GOLD & SILVER MARKET: Four Interesting Developments

There are four interesting developments taking place in the gold and silver market that precious metals investors should be aware of.  While Americans continue to place all the BETS in the CASINO called Wall Street, via stocks, bonds and real estate, the EAST has been acquiring record amounts of gold and silver.  Furthermore, something interesting seems to have changed recently in the Silver Eagle sales market.

FIRST DEVELOPMENT: Let’s start off with showing the stunning amount of silver India imported in May.  According to Smaulgld.com, India imported nearly 2,000% more silver in May 2017 vs May 2016:

Matter-a-fact, India imported nearly the same amount of silver in May, than they received from January-April.  Also, we can see that May’s 1,473 metric tons of silver imports is 2-4 times more than any of the prior months.  Something has inspired the Indians to import that much silver this past May.

SECOND DEVELOPMENT: India also imported a record amount of gold in May:

According to Smaulgld’s article, INDIAN GOLD IMPORTS ON RECORD PACE IN 2017:

Indian gold imports of 220 tons in May were up from 36 tons in May 2016.

May Indian Gold Imports were the largest one month total in twenty years.

The impact of 220 tons imported into India on the price of gold was de minimus

So, for some reason, India’s gold and silver imports surged in May.  It will be interesting to see what their figures are for June and July.  Please check out the Smaulgld.com site run by Louis Cammarosano.  He does an excellent job covering updates on the Gold and Silver Market.

UPDATE:  Louis contacted me and let me know that there was a bit of mix up with the data for May in the Indian Gold and Silver imports.  His data provider, Sharelynx.com run by Nick Laird mistakenly added April’s figures into May.  Louis sent me two updates to correct the issue.

UPDATE July 12, 2017: A review of provisional June Indian gold import numbers highlighted a discrepency in the May gold numbers. I contacted the data provider and discovered that May import numbers reflected combined April and May imports. The actual May Indian gold import number was 123.694 tons. Gold imports were up 244% in May from 36 tons in May 2016. The provisional June Indian gold import number is 72 tons. Charts will be revised in June’s update.

UPDATE July 12, 2017: After confirming an error in the Indian May gold import numbers, I contacted the data provider to determine if an error had also been made in calculating the May Indian silver numbers. Indeed, the May Indian silver import numbers reflected combined April and May imports. The actual May Indian silver import number was 819.132 tons. Silver imports were up 1,022% in May from 73 tons in May 2016. Indian Imports of 26,335,705 ounces of silver in May were nearly 2X higher than 13,523,500 million American Silver Eagles sold through July 12, 2017. Charts will be revised in June’s update.

I apologize for the error in the figures, but I knew that Smaulgld was getting them from Sharelynx.com, so I didn’t question them. I had have used Sharelynx’s charts and data before. Even Goldcore published the same data in their article, India Gold Imports Surge – First Half 2017 Higher Than All 2016

Regardless…. the actual figures are still much higher than the same month last year suggesting that the Indians are indeed ramping up gold and silver purchases.

THIRD DEVELOPMENT:  Silver Eagle sales have surged in the first two weeks of July.  According to the most recently released U.S. Mint data, Silver Eagle sales as of July 12th, are 1,290,000 versus 960,000 for the entire month of June:

At this pace, the U.S. Mint might sell over 2.5 million Silver Eagles in July.  This recent increase in precious metals buying in Asian and in the U.S. may be an indicator showing that something may be seriously wrong in the markets.  Furthermore, several analysts are forecasting that the stock market is RIPE for a huge correction starting this fall.

It seems like investors are taking advantage of lower silver prices as well as buying more metal due to fear that we may indeed experience a large Stock market correction this fall.  Those who think the price of gold and silver are going to fall lower along with the Dow Jones and S&P 500, haven’t been awake for the past four years.  Gold and silver have already sold off considerably, and are now close to the COST OF PRODUCTION.  However, the Dow Jones and S&P 500 P/E Ratios are in bubble territory.

FOURTH DEVELOPMENT:  It looks like a SHAREHOLDER CLASS ACTION LAWSUIT is now being filed against Tahoe Resources:

RADNOR, Pa., July 12, 2017 /PRNewswire/ — The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against Tahoe Resources, Inc. (NYSE: TAHO; TSX: THO) (“Tahoe” or the “Company”) on behalf of purchasers of the Company’s securities between April 3, 2013 and July 5, 2017, inclusive (the “Class Period”).

