Soaring Lease Rates EXPOSE Gold & Silver Shortage - (GREAT News For Stackers)

Summary

In this video, Smart Silver Stacker discusses the current state of the gold and silver markets, highlighting rising lease rates, a potential shortage in physical bullion, and increasing demand for precious metals. Despite these developments, retail investors are selling their bullion, leading to historically low premiums for products like gold and silver coins. The video emphasizes the importance of owning physical precious metals amid economic uncertainties, including inflation, trade wars, and unsustainable debts. With banks and institutions heavily investing in metals, now may be an ideal time for stackers to purchase, as premiums remain low.

Takeaways

• 😀 Gold and silver markets are showing signs of a developing shortage, indicated by rising lease rates and extended wait times for physical bullion withdrawals.
• 😀 Retail investors are currently selling their gold and silver bullion, despite market conditions favoring stackers, making it a good time to buy at historically low premiums.
• 😀 Gold and silver prices are experiencing significant movement, with gold recently reaching all-time highs and silver showing strong technical breakouts.
• 😀 Copper's recent breakout is a bullish indicator for silver, as both metals are major industrial inputs.
• 😀 There are delays at the Bank of England, leading to queues for gold, which is trading at a discount compared to spot prices due to high demand and logistical bottlenecks.
• 😀 The increase in lease rates for both gold and silver is a clear sign of a supply shortage, as the cost of borrowing these metals has surged.
• 😀 The U.S. is the world's largest importer of silver, with a significant portion coming from Mexico and Canada, and potential tariffs could raise costs dramatically.
• 😀 Central banks, institutions, and industrial users are heavily investing in physical gold and silver, indicating growing concern about financial instability.
• 😀 The retail bullion market is currently seeing low demand, with premiums for products like Silver Eagles and junk silver coins remaining historically low.
• 😀 Despite low premiums for retail products, the real drivers of the current gold and silver bull market are institutional investors, not retail stackers.

Q & A

What is causing the recent surge in lease rates for gold and silver?

The recent surge in lease rates for both gold and silver is a sign of an emerging shortage in the markets. The increased lease rates indicate a higher cost of borrowing these metals, reflecting the tight supply and high demand for physical gold and silver.

Why are retail investors selling their gold and silver even as prices rise?

Despite the rising prices, retail investors are selling their gold and silver because of the market dynamics. There is a low demand for physical bullion products among retail investors, which is allowing them to sell their metals into the market, even as institutional buyers load up on precious metals.

What has been happening at the Bank of England with gold deliveries?

The Bank of England has been experiencing significant delays in delivering gold to investors, with queues stretching from a few days to several weeks. This delay, along with the increased demand for gold, is contributing to discounts on gold bullion prices, with dealers quoting prices below the spot price.

What is the significance of the rising lease rates for gold and silver?

The rising lease rates for both gold and silver, especially reaching over 4% for gold and 7% for silver, suggest a shortage of these precious metals. The higher rates indicate that it is becoming more expensive to borrow gold and silver, a key indicator of supply constraints.

How does the current situation affect the market for silver?

Silver is facing similar supply pressures as gold. As industrial demand and concerns about tariffs on imports from key silver suppliers like Mexico and Canada grow, the supply of silver is being constrained, contributing to higher lease rates and potential shortages.

What role does copper play in the market for silver?

Copper's price movements are often seen as a leading indicator for silver, as both metals are major industrial inputs. The breakout of copper prices above a key trendline this week is viewed as a bullish signal for silver, suggesting that silver might follow suit in its price rise.

How does the potential tariff situation affect the silver market in the U.S.?

The potential imposition of tariffs on silver imports from Mexico and Canada could make silver more expensive in the U.S. Mexico supplies 44% of the U.S.'s imported silver, and tariffs on this supply would drive up costs, tightening the market even further.

What is the significance of the premiums on retail bullion products like silver eagles?

Premiums on silver coins like Silver Eagles have dropped significantly, suggesting a low demand for retail bullion products. This presents an opportunity for stackers to purchase physical silver at lower premiums, despite a developing shortage in the overall market.

Why are central banks and institutions increasing their precious metal holdings?

Central banks and institutions are increasing their precious metal holdings in response to fears about inflation, trade wars, unsustainable debt, and an impending financial crisis. These factors are driving institutions to accumulate gold and silver as safe-haven assets.

What is the 'if you don't hold it, you don't own it' principle?

The principle 'if you don't hold it, you don't own it' emphasizes the risks associated with storing gold and silver with third-party custodians. When metals are stored with institutions like the Bank of England, there is counterparty risk, meaning the metals may not be readily accessible if needed.