don’t, the bank is going to punish me by giving me a bad record and I will have problem getting a new loan in the future. What I do now is I ask for a bigger credit limit of RM30k, RM50k, RM100k, RM200k and RM500k. Since I have not hit my credit limit, I could continue spending.

This time, when I hit my credit limit I’m NOT going to ask for a bigger credit limit. I found a new trick, I say “temporarily ignore” the credit card limit. By “ignoring” my credit card limit, the bank cannot come after me and I’m now free from financial trouble.

Does it make any sense to you? No!

The exact same non-sense is happening to US economy. On 28 January 2013, US has “temporarily suspend” the debt ceiling. In other words, US has hit the debt ceiling of 16.4 trillion Dollar and they make it official that they are going to ignore the debt ceiling for now. What a convenient excuse! I wonder if you could tell your bank to “temporary ignore” your car loan installment and your house loan installment? :)

history

A wise man once told me, if you want to predict the future, look at the history. Very similar event has happened in US history. In 1971, President Richard Nixon has “temporary” taken the dollar off the gold standard. Before 1971, each US Dollar is backed by certain amount of gold. Today, every Dollar (or Ringgit) that we are holding is not backed by any gold, they are just paper. The “temporary” has lasted for 42 years until today.

Right now, US could continue spending and getting deeper into debt without any ceiling. Thanks to Quantitative Easing (QE3 and QE4) that happened in the last 6 months, US is printing 85 billion Dollar every month – without a definite date to stop printing. The market is flooded with worthless paper currencies. When US prints, the whole world follows to print. Bank of Japan has also announced their version of QE, they are printing indefinitely starting from 2014. This is the formula for guaranteed hyperinflation.

You might or might not have heard about hyperinflation. If you think 5% inflation is bad, this is what happened to the value of German “money” during 1920s. This is the kind of hyperinflation we are expecting in the near future.

German Mark

With such disastrous monetary policy on our way, a financial logical reaction is to allocate your wealth into precious metal. Precious metal (gold and silver) has been a form of money for many thousands of years. Human use precious metal as money long before the invention of paper money. If you think the society has modernly evolved and no longer need precious metal, consider this:

In late January 2013, HSBC Bought $876 Million Worth of Silver. Silver coins was sold out in US Mint – not once, but twice recently. A new historical sales record of 7.5 million oz American Silver Eagle coin sold in a single month just happened in January 2013, created the highest monthly sales in history.

Many smart investors have started allocating their money into precious metal, particularly silver. Today, silver remain as an affordable option in precious metal. When 1 oz gold (31.1gram) costs about RM5300, 1 oz of silver costs only slightly above RM110. Gold is the money of king, silver is the money of people and debt is the money of slaves. If you have tonnes of cash piling your garden, please go ahead buy some gold. But if you are like most people, I highly recommend you allocate some of your wealth into silver. Silver is not only a form of precious metal (that protects your wealth during financial crisis), but also a highly demanded industrial metal. Keeping a couple of silver coins is never a bad idea.

I’ve written the eBook Practical Guide For Investing Silver In Malaysia. This eBook will show you how you can invest silver in a smarter way in Malaysia. In fact, I also shared my short term, medium term and long term exit strategy. Click here to find out more.

Highest Silver Sales in History

American Silver Eagle coin has just made a new history for the monthly sales. The total sales so far (30 Jan 2012) has reached 7.42 million oz in a single month! It has broken the previous highest monthly sales record of 6.4 million oz in January 2011.

American Silver Eagle 2013

In case you don’t know what happened to American Silver Eagle (ASE), here’s a quick summary:

  1. On 17th December 2012, US Mint informed authorized purchasers that ASE 2012 had sold out and no additional ASE 2012 would be struck. The new coin ASE 2013 is only available for order on 7th January 2013 onward.
  2. On 7th January 2013, US Mint announced 3.937 million Silver Eagles were sold in a single day. This is the highest sale in the single day history!
  3. On 8th January 2013, US Mint sold another 300,000 oz of physical Silver Eagle coins. It is expected January 2013 would hit the highest sale per month in the history.
  4. On 17 January 2013, United States Mint is sold out for 2013 American Eagle Silver coins. As a result, sales are suspended until they can build up their silver inventory.  Sales will resume on or about the week of 28th January 2013.
  5. The week of 28th January 2013, all the authorized dealers are queuing for another massive round of Silver Eagle coin order. By 29th, another 1.5 million oz were sold.
  6. On 30th January 2013, US Mint sold total of 7.42 million oz, breaking the all time high monthly sales of 6.4 million oz in January 2011. It is expected total sales for January 2013 be MORE than 8 million oz!