Investors who purchased Tahoe securities during the Class Period may, no later than September 5, 2017, seek to be appointed as a lead plaintiff representative of the class.  For additional information or to learn how to participate in this action please visit www.ktmc.com/new-cases/tahoe-resources-inc#join.

The complaint alleges that, on July 5, 2017, after the market closed, Tahoe issued a press release announcing the suspension of the Escobal mining license.  The press release stated, in part, “the Supreme Court of Guatemala has issued a provisional decision in respect of an action brought by the anti-mining organization, CALAS, against Guatemala’s Ministry of Energy and Mines (“MEM”). The action alleges that MEM violated the Xinca Indigenous people’s right of consultation in advance of granting the Escobal mining license to Tahoe’s Guatemalan subsidiary, Minera San Rafael.”

Following this news, the stock price declined from a close of $8.27 per share of Tahoe stock on July 5, 2017, to a close of $5.56 per share on July 6, 2017, a drop of approximately 33%.

The complaint alleges that, throughout the Class Period, the defendants failed to disclose that: (1) Tahoe’s exploitation license of the Escobal mine assets was in violation of the indigenous people’s rights to be consulted; (2) Tahoe was not in compliance with governmental law and regulations; and (3) as a result of the foregoing, the defendants’ statements about Tahoe’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.

As I mentioned in my article, WORLD’S 2ND LARGEST SILVER MINE SHUT DOWN: Implications For Company & Market:

As we can see, the disinvestment of Tahoe Resources by two large European Funds should be a WARNING to investors that things may not be ROSEY for the company going forward. 

Please understand, I am not only painting a negative picture for Tahoe, but rather providing additional information that seems to be missing from the Mainstream press.  Thus, investors are making decisions without the COMPLETE information or story.

Some readers were quite upset with me for providing the OTHERSIDE of the STORY on Tahoe Resources.  However, my intent wasn’t to put out a negative opinion of the company, rather it was to provide information that most investor likely do not know about as it pertains to Tahoe’s Escobal Mine.

With this new class-action lawsuit against Tahoe Resources based on possibly misleading and misrepresenting investors of the problems and issues with the Escobal Mine.  Individuals and shareholders need to learn more about what is going on at the Escobal Mine so they can make better decisions about future investments in the company

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27 Comments on "GOLD & SILVER MARKET: Four Interesting Developments"

  1. Do you by Tahoe when there is blood in the streets???

    • Adam,

      When there is fear (blood) in the streets, yes. However, this was actual BLOOD via deaths from the Escobal Mine. If someone wanted to invest in Tahoe, might be wise to wait a while. Haywood Security Analysts believe Escobal will be shut down for the remainder of year.

      steve

  2. That doesn’t make sense in light of the following Steve..

    “In November of last year, India banned certain cash notes in a bold move to force businesses into the banking system to better harvest more taxes from its livestock. Now, under the guise of “improving transparency” and forming a “common market,” India has begun targeting gold with new taxes, regulation, and incentives for citizens to turn over their undeclared gold to the financial sector.

    Roughly 86% of India’s economic activity happened in cash at the time much of it was banned. Presumably that includes the $19-billion-per-year retail gold industry. Again, it appears that India’s government (central bankers) wants a bigger cut of the action and to better track the private assets of citizens.

    Bloomberg has been reporting that India’s government is teaming up with crony gold dealers to plan a complete revamp of its gold policy – which is always code for “control, regulate and tax.”
    http://www.activistpost.com/2017/06/first-india-bans-cash-now-begins-regulating-new-gold-tax.html

  3. Steve, thanks for the information.

  4. Thanks Steve, regards

  5. At https://smaulgld.com/indian-silver-imports-may-2017/ all I found for a reference as to substantiating the 1.917MOZ silver import claim was “the data provider.” That does not constitute validating documentation; I also watched his video. Steve, who is the data provider? Is anyone besides an unnamed source supplying this figure? Can we kindly get a more solid reference for this? Silver Institute for ex? This is not a discordant note, but a request for improved references.

