It's one of the biggest mysteries in finance right now.
I mean, it's a real head-scratcher ...
On one hand, demand for silver coins has been off the charts. With so many investors wanting to swap currency for silver, neither the U.S. Mint nor the Royal Canadian Mint has been able to keep up with purchase requests.
In fact, the U.S. Mint actually had to suspend sales of the "Silver Eagles" just a couple of weeks into the New Year - and it still smashed the all-time monthly sales record in January by selling 7.5 million of the hugely popular coins.
And that insane demand carried over into February and March.
After the first two months of 2013, the U.S. Mint had sold nearly 10.9 million American Silver Eagles (ASEs) - a third of its sales total for all of 2012. And on March 18 - the Monday that followed the weekend news about the Cyprus bank-deposit-confiscation plan - the Mint reported a stunning sales total of 638,500 of the silver coins ... for just one day.
But here's the kicker. Despite this frenetic buying, spot silver prices have actually fallen since the start of the year - a conundrum that's ignited fears of a silver shortage and investor allegations of market manipulation by Wall Street.
With this scorching demand for silver coins - and reported shortages of silver-based investments - how is it possible for the metal price to be falling?
One reader, after experiencing this frustration firsthand, recently sent us this query:
For several weeks now, it has been difficult to purchase physical silver at any of the nation's coin shows, and most dealers have a very small supply - if they have any inventory at all. What little silver they can purchase, they tell me, goes out the door quickly as buyers snap it up. Yet the market price of silver remains below $29 to $30 an ounce.
Recent reports note that Russia has made a hefty purchase in excess of 25 tons of silver. Has that affected U.S. supplies? What's the overall outlook? We'd be grateful to hear your take on this. Most of the folks we ask seem baffled, too. - C.C.
Our No. 1 goal at Private Briefing - as is the case everywhere at Money Map Press - is to help you make money. We usually achieve that goal by delivering the most-profitable investment recommendations we can find.
But we also want to help make you a great investor. So when we aren't giving you straight recommendations, we're educating you by providing the research you need to make great money-making decisions.
To that end, I wanted to give you an insider's view of the silver market. So I contacted Rich Checkan at Asset Strategies International (ASI), a precious-metals and foreign-exchange dealer that operates out of Rockville, MD - just down the highway from our own offices here in Baltimore.
Because ASI is a longtime veteran of the precious-metals business - it recently celebrated its 30th anniversary - I was certain that Rich and his staffers could offer you insights you might not find elsewhere.
Here's an excerpt of my interview with ASI.
Patalon (Q): Rich, we've all seen the headlines - demand for silver products is soaring, but prices are dropping. And, as you see from some of the e-mail excerpts that I've shared (with reader names withheld, of course), some of our subscribers say they're having a tough time buying silver coins and bullion of late - as if there's a real shortage unfolding. This has ignited all sorts of conspiracy theories, and a lot of worry, too. I was interested to hear you say that you all have experienced some of what I've described firsthand. So let me start by asking: What have you been seeing?
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning at Money Map Press. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.