Evil always tends to be its own worst enemy! Little did JP Morgan realize when they carried that price slam out in 2011, that their actions would unleash forces within the silver market that couldn’t be stopped or reversed…
Royal Canadian Mint’s Sales Figures Released
Last year, as most here know, the US Mint had a record year for its silver bullion coin, the silver eagle. After selling over 44 million eagles, and several million more ounces of their semi-numismatic coins, and America the Beautiful coins, the US Mint found itself knocking on the door of the 50 million ounce mark.
As utterly impressive as that is, I’ve been waiting to see what the Royal Canadian Mint’s(RCM’s) sales figures would be for last year. After all, as slow as the US Mint’s reporting is, the RCM only usually reports these important figures once a quarter.
So, as you can imagine, when I learned (via Ed Steer) that they’d finally released their 2014 sales figures, I was very eager to read how 2014 transpired. What their mint revealed was fascinating, and at times, even somewhat surprising.
A Breakdown of Sales
There were several, very telling things to be learned from the RCM’s report, but firstly, let’s start with gold sales. Here is what page 29 of their report had to say in regards to the gold demand they saw last year:
“Sales of Gold Maple Leafs (GML) declined 37.8% to 709,200 troy ounces from 1,140,400 ounces in 2013 while the average price declined 10.2% to US$1,266.40 per ounce in 2014 from US$1,411.23 per ounce in 2013.”
Ouch! That’s brutal, is it not?
Much like the US Mint’s sales figures, the depressed prices in gold have failed to bring about an increase in demand for gold bullion coins from the world’s 2nd largest mint. The stackers and vanilla retail investors couldn’t be moved to summon the energy to stack gold maples, despite that fact that the flagship gold coin of the RCM became 10% more affordable. In fact, though 2014 brought the lowest, average gold price in 5 years, the demand for Gold Maple Leaf coins caved in by nearly a stunning 38%.
This is a remarkable indicator of sentiment, and seems to be a trend right now in gold coins. It also continues to show that, currently, the real factors moving the gold market now solely seem to be Eastern and central bank considerations.
Now, we’ll get on the main event: silver! In 2014, silver maple leaf coin sales showed a very different trend from their gold cousins. Check this out, from the same report:
“In sharp contrast, sales of Silver Maple Leaf (SML) coins increased to 29.2 million ounces from 28.2 million ounces in 2013, establishing a record volume of sales for the second consecutive year. While the volume of coins sold increased 3.5%, the average silver price declined 19.7% from $US23.8 per ounce in 2013 to $US19.1 per ounce in 2014.
Wow! The growing contrast between silver and gold coin sales, continues to grow more stark with each passing year. I wondered what 2014 would look like for the RCM, considering that 2013 saw such a substantial increase in market share for them(at the expense of the US Mint). Yet after such a jump in silver sales in 2013, the RCM sales figuresstill continued to show an uptrend.
Four years after the silver price downtrend, not only has tonnage demand not diminished for coins, but the undeniable trend of ever larger tonnage consumption is now firmly in place.
This now means that the plain versions of just two coins (the silver eagle, and the silver maple) now consume more than 70 million oz of supply per year!
44 million(SAE’s) + 29 million (SML’s) = over 73 million troy ounces in one year
This would’ve been unheard of even in 2008.
Now, some commentators look at this evidence and continue to simply say that JP Morgan is the mystery buyer of many of these silver coins. The reason they cite this is mainly that many over-the-counter shops have reported lackluster sales. While it’s certainly possible there could be a large, undisclosed buyer of some of these coins, to my mind this isn’t reason enough to believe that one bank is now surreptitiously buying up millions of silver eagles and maples.
After all, India continues to ratchet up their silver jewelry and bullion demand with each passing year: is JP Morgan behind that as well?
While it may be true that some over-the-counter bullion shops are reporting lackluster sales, I gotta be honest on this point: I now, almost completely, do my business with online, retail establishments. I used to visit my local coin shop all the time, but I’ve probably visited it only a few times in the last few years. This hasn’t meant that I, as a retail investor, have stopped buying silver. Quite the contrary, I assure you. It just means that my buying habits have changed.
