In this week's Off the Cuff podcast, Chris and Mish discuss:
- Gold: Falling Prices
- Sparking in unprecedented global buying spree
- Silver: Falling Inventory
- Physical demand is overwhelming the system
- Europe: Falling Everything
- Bad news everywhere you look
Chris and Mish dig into the implications of the recent drop in the precious metals. These lower prices, engineered or not, have resulted in buyers coming out of the woodwork for physical bullion.
The surge in demand is uncovering how vulnerable the distribution system for physical precious metal truly is. Production and inventories are set to handle the annual amounts we've experienced over the past decade – there's really no elasticity in the system to expand much beyond that volume.As we've been reporting for the past two weeks, the result of this is higher premiums over spot, longer delivery times, and growing "out-of-stock" outages at the dealers.
The demand we're seeing is largely coming from higher buying volume from repeat customers. If new buyers enter the picture in the future, it's quite possible that will overwhelm the system entirely and there may be no physical obtainable at any price.
Chris and Mish also touch on the worsening situation in Europe, which has been largely out of the headlines of late. The much touted "reforms" of the past several years are clearly not working; ugly macroeconomic data is multiplying right now in pretty much every country in the EU.
by sand_puppy