Not only all silver investors / collector around the world love American Silver Eagle, this coin is also one of the best choices for silver investors in Malaysia due to its relatively low premium (compared to other coins) and high liquidity in Malaysia silver market. Liquidity here refers to easy to sell and buy in local silver market. Also not to mention the design of this coin is very beautiful and the details are very fine. Find out more about the review I wrote about American Silver Eagle here specifically for Malaysia silver market.

Mining production data shows that for every 1 oz of gold is mined, there are only another 10 oz silver being mined. However during this period, US Mint has reported that silver sales (demand) is 53 times more compared to gold sales.

If silver continue being bought up at this rate, don’t be surprised that one day you might NOT be able to buy anymore physical silver coin. So the question is, what are you waiting for?

GoldSilver Insider Update from Mike Maloney (Jan 2013)

After US Mint sold out their silver coins (American Silver Eagle) – for twice, Canadian Mint now controlling their available remaining silver very carefully. Alex Reeves (Senior Manager of Communications for Royal Canadian Mint) said, “Due to very high demand for Silver Maple Leaf bullion coins, the Royal Canadian Mint is carefully managing supply to ensure all our bullion distributors are served and we continue to take orders.” This situation proves one thing: the physical supply for silver is extremely tight. It is not easy for many manufacturers to source for physical silver for production. This including Apple could not  produce sufficient of 27 inch new iMac. Click here for previous post.

This is the latest update from Mike Maloney in Gold Silver Insider Program. Mike Maloney is one of the most respected persons in precious metal industry. He studied economy history, understands current economy mess and he has been actively raising global awareness about the role of gold and silver under current troubled economy. Most importantly, Mike realizes the strong fundamental of silver and the potential. He personally invested 90% of his cash into silver.

In Malaysia, many precious metal investors would like to join Mike’s Insider Program for the great information. You can become a member by purchasing 500oz of silver, 10oz of gold, or purchase the membership program outright from GoldSilver.com. The membership program costs USD1,659.10, which is equivalent to RM5,143.21.

Insider Program

First option, 500 oz silver – the silver that offered by GoldSilver.com falls into the category of what I call “less attractive”. There are 2 main categories: coins (legal tender) and large-size silver bars. Buying coins from overseas is an unwise move choice for most retail investors in Malaysia because 15% tax to be paid at Kastam Diraja Malaysia. In other words, you are buying silver 15% more expensive than others. If you can get 15% cheaper from local dealers, why pay 15% extra? The local dealers have their “tricks” to bring their cost lower but we will leave that discussion for another day. Another category is large-size silver like 10oz and 100oz. Large-size silver has lower premium, is value-for-money investment and there is no tax. However the liquidity is relatively low in Malaysia. 10 pieces of 1 oz silver can be sold of much easier compared to 1 piece of 10 oz silver. Imagine this, any middle class working person can afford to start investing in 1 oz of silver for slightly above RM100. But for 10 oz bar that cost more than RM1,000, I’m afraid not too much people can afford. Let alone buy the 100 oz.

Second option,10 oz of gold – due to gold silver ratio is ~50, GoldSilver.com makes the criteria (amount) for getting into the Insider Program at 50 times lesser than silver, which is 10 oz of gold. Gold silver ratio can be calculated by simply dividing gold price with silver price. For example, if today gold price is USD1660.30 while silver price is USD31.28, hence gold silver ratio is 53 (1660.30 / 31.28). Most people buy gold for cultural reasons. For example during Chinese and Indian wedding, people buy jewelry like gold necklace, gold ring and other gold jewelry. For some well-doing Chinese families, new born baby is given gold jewelry too. On the other hand, government central banks keep gold and they hoard gold as an hedge against the decline of USD. While gold is mainly  being hoarded, silver is an industrial metal that being consumed. Do recognize that when the silver is used up, it is gone forever. I have nothing against buying gold, but many facts clearly shown us silver has much greater potential compared to gold, hence allocating more than RM55k to purchase gold (so that the person can get into the insider program) might not be a great plan unless the person has already allocated RM500k for silver.

Third option, purchase the program outright for USD1,659.10, or RM5,143.21. While the information in GoldSilver Insider Program remains great, paying RM5,143.21 for a membership program might not be affordable for many people. In fact the high entrance fee potentially push the genuine learners with low capital away. I always find this ironic, some young and low budget investors usually have limited amount of capital to invest. If the gurus are asking for high cost to get the information, where else would such young and low budget investor find money to invest??

In order to solve this problem, I have written an eBook titled: Practical Guide For Investing Silver In Malaysia that will show you exactly how to invest in silver from your 1st oz until your 1000 oz. The eBook will show you what are the safe methods to invest silver in Malaysia. Where to look for investment-grade silver with lowest price. Mistakes to watch out when investing silver and a lot more tips and tricks for investing silver in Malaysia. In fact you can also join Malaysia Silver Investor Membership for a much affordable fee.

