American Silver Eagle Out of Stock Again?!

Last Wednesday (5th Nov 2014), the U.S. Mint announced they are temporarily out of stock for the world famous coin American Eagle. This is primarily due to low spot price for silver and tremendous demand for physical silver bullion.

american silver eagle 2014 out of stock

U.S. Mint said they will further announce when additional inventory will become available for sale, but did not provide specific details.

The similar out-of-stock incident also happened in year 2012 and 2014. (Click on the year link to the articles).

We know the price of silver has came down tremendously. But what good does it do if the producer is not selling any silver to the public? What is the point of low price if investors cannot get physical silver in their hands?

Paper silver might be an alternative for investors. However bear in mind that a big portion of silver demand came from industrial demand. Industrial means physical silver. You cannot give a stack of silver paper (contracts) to the manufacturers in China to produce iPhone 6 and solar panel!

The consecutive years of temporary out of stock from U.S. Mint basically is suggesting they are running their minting operation on a very thin level of available raw silver. They are unable to cope with a suddenly spike of demand, which happened in the last few weeks.

This is not the first time such happens. Does it mean they have not learn from the past years? Or does it means they are unable to secure larger amount of available physical silver for production?

Till date the sales for American Silver Eagle coin is as following:

sales

It feels really weird to me that silver – a limited precious metal on earth that have strong industrial application and investment demand is facing downtrend in price. Silver price movement is definitely not aligned with demand.

Again, silver is a finite resource on earth. One coin alone (American Silver Eagle) eats up average 40 million oz of silver each year in the past 4 years. When silver is used in industrial application, it is gone forever.

I’m wondering, how long more can the trend of low silver price yet strong demand continue?

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Silver Price Fixed Ends in August 2014

For the past 117 years, silver price has never been on a truly free market. The price has always been fixed by 3 players: Deutsche Bank, HSBC and Bank of Nova Scotia.

The London silver fix is currently set by three banks over the phone at noon in London. It’s used by the entire silver market, including the Canadian mint, precious metal miners, jewelers, your local silver dealers and of course investors like us.

The price fix is based on deals between their clients and obviously did not take you (a retail investor) into consideration.

However, situation will change in August 2014 because Deutsche Bank is going to withdraw from such practice. This will leave HSBC and Bank of Nova Scotia to be the remaining player to “play” with silver price.

deutschebank-silver

It takes a lot of funding to manipulate silver price. Without financial resources from Deutsche Bank, the remaining 2 banks find it unsustainable to continue fixing silver price.

Deutsche Bank started pulled the plug on its global commodities trading business since December 2013. They cut 200 jobs and it becomes the first major bank to exit the once lucrative sector due to toughening regulations and diminished profits.

Deutsche Bank did not completely stop their activity on silver in December 2013. The bank resigned in April from its gold and silver fixing seats. Their silver price fix activity will only completed stopped in 14th August 2014.

What is the impact after August 2014? Silver market is not going to collapse.  silver price will face a market-led adjustment. There will be more uncertainty. But that also means a more transparent silver price driven by demand and supply. The fundamentals of silver has become more important than before. Watch this video to learn more about the fundamentals of silver

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Listen, Silver: We Need to Talk

Jeff Clark (Senior Precious Metals Analyst) wrote a letter to Silver last week in a fun way, and Silver answered back. Here is their exchanged emails:

Dear Silver,

Happy anniversary. It was on April 25, 2011 that you hit $49.80 per ounce in the New York spot market.

Today, three years later, you sell for around $20, nearly 60% less.

Is your bear market almost over—or are these low prices here to stay? Your price has lagged gold this year, so your normal volatility is lacking. How much longer will you be stuck?

Jeff Clark, Silver investor

Here’s Silver’s polite response:

Dear Mr. Clark,

I have good news for you. While some investors have lost interest in me and my price is at 2010 levels, things will soon change.

I put together this historical chart for you, and I hope you’ll share it with your fellow silver investors. It shows every major bear market over the past four decades. The black line represents what’s taken place from April 2011 through last Friday.

Of the seven prior bear markets, four lasted longer and three were shorter. Four declined less than today; two were about the same; and only one was significantly deeper.

If I were to match the two longest bear markets, my price would stay down until this October. If it matched the other two longer bear markets, it would end this summer.

