January 12, 2012

KWN has been receiving reports about extraordinary demand for American silver eagles, so today King World News interviewed one of the top gold and silver dealers in the United States about what is taking place. Bill Haynes, President and owner of CMI Gold & Silver had this to say about the situation: “Silver eagle sales by the US Mint are absolutely exploding in January. I think that’s an indication of more widespread recognition of the financial problems the world is facing and that’s an easy, convenient coin for investors to buy. This could turn out to be another record year for silver eagle sales by the US Mint, maybe in the neighborhood of 40 million ounces.”“I’m shocked by the demand for eagles. As an example we just had a buyer who picked up $1.5 million of one ounce silver eagles and that’s all he wanted — the eagles. The significant thing I’m seeing here, Eric, is there is next to no selling by retail customers. It would appear the gold and silver, held by the public, is in extremely strong hands.

People who are buying these metals are buying and they are holding on. To me this is an indication we are still in the very early stages of a precious metals bull market. This is especially the case for buyers of silver eagles, they buy and they hold. They simply do not come back into the market to sell….
“What I would add to this is investors who can handle silver’s bulk and weight really need to be there. They need to be buying silver because that is where the greatest upside potential is. With the gold/silver ratio this high, people need to be buying silver.

With there being very little retail selling, what I expect to see is a big increase in premiums on the various products when the buying comes in here. Now, practically all of the manufacturers of products, from 100-ounce bars to one silver eagles, have ramped up their capacity to produce.

But there is going to be a whole new tranche of buyers buyers coming into the market because more and more people are starting to realize there are no easy solutions to the problems facing the world banks and the world governments. Investors will start to enter the market in a big way with the kind of buying we saw in 2008 and 2009. And with no retail selling we will see a big increase in premiums going forward.

As far as the secular bull market in the metal goes, I continue to believe that we are in the early stages of the second phase of this bull market. The second phase is the longest and strongest. I think phase 2 will run for years.

This consolidation has simply been a drawdown in price that investors should take advantage of. The people I deal with are buying aggressively on the dips and almost cheering when the price drops because they can add to their positions at a lower price. Somewhere in here we will get into the third phase, years from now, when prices will go parabolic.”
Eric King


Leave a Reply

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