Will Silver Bar Shortages Lead to a Tipping Point?


"Reports of silver bullion shortages continue to grow."

Reports of shortages of silver bullion continue to grow. While there are no widespread shortages in this area and dealers with extensive supplier networks (mints and large refiners) are not experiencing difficulties sourcing bullion inventory, it would be wise to keep an eye on this.

Reuters reported shortages of 1 kilo gold bars in Asia last week. Sprott Asset Management reported that it was experiencing difficulty sourcing 1,000-oz. silver bars. Sprott said they were concerned about the "illiquidity in the physical silver market" and said delays in being able to source physical silver highlights the "disconnect that exists between the paper and physical markets for silver."

Zero Hedge reported that Bullion Vault, the digital gold provider, had run out physical silver inventories in Germany (and possibly elsewhere) and was advising clients to buy silver from other sources.

Zero Hedge also reported yesterday that some smaller bullion dealers in the U.K. were having difficulty sourcing all silver bars and had delayed delivery of silver bars (including 1-kilo silver bars) until February.

This comes at a time when the U.S. Mint has reported huge demand in the first two weeks of January for their very popular U.S. Silver Eagle 1-oz. bullion coins.

A recent report by analyst Adrian Douglas of GATA warns of forthcoming shortages of gold and silver bullion coins and bars, and that a "tipping point" will soon be reached that could lead to a COMEX default and a short squeeze which leads to much higher prices. Douglas himself has shown in Le Metropole Café how Comex silver inventories are shrinking and are not far from ten-year lows.

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