Over the past 40 years, there has been no bear market that would extend my low past this October.

Or my low may already be in.

Either way, I think it’s safe to say that I’m close to the end of my down cycle. In fact, the historical data say the opportunity to buy me at $20 or less will soon be unavailable.

Let me relay some other data to you that also signal current prices can’t last too much longer…

The US Mint (Still) Can’t Keep Up with Demand

The sharp drop in my price in 2013 unleashed a wave of pent-up demand for silver coins. Look at the response from investors.

The question this year is if those record levels could continue to be supported. The first quarter is over, so I can tell you the answer…

The US Mint sold 13,879,000 ounces of me in Q1, 2.4% less than the 14,223,000 sold in the first quarter last year. Here’s the monthly breakdown:

  2013 2014  Gain/Loss
Jan. 7,498,000 4,775,000 -36.32%
Feb. 3,368,500 3,750,000 11.33%
Mar. 3,356,500 5,354,000 59.51%

January’s 36% decline from the prior year looks big, but it’s not what you think: the Mint didn’t begin sales until the end of the second week of the month. The monthly total thus reflects only 2.5 weeks of sales.

And March sales were the fourth-biggest month ever. Add in April’s sales figures and the US Mint is now on pace to exceed 2013 totals.

It’s clear that your fellow investors think my price will go higher.

Silver ETFs Have Net Inflows (Again)

You might remember that silver ETFs’ holdings were largely flat last year, unlike the mass exodus seen in gold funds. The pattern is continuing this year.

Holdings in my exchange-traded products (ETPs) have risen 3.5% year to date, an additional 17.5 million ounces. In fact, the net purchases by silver ETPs have totaled $354 million YTD, the largest influx of all commodity ETPs!

Meanwhile, gold-backed ETPs have seen sales of 500,000 ounces, about a 1% drop.

Jewelers Love Low Prices

Low prices for me have led to increased silver jewelry purchases.

As just one example, the UK reports that silver jewelry sales jumped 40.4% in February, to 351,791 items.

India Just Won’t Stop Buying

India imported 5,500 tonnes of me last year, 180% more than 2012. Imports comprised 20% of all global demand.

Last month’s silver imports were 250% lower. This was mostly due to the recent increase in import duties, and the fact that six banks got permission to import gold, which would soften purchases of me. This could partly explain why my price has struggled.

But as long as politicians keep gold restrictions in place, Indians will keep buying me.

China: More Silver for Solar

Chinese imports of me rose drastically in February, up by 75% month on month and 90% year on year to 358 tonnes, the highest since March 2011. Though lower the following month, March imports were up 16% year over year.

China’s solar industry is growing explosively. In 2009, it represented about 0.2% of the global market; this year, it’s estimated to be one-third.

It’s interesting to note that my price rose in February and fell in March, which suggests that Chinese demand affects my price, too.

Supply Sources Are Concerning

So far, suppliers have managed to meet demand. However, there are dark clouds on the horizon…

  • Very little excess supply is expected this year, as production is projected to remain flat, and demand for me shows no signs of letting up.
  • Solar power accounted for 29% of added electricity capacity in America last year. “More solar has been installed in the US in the past 18 months than in 30 years,” says the US Solar Energy Industries Association. “Eventually solar will become so large that there will be consequences everywhere.”
  • Supply from recycling will probably be weak, because it’s not cost effective to recover every tiny bit of me from cellphones or prescription eyewear or casino chips. One report says that Americans threw away 130 million cellphones last year, containing over 46 tonnes of me.
  • Several major base-metals mines are expected to be depleted over the next several years. The problem is that two-thirds of me is a byproduct from base-metals operations—if their output falls, there will be less of me, as well.
  • The Silver Institute says that demand for industrial products made from me continues to grow.

No Regrets

As I look at your current situation from a historical perspective, I see a lot of catalysts that will catapult my price higher in the near future. It seems rather clear that as demand continues to grow, supply tightens, and my role as money grows more substantial, I will trade at much higher levels in just a few short years.

In fact, I offered to bet my cousin gold that I will outperform him before this cycle is over. He declined to take the bet.

The clock is ticking. Don’t set yourself up for regret when my price leaves $20 in the dust.