It also seems likely that much of the silver coin sales stem
from the fact that silver stackers are largely more “militant” die-hards these days. As more is learned about the manipulation that the large central and bullion banks are committing in this arena, we simply get more determined to defy their criminality with our actions.
Furthermore, as silver continues to sell for well under the cost of production, and as the ratio of silver to gold ludicrously continues to be in the 70’s to 1….why on earth would many retail investors be moved to choose gold over silver?
Just on a comparative value basis alone, most of us have simply decided to aggressively step up our game in silver stacking.
The lower the prices go, the greater the comparative silver is to gold. Silver offers more bang for the buck, as well as a greater influence to stackers(as I’ve recently written about). The growing divergence between silver and gold sales though is so unprecedented, that even the RCM made special mention of it in their report:
“Although activity in the silver and gold bullion markets tend to correlate, demand for silver in North America and Europe did not diminish throughout 2014.”
They think this divergence between silver demand and gold demand is a huge takeaway, as it is such a departure from the norm, and I completely agree: something is shifting here, and we’re only just beginning to see its effects.
Lastly though, there was a bit of a surprise admission from their report that I simply have to mention.
It had to do with the refining issue. As I’ve written about before, refiners have begun to be hugely impacted. especially within the silver space, due to the chronically lower prices. When it comes to the RCM’s refinery, this seems to be particularly true. Here’s what they revealed:
“The Mint’s refinery supports the production of the Mint’s bullion and numismatic coins with refined precious metals. In 2014, the volume of precious metals refined declined 14.0% from 5.5 million ounces in 2013. The volume of scrap gold and rough gold deposits from the mining industry declined 6% while silver deposits declined 44% in the face of aggressive competition in the refining industry ; the supply of bullion scrap is much diminished due to the drop in bullion prices.”
Fascinating, a 44% decline in silver due to stiffer competition in this sector. This is due to the fact that more and more silver is needed, but less and less is available at crazy price levels like these. This is another reason the banking cabal is so keen on mining companies churning out record quantities from mines.
As prices go lower, and government stockpiles have nearly all vanished, mines are becoming the only material source of available silver to speak of. This is a trend that’s grown over the last 10 years, however it wasn’t until the last 3 years that the effects on refining have become so very acute.
Take a look at this chart here from Reuters:
There’s no doubt about it, s ilver refining is an endangered species, almost a rounding error, and will continue to be so until silver’s price is released from JP Morgan’s grip.
Until then, since the few, beleaguered silver miners won’t stand up for themselves or their shareholders, they’ll have to continue to churn out their best assets in exchange for enormous, multi-billion dollar losses .
While government gold coins have seen a marked slowdown in the face of the price decline, silver continues to scale the highest heights, putting in its strongest sales numbers in modern history. The RCM has also solidified a higher market share, in comparison to the US Mint, due to the US Mint’s goofy, sporadic shut-downs and rationing policies that continue to be an issue, whenever silver demand has any large spikes. These awful business practices have driven many customers elsewhere, and I hope that this trend also continues.
Silver put in a modern record for investment demand and consumption in 2014, and is likely to consolidate or even improve upon these numbers in 2015. Strong retail demand, in the face of steep price declines, wasn’t just a silver eagle phenomenon, but rather a trend throughout the world’s major government mints.
The RCM’s report confirms that the ongoing, soaring silver investment demand, into the face of this contrived price decline, is a force with real staying power.
Brothers, the thing that I find most amusing about all of this, is that ironically enough, we stackers really have JP Morgan themselves to thank for this sustained, renewed silver fascination in the investing world!
Remember, after all, that this trend was really lit by JP Morgan’s own takedown of silver from $21 to roughly $8 in 2008.
Evil always tends to be its own worst enemy! Little did JP Morgan realize when they carried that price slam out, that their actions would unleash forces within the silver market that couldn’t be stopped or reversed. Ya know what though? That’s just too bad!
Their blatant crimes helped open Pandora’s Box in silver, and they really have no one to blame but themselves.