A famous says “If you think education is expensive, try ignorance“. Making a financial mistake is never a fun experience. The eBook contains 100+ pages of great information and 2 bonus reports to guide you step by step investing silver. Click here to find out more.

Silver Shortage

I have been yelling about silver shortage in my blog. Even in my recent radio interview with BFM (89.9) I could not stop emphasizing how industry has been using up physical silver and when silver is used up, it is gone forever. Apparently the reality of silver shortage is not too far away from us.

American Silver Eagle

American Silver Eagle Sold Out

American Silver Eagle (ASE) has always been my personal favourite coin. It is a very beautiful coin selling at low premium. I could get it easily anytime I want but I’m afraid things have started to change…

  1. On 17th December 2012, US Mint informed authorized purchasers that ASE 2012 had sold out and no additional ASE 2012 would be struck. The new coin ASE 2013 is only available for order on 7th January 2013 onward.
  2. On 7th January 2013, US Mint announced 3.937 million Silver Eagles were sold in a single day. This is the highest sale in the single day history!
  3. On 8th January 2013, US Mint sold another 300,000 oz of physical Silver Eagle coins. It is expected that January 2013 would hit the highest sale per month in the history.
  4. On 17 January 2013, United States Mint is sold out for 2013 American Eagle Silver coins. As a result, sales are suspended until they can build up their silver inventory.  Sales will resume on or about the week of 28th January 2013.
  5. The week of 28th January 2013,  all the authorized dealers are queuing for another massive round of Silver Eagle coin order!

Apple iMac Delay

imac

Apple announced the new iMacs on 23rd October 2012. The new model uses a lot more silver on the new Iris screen (which is much brighter) compared to the older models. In January 2013, Apple could not supply enough of this model.

“There is simply not enough silver available to produce them”, Bally A. said. The brighter screens require substantially more silver than the earlier models. That is also why there was a $100 price increase on most models of the iMac, he added.

A 3-month delay after the announcement has never happened before in Apple history! No business will ever tell the public what exactly went wrong within the business. Apple only addressed this as “production problems“. Well, common sense, it does not take 3 months to handle any “production problems“. If a problem continues for 3 months, it is very likely to be an external factor that is out of Apple’s control. Silver shortage fits perfectly into such “production problems“.

Do you know what is more interesting?

Apple manufactures their iMacs and iPads in China. China being the 3rd largest silver producer in the world yet, China does NOT have enough silver and have to import more silver from other countries!

(You can check out more about China Silver Market here.)

SLV Purchased 572 Tons of Silver

iShares Silver Trust (SLV)

On 17th January 2012, there is an unconfirmed report that SLV purchased 572 tons of silver. SLV is silver exchange-traded fund (ETF) in the US. It is also the largest silver ETF in the world. In layman term, it is called Paper Silver. Similar like Maybank Silver Investment Account, you can never demand delivery and you can never get your physical silver. You just have to assume they have all the silver they claim to have sold you.

SLV claimed they have bought 572 tons of silver. What is happening here? Two scenarios:

  1. They claimed they have bought 572 tons of silver so that they can sell more paper silver to the market. Why do they want to do that? Are they are expecting a huge increase in silver price soon?
  2. Let’s assume SLV did purchase 572 tons of physical silver, that means the world has 572 tons less physical silver for average investors like you and me to purchase. Economics 101, the lesser supply of silver, the higher silver price will rise!

I intentionally discuss both physical silver and paper silver. The reason is I want you to see the difference. When Silver Eagle coins are sold out by US Mint and when Apple needs physical silver to make iMacs, what is the point of holding paper silver that the private organization can print out anytime they like? Give the paper silver to Apple to get them start manufacturing? Give the paper silver to US Mint to get them start minting more coins? Whether or not the physical silver shortage has started, we will soon find out from the market.

I have personally bought enough physical silver. I have started buying silver since 2010. Today, I continue buying silver every month or whenever I have spare cash. I pay close attention to Malaysia silver market so that I can grab undervalue deal whenever it comes. Thanks to all the research I have done and the personal experience I have, I can tell which silver is suitable for investment or not. I know Malaysia silver market well enough to have helped many Malaysians started their silver investment journey. You see, keeping the information to my own advantage is selfish. That’s why I have written the eBook Practical Guide For Investing Silver In Malaysia to share with Malaysians.

In the eBook I’m going to guide you step by step and you are going to learn how to buy your 1st oz of silver. If you are a big boy and want to invest 1000 oz, I will show you how to buy from the cheapest source. Click here for the A-Z guide in Malaysia silver investment.