Silver has had a torrid time in recent months and has fallen nearly 40% since July. In less than four months, it is down from $21.40/oz to $15.45/oz today. Silver is 70% lower since reaching over $49/oz in April 2011. The selling has accelerated in recent days and silver has fallen from $17.20/oz on October 28 and is down 12% in the last week.
There is blood in the streets of the silver market with futures speculators long silver, again having their heads handed to them on a plate and incurring sharp losses. However, the silver sell off has again seen a global scramble for physical silver.
Silver in USD - Year to Date 2014 (Thomson Reuters)
In recent days, there has been a global scramble to acquire silver bullion coins and bars after the price falls according to Reuters. Maple Leaf silver coins are difficult to acquire according to bullion dealers, with the Royal Canadian Mint on allocation from September. There is a concern that supply times will increase and premiums are likely to jump according to Reuters.
“A tumble in silver prices to four-year lows has triggered a global scramble by consumers to purchase silver coins and bars, as the spread between the price of the metal and gold reaches its widest in five years.
Retailers and distributors in Asia and the United States said they were struggling to get supplies of items such as Canadian Maple Leaf silver coins.
While demand for silver has been strong over the last few months, retailers say buying interest soared in recent days as the metal fell towards its lowest since 2010, along with gold.
Demand for silver coins and bars accounted for more than a fifth of total demand in 2013, according to a report by the Silver Institute. A sustained jump in demand should support silver prices, currently at just over $15 an ounce.
The price of silver is currently around 74 times cheaper than gold - the biggest spread since early 2009. Due to its greater affordability, silver sales tend to outstrip gold in volume terms and attract a lot more retail buyers.