Your friend,
Silver

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Silver Had A Terrible Year 2013

Silver had a terrible year in 2013. Silver price felt 36% in 2013. It started off with $30.11 and closed at $19.41.

year-2013

PricewaterhouseCoopers (PwC) conducted a survey on investors’ expectation on silver price for next 12 months in 2014:

  • 53% said they expect the price to increase
  • 38% expect it will remain at current levels
  • 9% predict a further decline in price.

Download the full report by PwC.

Silver is a multi-purpose metal. It acts as both a currency and an industry commodity for investors. Silver has a wide-range of applications such as jewelry and medical equipment. The price of silver dropped 36% in 2013. Starting the year around $30/oz and felt to $19/oz. Silver hit an inflation-adjusted record of just under $50 in April 2011. Oversupply of paper silver is partially to blame for the drop in silver price in 2013. Its correlation with gold as a store of value for some investors has contributed to its price depreciation in recent months.

Also, be sure to check out last week article: Top 3 Silver Investment Recap in 2013 >>> http://silverinmalaysia.com/top-3-recaps-silver-investment-2013/

In investment investors do not expect to make money right after putting in the capital. There will be up time and there will be down time. Apparently 2013 happens to be one of the bad year for silver.

If you have been holding on your purchase and wondering if this is the right time. Remember that you are getting a 36% discount compare to those who have invested 12 months ago.

In fact, if you use a longer time frame back to April 2011 when price was almost $50, you are now getting a 60% discount!

year-2011-now

Is now a good time to invest? Will price drop further? Unfortunately I do not have the crystal ball and I could not predict the future. All I could do is show you the facts and you have to make the decision.

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Top 3 Recaps Silver Investment 2013

2013 has came to the end. Silver price has not been particularly exciting this year. Here are the top 3 events worth noticing:

1. April Price Drop

On 12th April 2013, silver price broke support at $26. $26 has been a strong support in the past. When silver price broke a strong support, the support will then become a strong resistance in the future. During this drop, some investor got panic because a strong support is broken. Most investors took this opportunity to buy silver at a discounted price.

support

2. American Silver Eagle coin sales created new record high

American Silver Eagle (ASE) coin sales is a good indicator to gauge investment demand for physical silver. The coin has a beautiful design yet the premium is relatively low among the other coins. That made ASE became a highly demanded silver coin in the world.

In 2013,  American Silver Eagle coin sales has created all time high sales record. Despite bearish silver price movement in 2013, physical demand for American Silver Eagle coin remained strong.

coin

3. 2014 silver price outlook

Technically, silver market is not over by looking at the major uptrend lines. The fundamentals continue to build in a favorable way for silver. The facts remain that gold is moving to China and India at rapid rate, Germany only received a fraction of their gold back. It will take another six years before the New York Federal Reserve will finish their delivery.

2014 will be a rebuilding year for silver to regain strength but not significantly. This is due to the ongoing currency debasement and the coming economic crisis. It is usually wise to buy when the markets are quiet and when investors are pessimistic.

Silver price is expected to be traded between $19 to $26. It might take several attempts to to break $26 before hitting $30 mark. However, it is always possible that something could take place to shift market sentiment overnight.

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Malaysia’s Bubble Economy

The following article is written by Jesse Colombo and published in Forbes on 15th October 2013, titled “Malaise Is Ahead For Malaysia’s Bubble Economy”:

The emerging markets bubble began in 2009 after China pursued an aggressive credit-driven infrastructure-based growth strategy to bolster their economy during the global financial crisis. China’s economy quickly rebounded as construction activity flourished, which drove a global raw materials boom that greatly benefited commodities exporting countries such as Australia and emerging markets. Emerging markets’ improving fortunes began to attract the attention of global investors who were seeking to diversify away from Western nations that were at the epicenter of the financial crisis.

Rock-bottom interest rates in the U.S., Europe, and Japan, combined with the Federal Reserve’s multi-trillion dollar quantitative easing programs encouraged a $4 trillion torrent of speculative “hot money” to flow into emerging market investments over the past four years. A global carry trade arose in which investors borrowed at low interest rates from the U.S. and Japan, invested the funds in high-yielding emerging market assets, and pocketed the interest rate differential or “spread.” Soaring demand for EM assets led to a bond bubble and ultra-low borrowing costs, which resulted in government-driven infrastructure booms, alarmingly fast credit growth, and property bubbles in numerous developing nations.

