Monday, September 29, 2008

Unprecedented Shortage of Metals

The evidence of a global shortage of physical silver continues to grow, but now gold is getting in on the act too. Spot Silver closed at around $13 on Friday. Someone offered me $1650 for a 100 ounce bar of silver, I declined.

Gold and Silver investments director Mark O'Byrne said the supply of gold and silver
available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.

‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.


‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”

According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.

However, he said that minimum transaction sizes in this market were out of reach for most retail investors - at approximately $350,000 for gold and $135,000 for silver.

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