Physical Silver Shortage

Last Monday, silver price continued sliding down to as low as $22.50. Many speculated this is due to China released their GDP growth was 7.7% instead of the expected 8%. Silver is an important element for economic growth (manufacturing industrial demand), but missing 0.3% simply does NOT justify such big drop in silver price. Instead seeing this as a panic sell, this is an under-covered “price manipulation”.

This is a video that explains better the reason why gold & silver price crashed:

The video explained on gold price. Gold price is tightly coupled with silver price. When gold price goes up, silver price goes up, and vice versa. Further reading on: What Just Happened to Silver Prices

While the paper traders are selling paper silver, investors who truly understand fundamentals of silver investment are buying up more physical silver MASSIVELY during the price dip. They saw such time frame as a good buying opportunity to buy even more real physical asset with great discounted price.

The demand for physical silver is so great that many local silver stores run out of stock!

This is one of the largest silver stores in Malaysia, the physical silver supply has run out and only accepting pre-order. (Pre-order means the company accepts your order, takes your money, they will orders the stocks, and only delivers to you after the newly ordered stock has arrived. Usually at a much later date because there is simply no more stock left in the inventory at the point of taking your order.)


Another local silver store running on pre-order basis:


Some of the individual sellers temporary “close shop”: 


The physical silver shortage is NOT only limited to Malaysia silver stores, but a world-wide shortage. Some of the major silver dealers in overseas are ALSO having physical silver shortage:


Another silver store from United States:


Daniel Ameduri from said:

I recently had a purchase order canceled hours after placing it (this has never happened to me before), the dealer called and told me sorry that they just couldn’t get the 1oz rounds I ordered.

To make the matter worse, US is the 10th largest silver producer, Rio Tinto’s Kennecott mine in Utah which contributes to 16% of US annual silver production just landslided. This mine will likely shut down production. 5 million oz of annual silver supply (and 500,000 oz of annual gold supply) have just been vanished. The loss of 5 million oz silver supply will have a DIRECT AFFECT on the Sunshine mint’s ability to source silver for blanks, which are used in the production of American Silver Eagle and other Sunshine brand  silver products.

landslide3 landslide landslide2

landslide6 lanslide4 landslide5

In economics 101, when a commodity is low is supply, price will shoot up. Interestingly, while current physical silver supply is low and even with the news of landslided mine, silver price did not shoot up too much. Does it mean many people are missing out such great buying opportunity? Silver price has came down to lowest point in the past 2 years, is it a good time to buy silver now?

Last week I shared about Fibonacci Retracement. Some readers wrote to me saying they didn’t really get it. So I will explain it further here. I have draw the lines on a long term silver price chart – going back as far as 2009:


Click on image for full resolution (Right click, open with New Tab)

The lines consistently served as the support level and resistance level throughout the long term chart. When it comes to Technical Analysis, the longer the time frame, the clearer the trend, the more accurate decision we can call. In this chart, the data goes as far as year 2009 – 2013.

For the past 18 months, silver price has been consolidating between $26 to $36. The line at $36 served as a stubborn resistance level while the line at $26 served as a strong support level. Last week, silver price broke $26. The NEXT strong support can only be found at around $20. At the point of writing this, silver price is $23. Does it mean silver price will continue to go down to $20? I do not have the answer but the chart shows a “POTENTIALLY yes” that might happen within the next few weeks.

Someone asked:

“Where will you buy silver if price goes 20/oz or even lower?”

My response was:

When price was $30+, it’s a question of which dealer provides the most competitive price; when price is $20 (or lower), it’s a question of which dealer is still selling silver.

I have shown you proofs that physical silver shortage happens when price went down to $23 – $24. Smart investors would take advantage of the low price rather than running away from it. Many of the established dealers who were selling their silver at such price were losing money as they bought the silver price at higher price. If silver price does dropped to $20 (or lower), it is a matter of who else is still selling silver. During the recent silver price dip:

  1. The premium of silver products has increased. Premium is the difference between silver spot price and the actual selling price. Dealers usually increase premium to discourage buyers from buying because the dealers only have limited amount of stock.
  2. The delivery time for physical silver has been increasing from 1 week, to 2 weeks, to 4 weeks, and the latest reported is up to 6 weeks. No business prefers delay delivery. The delivery time will increase ONLY if the dealers genuinely do NOT have enough stock to ship.
  3. Spot price is now below mining cost. The mining cost for silver in Q4 2012 is average $25.74 but current spot price is below that, at $23. We witness for the 1st time, physical silver shortage in both local market and overseas market. Silver price can go down to as low as $11 or $12, but the question is, can you buy physical silver at that price?

Silver Malaysia eBookThe eBook: Practical Guide For Investing Silver In Malaysia will show you where to buy silver, how to buy silver and ensuring you maximize your return for investing silver in Malaysia. Click here to find out more.

7 thoughts on “Physical Silver Shortage

  1. I want to buy some silver at the current price. Do i need to buy the practical guide for investing silver in malaysia. Where anh how do i begin to buy some quality silver coins? Please advise! Thanks!

    • Hi Andrew,

      I highly recommend you to download the eBook Practical Guide for Investing Silver in Malaysia to understand how to invest in silver. The package comes with a Quick Start Guide which will show you how to buy silver in Malaysia with most competitive price. It is a short and condensed report to quickly get you started in silver investment.

      To get better in the silver investment game, eBook Practical Guide for Investing Silver in Malaysia will give you a complete picture about silver market in Malaysia, included a list of trusted dealers that I have compiled and several silver items that I recommend you for investment purpose.

      You can find out more about the eBook package here:

      Hope these help!

  2. Hi Daniel Foo. I have decided to buy my first 1oz of physical silver. Since I live in Sabah, there is a company selling gold and silver called public gold. So I am willing to go there and buy rather than order online. I found out that public gold sells their silver in gram rather in troy oz. The minimum of silver they offer is 100gram and is stated their company name on it called public silver .999. Is it still worthy to buy their silver because is it not famous as chinese panda and silver eagle? Do you recommend me to buy 100 gram instead of 1 troy oz of physical silver?

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