Surging capital inflows into Malaysia after the Crash of 2008 caused the ringgit currency to rise 25 percent against the U.S. dollar in just two years:

MalaysianRinggit1

Foreign holdings of ringgit-denominated bonds hit an all time high:

foreign-institutional-holdings-of-local-bonds

Foreign direct investment (net inflows, current dollars) immediately recovered from its crisis-induced plunge to dramatically surge to new highs:

Malaysian-Foreign-Direct-Investment

The Kuala Lumpur Composite stock index rose 120 percent, aided by growing interest from foreign investors:

malaysia-stock-market

Malaysia Is A Classic Credit Bubble Story

Malaysia’s $303 billion economy has been growing at an average 6 percent rate in recent years due in large part to a growing government and household credit bubble.

malaysia-gdp

Since 2010, Malaysia’s public debt-to-GDP ratio has been hovering at all time highs of over 50 percent thanks to large fiscal deficits that were incurred when an aggressive stimulus package was launched to bolster the country’s economy during the Global Financial Crisis. After Sri Lanka, Malaysia now has the second highest public debt-to-GDP ratio among 13 emerging Asian countries according to a Bloomberg study. Malaysia’s high public debt burden led to a sovereign credit rating outlook downgrade by Fitch in July.

malaysia-government-debt-to-gdp

Malaysia’s government has been running a budget deficit since 1999:

malaysia-government-budget

Like their government, Malaysian households are also binging on debt, which has caused the county’s ratio of household debt to GDP to hit a record 83 percent – Southeast Asia’s highest household debt load – which is up from 70 percent in 2009, and up greatly from the 39 percent ratio at the start of the Asian Financial Crisis in 1997. Malaysian household debt has grown at around 12 percent annually each year since 2008.

It’s no surprise to see an inflating household debt bubble when Malaysia’s bank lending rate is at record lows:

malaysia-bank-lending-rate

Ultra-low interest rates have caused Malaysia’s private sector loans to increase by over 80 percent since 2008:

malaysia-loans-to-private-sector

Malaysia’s M3 money supply, a broad measure of total money and credit in the economy, shows a similar worrisome trend:

malaysia-money-supply-m3

Malaysia’s high level of household debt led the country’s central bank, Bank Negara, to recently impose lending rules that cap maximum terms of personal loans to 10 years and mortgages to 35 years – a decrease from the common 45 year mortgages.

Datuk Paul Selva Raj, CEO of the Federation of Malaysian Consumers Associations (FOMCA), said 47 percent of young Malaysians are currently in “serious debt” (debt payments amount to 30 percent or more of their gross income), something that could catch up with them very quickly.

“Car purchases and credit card debts are among the main reasons for bankruptcy in Malaysia,” said Paul. “It’s the culture we live in. There’s a lot of emphasis on status and being ‘cool’ – but being cool costs money.”

Malaysia’s household credit bubble is helping to fuel a consumer spending boom:

malaysia-consumer-spending

Malaysian car registrations are up by 50 percent since 2008:

malaysia-car-registrations

Malaysian corporate leverage, which includes corporate bonds and bank loans, is also rising at an alarming rate, reaching 95.8 percent of GDP in 2013 from 79.9 percent in 2007.

Malaysia Also Has A Property Bubble

Like most other countries that are part of the emerging markets bubble, Malaysia has a property bubble in addition to its credit bubble.

The charts below show the parabolic rise of overall Malaysian property prices:

malaysiapropertybubble

Accounting for nearly half of all household debt, soaring mortgage loan growth is a primary reason why Malaysia’s household debt is increasing at such a rapid rate.

Plans to build the tallest building in Southeast Asia, the 118-story Warisan Merdeka Tower, are a major Skyscraper Index red flag.

How Malaysia’s Bubble Economy Will Pop

While Malaysia has fared better than Indonesia, India and Brazil during this summer’s emerging markets rout, the country still has an extremely dangerous economic bubble that will pop when the overall emerging markets bubble pops in earnest. Malaysia’s bubble will most likely pop when China’s economic bubble pops and/or as global and local interest rates continue to rise, which are what caused the country’s credit and asset bubble in the first place. The resumption of the U.S. Federal Reserve’s QE taper plans may put pressure on Malaysia’s financial markets in the near future. Malaysia’s rapidly deteriorating current account surplus due to weaker exports is another worrisome development.

