Published 8AM EST, 2 September 2022
Is it time to start stacking again for precious metal physical stackers or is it time to still remain on the sidelines holding cash? Let’s take a look at some metrics that most analysts never use to determine the answer to this question and see what these metrics reveal.
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Today, I’m going to review the premiums of CA 1-oz gold and silver maple leafs and US 1-oz gold and silver eagles over spot prices as of the start of September 2022. In doing so I’m going to use the lowest prices available from US bullion dealer, JM Bullion, on orders of 10-19 gold coins and 100-499 silver coins.
For CA gold maple leafs, premiums are a little higher than the typical 4% to 5% they were 15 years ago, but for US gold eagles, premiums have soared to 11.63%. And even though many recommend buying bullion bars over coins because of lower premiums, premiums for a 10-ounce Credit Suisse bar still are at 4.6% over spot. I prefer 1-ounce coins however because of ease of portability and divestment nearly in any nation in the world.
Regarding silver, premiums are through the roof, but primarily because of the absurdity of how much the Western banking cartel has suppressed silver prices through their control of paper derivative markets. For CA silver maple leafs, premiums have risen to 45% over 27% to 35% premium in prior years and US silver maple leafs now sell at a whopping 84.85% premium over spot right now.
This is personally why my guidance has always been to buy Canadian maple leafs over US eagles, because CA maple leafs are internationally as recognized and as easy to buy and sell as US eagles but yet much cheaper. Furthermore, the US eagle coins is slightly larger and heavier than the CA maple leaf because of the lower purity (91.67% v. 99.99%) but the same composition of 1 troy ounce of gold. Regarding US silver eagles versus CA silver maple leafs, each are of at least 99.9% purity.
US PM Data is NOT a Proxy for a Global World Perspective
Despite these growing premiums and enormous premiums for 1-ounce US precious metal coins over spot, I believe that these premiums will continue to grow (at least over NY and London spot prices if the new MWS spot prices establish higher gold/silver spot prices in Moscow) and should not serve as a deterrent to buying gold, and especially silver, coins. Many people will interpret these premiums as a reason to stay in cash instead of stack but I believe that growing premiums signal just the opposite – that the time to stack has once again arrived. Though many people will argue that silver coin premiums should not be as high as they are at the current time due to US silver eagle coin demand being down 39% in the first seven months of this year (11,556,500 coins v. 19,010,500) this is not the statistic on which to focus. Neither would be the 806,000 ounces of US gold eagle coins sold in the first seven months of 2022 v. the 711,500 sold during the comparable time period last year.
Americans tend to only focus on US statistics to drive their buying and selling decisions in gold and silver, as the mainstream media only discuss gold and silver from a US perspective as if the rest of the world does not exist.
Making decisions from a nationalistic perspective, if an American, is a huge mistake since the international demand for gold and silver outside of the US dwarfs that of US markets, a fact I will discuss in future articles I will publish on this platform here. In addition, much of the even very significant 45%+ premium over spot that exists for CA silver maple leaf coins exists specifically because of the massively artificially suppressed price of silver in the synthetic paper markets. If silver prices were anywhere close to free market prices the premium might only be 2% to 3% over spot.
Having lived in Asia for 15 years, I used to laugh at mass media headlines that stated the reason behind silver prices falling as collapsing demand for US silver eagle coins even when PM coin demand in many Asian nations for sovereign silver coins was soaring, and in much greater quantities. The reason premiums are growing for both gold/silver coins this year is the increased global demand for physical gold/silver at a time when the mainstream media never discusses gold/silver anymore due to the lack of Western interest in gold/silver as an investment at the current time. I guarantee you that some huge players in Asia are buying large amounts of physical gold/silver at these prices right now.
When I spent time in Shanghai and Beijing in past years in China, you could walk into nearly any bank to purchase gold and silver coins, but yet the Western mass media places a near complete blackout on reporting of Chinese gold/silver coin consumption as if it does not exist in their US centric “world” of financial reporting. Recall this comical statement from last August from BTC maximalist Scott Melker about how “gold [was] dead” and that BTC’s market cap would soon pass that of gold’s. With BTC’s market cap at $384.3B and gold’s at $11.3T today, that means even if zero more gold ounces were produced moving forward, BTC prices would have to surpass $590,000 for Melker’s absurd statement to come true.
Also to remind everyone, the value of physical gold and silver is not its fiat price, but its immutable weight. This will become apparent when gold/silver prices escape more of the Western banking cartel price suppression scheme. I’ve posted a photo of 1930 food prices from a California grocery store below to remind everyone of this.
The fact that the price of a high quality oyster is literally 8X to 10X the price it was in the 1930s does not mean that oyster lovers now devalue oysters due to the higher price. In fact, their much higher price likely makes oyster lovers value them even more. Likewise, rising gold and silver premiums over spot prices in coming years will make all stackers value the time they bought physical when premiums over spot were much lower than they will be in the future.
The Time to Stack is NEVER When the Media Says So
Remember, the time to buy gold/silver is when interest, as expressed by the media, is at all time lows, not when the media is running stories about gold and silver every other day.