With Market, Without Price

Last week, the manufacturer of American Silver Eagle coin, United States Mint announced:

“The United States Mint will issue its last weekly allocation of 2013 dated American Eagle Silver Bullion coins on Monday, December 9, 2013.  We will begin accepting orders for 2014 dated American Eagle Silver Bullion coins on Monday, January 13, 2014.”

us-mint-close

What this means is, U.S. Mint will not be selling any American Silver Eagle coins for more than 1 month (between 9th December 2013 to 13th January 2014). This is not the first time U.S. Mint stop taking order. The similar announcement was made in late 2012 >> American Eagle Silver – Sold Out!

The record all time high sales for American Silver Eagle coin is 39.87 million oz in 2011. At the point of writing this article (3rd Nov 2013), the coins sales has reached 39.18 million oz. If you are reading this article in mid November (or later), I’m fairly confident the bullion coins would have made a new record by passing 2011 all time high record.

ase sales

In year 2011, there was major crash in silver price and sales went all time high. In 2013, there was another big drop and again, sales demand went up significantly. It seems that the lower the price goes, the higher the demand. This defies the basic supply demand principle and cannot go on forever. Physical silver is a finite resource with infinite demand and applications. When industrial usage used up the physical silver; when investors continue to buy physical silver at a rate and volume that increasing every year, physical silver will be used up (due to low price), and people will be wondering – now what?

It is ironic to see physical silver has highly demanded yet silver price has not significantly rise since 2011. The reason is because silver spot price is still largely controlled by paper silver price. This is a “with market, without price” situation, which means there are demand for physical silver but silver spot price did not catch up. Many physical silver investors are experiencing paper lost for holding the physical silver.

Malaysia property market is the opposite of this known as “with price, without market” situation. Property prices has been soaring for the passed 5 years. Transaction has been slow since early 2013, yet price did not drop significant. I was talking to a real estate agent over the weekend, he shared that he has one property being viewed for 13 times and yet could not sell it off. Many property investors are experiencing paper gain for holding their property.

Are these both illusions that would only clear themselves over time? Personally I’m in no rush of selling silver or buying more property. What is your game plan?

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.

2 thoughts on “With Market, Without Price

  1. Pingback: Silver in Medical | Silver in MalaysiaSilver in Malaysia

  2. Pingback: American Silver Eagle Out of Stock Again?! - Silver in MalaysiaSilver in Malaysia

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>