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Jesse Colombo published a follow up article on 18th October 2013 in Forbes, titled “It’s Not A Bubble Until It’s Officially Denied, Malaysia Edition”:

Lim-Guan-EngThe report received a favorable response from Lim Guan Eng, the Chief Minister of the State of Penang, who said in a press statement, “Even renowned financial analyst Jesse Colombo wrote in the Forbes online magazine that Malaysia’s economic bubble will burst due to its high government and household debt.”

Lim went on to say, “Interestingly, Colombo said that plans to build the tallest building in Southeast Asia, the 118-story and RM5 billion Warisan Merdeka Tower, is a major Skyscraper Index red flag.” The Skyscraper Index red flag refers to a Dresdner Kleinwort report in 2009 which showed a correlation between the construction of the world’s tallest buildings and the impending end of business cycles.

(The following “I”, “me” and “my” refer to Jesse Colombo)

INDONESIA-APEC-SUMMIT

The report also struck enough of a raw nerve that Malaysia’s International Trade and Industry Minister Datuk Seri Mustapa Mohamed refuted my assertion that the popping of China’s precarious bubble economy will also pop Malaysia’s bubble in a press conference in Kuala Lumpur, saying “The Chinese economy is not going to tumble. It’s going to stay strong. We’ve seen high growth in China for many years.”

“Malaysia is not going to be adversely affected. Anyway, we are focusing more on domestic resources growth and it’s becoming more relevant in this context,” he added.

There seems to be an unwritten rule that government officials across the world must deny the existence of economic bubbles that pose a great threat to their countries. When I was warning about the U.S. housing and credit bubble in 2005, Ben Bernanke infamously denied its existence. Officials are denying the UK’s and Australia’s housing bubbles, along with many other post-2009 bubbles that I am currently warning about.

I don’t see how public officials’ bubble denial does anything but harm to their countries’ citizens. Denying the existence of bubbles does not make them disappear, but only serves to hamper the early detection process that is so critical to the survival of terminal illnesses, whether physical or economic.

I also don’t see how denying the risks posed by China’s massive economic bubble does any good either. I will be writing an extensive report about China’s bubble after I finish covering bubbles in Southeast Asia, but for starters, they have a multi-trillion dollar debt bubble that has exploded in recent years as their government has encouraged the building of scores of empty “ghost cities” to generate economic growth.

Charts show a ballooning Chinese credit bubble:

China-GDP_0

HKDebtBubble1

The chart below shows how much of a role debt-fueled construction plays in China’s current bubble economy:

China-Cement2

It is very difficult to completely deny the existence of a bubble in China, and even worse to say that Southeast Asian economies won’t be affected by its popping. I genuinely want to see emerging market nations thrive, which is why I am working to raise awareness of their bubble problems, as I did with the U.S.’ bubble. I want the rest of the world to avoid making the same bubble mistakes that the U.S. and peripheral Europe did that devastated our economies, but bubble denial on the part of policy makers only makes this unfavorable outcome more likely.

Bank-Negara-Zeti-Akhtar-Aziz

On 20th October, Bank Negara Malaysia Governor, Dr Zeti Akhtar Aziz responded as following:

There is no reason to believe that Malaysia has seen the formation of an asset bubble that is about to burst, as the country has addressed many of the issues and risks related to it. Three series of macro prudential measures had been introduced this year to avoid the very risk of the formation of such a bubble asset. Conditions between now and in 1997/1998 are different. We are now on a growth path.

She added that domestic demand was driving Malaysia’s economic growth and the country was not at the epicenter of the recent global financial crisis. Our financial intermediaries remain resilient and the supply of credit was never disrupted.  Financial inter-mediation was continuing and financial markets continued to function. There is confidence in the financial system. This is the result of the focus over the last decade on financial reforms that have strengthened the foundation of our financial system. We believe that credit growth has moderated to a sustainable pace that supports the growth of the economy. In this regard, we continue to monitor conditions.

