October Silver Eagle Sales Set A Monthly Record – Dave Kranzler

TND Guest Contributor:  Dave Kranzler |

1.4 million silver eagles were bought by investors in the last two days of October, setting a new one-month sales record (real analysts do not count January 2013′s 7+ million tally because the Mint suspended sales in early December 2012, effectively pushing December’s demand into January).   5,790,000 silver eagles were snapped up (LINK).  This was 88% more than October 2013.  38% more gold eagles were sold in October than in October 2013.

Contrary to the false narrative being spread by the financial media, the manipulated sell-off in the precious metals using fiat paper futures is triggering record investment demand for physical gold and silver.   In chatting with some coin dealers around Denver this past week, they all said that there were having trouble keeping silver eagles in stock.

While there’s no way to predict how much longer the Fed and its agent banks can keep pressure on this sector by bombarding the market with paper gold and silver, the demand for physical metal is intensifying here and in Asia.  Gold is being withdrawn from the Shanghai Gold Exchange at a torrid pace and recall that 90% of the physical silver has been removed this year from the Shanghai futures exchange (LINK).

With the above ground physical supply of silver disappearing from sight, at some point investors will come to realize that silver in the ground is a lot more valuable than it is being valued in the stock market currently.   I have written a new research report on a silver explorer/producer that I believe is currently undervalued even with the price of silver at $17.  Furthermore, it is significantly undervalued relative to the amount of silver it will likely uncover on the properties it already owns.  You can access this report by clicking here.

The Company has been ramping up its mill capacity and production during Q4.  In my conversations with management, it is clear that they are working to exceed current production and sales guidance for Q4.   They have also been drilling on a property adjacent to their existing mine (management thinks it could be a “twin” of the current property) and should be releasing results sometime in November.  If the results are good, which I expect, and if silver starts to recover, the stock will spike.

This is a “de-risked” silver producer which went free cash flow positive during its 3rd quarter, will ramp up its production significantly next year and has one of the lowest cost per ounce cost structures in the world for a silver producer.  It makes money down to $12/oz. silver!  We added to our position in the fund during the last two days.

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About Dave Kranzler:

 I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics.  Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.

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