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Silver Price Malaysia

Calculate Silver Price Malaysia By Oz & By Gram In Ringgit

In Malaysia silver market, silver items are measured in 2 different measurement units, by ounce and by gram (or kilo gram). Many novice silver investors might find silver price Malaysia confusing. This chapter is to show how to convert from one unit to another so that investors could see the price of silver strictly by measuring the weight of the silver item.

silver price malaysia

Disclaimer: Displayed price and current price for silver price Malaysia might be varied due to spot price fluctuation. This image is displayed solely for illustration purpose only.

Before we calculate silver price Malaysia, note that when we talk about 1 ounce in precious metal it is actually 1 troy ounce. It is different from the standard ounce that people used for measuring weight of other “stuff”. For the very beginning, look at this conversion:

silver price malaysia

In the following silver price Malaysia calculation, for simplicity sake, we will use 1 troy ounce = 31.1 grams. We will also call it ounce (oz) instead of troy ounce.

Silver Price Malaysia – Conversion from Oz to Gram

To determine silver price Malaysia in ringgit, convert N number of oz to gram, you multiply N with 31.1. For example:
Convert 1 oz to grams = 1 x 31.1 = 31.1 grams.
Convert 3 oz to grams = 3 x 31.1 = 93.3 grams.
Convert 5 oz to grams = 5 x 31.1 = 155.5 grams.

This calculation is useful if the silver item is measured in oz but you are quoted silver price Malaysia in gram. By converting the weight of silver from oz to gram, it shows if an silver item is priced fairly.

For example, you are planning to buy a 2 oz coin and the respective website has published silver price Malaysia as RM 3.34/gram. The website is selling the coin for RM 310. So can you tell if the silver coin is priced fairly? Is this a low premium coin or a high premium coin? If high, how high? If low, how low? Let’s perform the following calculation:

Convert 2 oz to grams = 2 x 31.1 = 62.2 grams.
Calculate price for 62.2 grams silver in Ringgit = 62.2 grams x RM 3.34 = RM 207.75
Now, we can tell that the silver content in the coin worth RM 207.75.
The premium of the 2oz coin is RM 310.00 – RM 207.75 = RM 102.25
The premium in percentage is (RM 102.25 / RM 207.75) x 100 = 49.22%

You should be able to identify if the published silver price Malaysia premium is too high depending on the brand and mintage quantity. If you are a value-for-money silver investor and this 2oz coin is an less recognized brand in international market, you will want to skip this because you could buy other silver coins with lower premium and the silver coin that is recognized world widely. You should only buy this 2 oz coin if you are willing to pay for the numismatic value of the coin.

Silver Price Malaysia – Conversion from Gram to Oz

To determine silver price Malaysia in ringgit, convert N number of gram to oz, you divide N with 31.1. For example:
Convert 1 kilo gram to oz = 1000 / 31.1 = 32.15 oz.
Convert 500 grams to oz = 500 / 31.1 = 16.08 oz.
Convert 250 grams to oz = 250 / 31.1 = 8.04 oz.

This calculation is useful if the silver is measured in grams but you can only check silver price Malaysia in oz. By converting the weight of silver from gram to oz, you can tell if an silver item is priced fairly.

For example, you are planning to buy a 100 gram silver bar and the international spot price is USD 33.67/oz. US Dollar to MY Ringgit conversion is 3.02. The website published silver price Malaysia as RM 375.00. So can you tell if the silver bar is priced fairly? Is this a low premium bar or a high premium bar? If high, how high? If low, how low? Let’s perform the following calculation:

Convert 100 grams to oz = 100 / 31.1 = 3.21 oz.
Calculate price for 3.21 oz silver in Ringgit = 3.21 oz x USD 33.67 x 3.02 = RM 326.40
Now, we can tell that the silver content in the coin worth RM 326.40.
The premium of the 100 gram bar is RM 375.00 – RM 326.40 = RM 48.60
The premium in percentage is (RM 48.60 / RM 326.00) x 100 = 14.91%

If you are a value-for-money silver investor, this is a reasonable deal. Premium for silver below 15% from spot price could be considered as low premium. Silver price Malaysia can be calculated easily if you follow these simple steps.

“Silver Price Malaysia” is a sample chapter from Practical Guide for: Investing Silver in Malaysia.

Silver Malaysia eBookSilver Price Malaysia is simple if you follow the above formula. Practical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

Solar Panel

If you do not have the time to watch the video now, I highly recommend you save this video and watch it later. Free Video Download: [Silver – The Element of Change] This is a high definition video, Google anti-virus would not be able to scan it but it is absolutely safe to download.

Did you know apart from investment purpose, silver also has great demand from industrial usages. Electronic components consumption is the largest among all. However what is worth mentioning is consumption of solar panels that are coming up fast and strong.

solar

Photovoltaic technology is the backbone of the solar industry. Initially when it started, it did not even worth registering on silver demand charts before year 2000. The amount of silver consumed by solar panel makers has risen approximately 50% per year since that time. At the point of writing this (year 2013), solar panel accounts for 5.6% of all industrial silver use.

SilverFabricationDemandbyMajorUse2012

China, Japan and India

China (on 4th July) announced to raise China’s solar generating capacity from 21 gigawatts (GW) to 35 gigawatts (GW) by 2015. That is 67% higher from previous target which mean there will be a yearly addition of 10 GW from 2013 to 2015.

Japan will increase its solar generation capacity by about 5.3 GW in 2013. Japan’s domestic solar power market is expected to reach $19.8 billion, which mean Japan will pass Germany as the world’s largest solar market and overtake Germany as the world’s largest solar energy user.

India plans to increase its solar output to 20 GW by 2020, starting essentially from the scratch. On a worldwide basis, solar power generating capacity is projected to be 20 to 40 times the amount of current capacity by 2020.

What does it mean?

According to Silver Institute, making 1 megawatt of electricity requires up to 2.8 million oz of silver. If China and Japan do increase their solar generation capacity as much as they planned, which is total of about 27 GW. These 2 countries alone would require approximately 91 million oz of silver (or 2,824 tonnes of silver). That is equivalent to 11% of global mine supply by referring to 2012 numbers.

Why does this mean to us as precious metal investors? A simple answer would be that growing demand could crimp supply and push on prices.

If the world continues to produce as much silver as it did last year, while the demand in various industrial application are growing. Given currently low silver prices and increasing difficulties getting new mines permitted… The action to take is rather obvious: buy silver now! At current market price, it only takes less than RM100 to buy your 1st oz of silver.

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, practical tips and tricks for investing in silver. Click here to find out more.

American Silver Eagle July 2013

American Silver Eagle coin is the best tool to benchmark the demand for physical silver. The sales number is very complete compared to other coins, and the demand is great all over the world.

2013_American_Silver_Eagle_Dual

In the first three months of 2013, investors were purchasing American Silver Eagle Coins at an average ratio of 48 to 1 to gold eagles. 48 to 1 ratio simply means for every 1 oz of American Gold Eagle Coin is sold, there are another 48oz of American Silver Eagle Coins are sold.

On April, ratio felt to 20 as investors found gold which dropped $200 in two days is a significant bargain. However, that does not mean silver did not gain investors’ attention. Total amount of American Silver Eagle coins sold in April was 4.087 million oz, which is higher than 2 previous months (February 3.369 million oz and March 3,357 million oz).

The ratio has went back up to 49 in May and slightly increased to 57 in June.

What I want to bring to your attention is the sales closed in July. US Mint has sold total of 4.407 million oz of silver, making July the second highest sales month for American Silver Eagle coins. (Traditionally, January is always the highest month due to market demand for new year design).

The ratio is 87, which means for every 1 oz of gold is sold, another 87 oz of silver is sold! (the following chart is slightly outdated as the figure does not reflect the final week in month of July)

Silver-Eagle-Sales-Ratio-To-Gold-Eagles

Total sales number of American Silver Eagle (ASE) coin is another interesting number to watch. Since 2007, total oz sold by US Mint is increasing noticeably. It reaches the peak in 2011 with almost 40 million oz sold. The interest of ASE peaked in 2011 as silver price dropped more than 30% in early May 2011.

Another interesting year to watch is year 2013. The latest sales number released by US Mint is 29.45 million oz as end of July 2013. This number has exceed the total sales number for whole year of 2009 (28.77 million oz). It is only slightly below year 2010 (34.67 million oz) and year 2012 (33.74 million oz) respectively. It is also just another approximately 10 million oz difference from the all time peak in year 2011 (39.87 million oz). Without a doubt, 2013 will mark a new history for ASE total sales BEFORE year end.

The reason for such strong demand for ASE coins is due to low silver price and investors believe it is a bargain to buy silver at such cheap price. In fact, the demand for ASE coin was so great that US Mint has suspended their sales twice in the last 12 months (December 2012 and January 2013) – stating US Mint has to replenish their inventory.

sales

Base on what happened in 2011 and what we are experiencing in 2013, apparently the lower silver price goes, the stronger the demand for physical silver. Silver is a precious metal that has limited supply on earth. The question is… how long can this sustain? And will you be holding physical silver when silver price explodes?

The following is one of the analysis in eBook Practical Guide For Investing Silver In Malaysia for American Silver Eagle coins:

American Silver Eagle Malaysia Rating

In the eBook, you will also learn the analysis other silver coins, silver round and silver bar. You will learn what are the factors that you should consider before investing in any silver. In fact, there are some silver that you MUST totally avoid!

Silver Malaysia eBookPractical Guide For Investing Silver In Malaysia is an eBook specifically written with a Malaysian’s context for silver investment. You will learn different strategies, tips and tricks for investing in silver. Click here to find out more.

What The Chinese Are Buying?

Due to significant price price drop for precious metals (gold and silver), people around the world are massively buying up both gold and silver at such good price. Take China as example, on June 11, almost 10,000 people line up in front of a gold shop to buy precious metal. The buyers lined up during the three day Dragon Boat Festival.

Gold Line 2_0 Gold Line 4_0 Gold Line 5_0 Gold Line 6_0

While the PAPER price of gold and silver may have dropped nearly 25% this year, it’s clear that PHYSICAL demand in the real world is soaring.

Gold and silver tend to trade together, however the demand for these two metals is quite different. The biggest demand driver for silver is its industrial use. While gold is driven by investment demand from both private citizens and central banks. Demand for industrial silver uses in electronic devices (such as smart phones, air-conds, TV, computers, etc) is increasing. Demand outlook for silver is better than the demand outlook for gold.

While gold is roughly double its nominal high of $850 in January 1980, silver is still barely below half its nominal high of around $50 an ounce set in 1980 and April 2011. That makes the white metal affordable and such a bargain for the average investor looking to protect the value of his wealth.

eric-sprott

Eric Sprott, the billionaire Canadian investment guru, recently said:

“I think silver will be the investment of this decade whereas gold was the investment of the last decade. Silver will outperform gold. I believe silver will trade down 16:1 ratio to gold…Your return will be 300% more. If you have the patience and can stomach the volatility, I think silver will by far be the better investment going forward.”

In the first 5.5 months of 2013, U.S. Mint sold more than 23 million American Silver Eagle bullion coins. That’s the first time ever the Mint has sold this many coins so early in the year, setting a record in the 27-year history for this coin. If price continues to stay this low, sales is expected to exceed historical high in 2011. Do note that this is the data for 1 coin ALONE –  American Silver Eagle.

silver-prices-investment-demand-chart

The reality is, coin dealers both across the U.S. and locally in Malaysia have been regularly selling out of their inventories, desperate to get new allocations. Find out more about the physical silver shortage in Malaysia.

Silver prices ended April down $4.14 an ounce, or 14.6%, at $24.42 an ounce, marking the third consecutive month of declines. The metal was little changed in March, trimmed by just $0.10. In February, silver shed $2.92. In January, it gained a modest $1.12.

However, do not get overly concerned on short-term fluctuation in paper silver price due to economic noise. I personally treat it as a great buying opportunity when price is low. Silver is an industrial metal first, precious metal second. Two third (2/3) of the annual physical silver supply went to feed industrial demand. Industrial demand requires physical silver, while the fluctuation of price is paper price. Get it? The demand for physical silver continue to be expected as strong in the coming years:

silver-prices-industrial-chart

Global industrial consumers typically don’t hold large reserves of silver thanks to just-in-time supply in production practices. A huge rush in orders could trigger a silver industrial supply shortage. Earlier this year rumors swirled that Apple  iMac “production problems” were actually tied to a silver shortage. Apple’s iMac and iPad screens use more silver than the older models.

Silver Malaysia eBookTo find out more about silver investment in Malaysia, take a look at the eBook: Practical Guide For Investing Silver In Malaysia