    • Charles,

      The data provider is Sharelynx.com. Nick Laird that runs the Sharelynx puts out pretty good factual data. By the way, it was 1,473 metric tons, which was a 1,917% increase versus the same month last year.

      steve

  6. A lot of gold importers in India were waiting for clarification on import taxes before they pulled the trigger. I believe the new tax took effect on July 1st.

  7. Steve,

    I can understand the massive increase in silver eagles sales as the price has been trending lower making it an even greater buy. India, on the other hand is a mystery. What is happening/happened in May in India to cause such a massive change? Is it specific to India or representative of something else going on?

    You sure hit the nail on the head with Tahoe. If I was an investor, I would be one hot ticket but all paper, stocks, bonds, etc., are part of the ponzi I avoid like the plaque. I highly suspect there are many more mines in third world countries that are guilty of some of the same crimes and purchased their rights with well placed bribes. Their day may soon be at hand. A good reason to stick with the physical in hand.

    Thanks for another great post.

    SteveW

    • The locals who live in the surrounding area of the mine and the workers, are very angry with Tahoe for breaking so many promises and ignoring agreements.
      This current very effective blockade action has been building for years. Ever since the go ahead was “given” to Tahoe to proceed with mine development, against the wishes of the locals.
      The mine blockade is so effective that Tahoe has had to air lift diesel fuel, by way of chartered helicopters, to keep the mine water pumps operating. If the mine floods out, it could cost too much to bring back into production.

  8. The gold purchases in May have been made in anticipation of the introduction of the new GST tax that impacts gold now (3 %). But India is back on the gold market in 2017 regardless, this article sums it up : http://www.business-standard.com/article/markets/gold-imports-may-hit-5-year-high-in-2017-117070800626_1.html
    We have covered the subject in French here : https://or-argent.eu/inde-revient-en-force-sur-marche-or-2017/

  9. This whole episode could be a psy – op to shake out shareholders from owning a stake in a premium silver mine. The published comments from Escobal’s security head sure seem fake.

  10. physicalgoldandsilvernotfiatanything | July 13, 2017 at 6:45 am | Reply

    You forgot to add, “…place all the BETS in (CRYPTOCURRENCIES like fiat Bitcoin).” The real reason for the increase in silver sales in July is the silver
    price went down. Low prices increases demand, nothing else.

  11. I’m buying Maples. I believe U* . Gov will confiscate US tender Eagles. They may not include Maples or Harmonics etc when the jack boot comes down. What do you guys think of my approach? I don’t mean to be inflammatory.

    • DisappearingCulture | July 13, 2017 at 9:51 am | Reply

      I doubt there will be confiscation. But if so they would get Maples as well. Silver has a low melting point. It wouldn’t be hard to melt .999 to a blob of metal. Then it isn’t a coin.

    • Please explain why would they confiscate Eagles and not Maples or Harmonics? An ounce of gold is an ounce of gold.

      • I always understood that Depression-era laws (still on the books) classify all gold coins minted from 1933 on as “bullion” subject to confiscation. I suspect it’s no accident that premiums have dropped so low on the older, numismatic coins. The smart money will probably load up on these.

        Since silver is not a monetary metal, I can’t understand why it would be confiscated any more than copper or lead or platinum.

        • DisappearingCulture | July 14, 2017 at 6:57 am | Reply

          “Since silver is not a monetary metal, I can’t understand why it would be confiscated any more than copper or lead or platinum.”

          American Silver Eagles have a legal tender value stamped on them…as do Maples

    • Hi JD,

      I have also wondered about this as well. Moreover, the nominal “dollar” amount stamped on the US Eagle or Canadian Maple states that the coin is worth much less nominally than the melt value of the silver or gold. If you have purchased $1000 of silver based on silver spot price, but then you count up your “stash” it only is worth $200 nominal face value. What to do about the difference?

      I still think it is only a very remote chance the US government would try and pull a “Rupee” and recall all fiat dollars and issue a convenient “OBTW”, the US silver and gold eagles are “legal tender” also (especilly since you PM’s bugs have adamantly admitted that they are “real money”), so we will be confiscating those also. A very “quaint” but extremely hypothetical argument here which might argue for buying Maples instead of Eagles, but in view of the government’s history of treachery, no possibility should ever be overlooked or dismissed.

      I think especially in view of FDR’s 1933 gold $20.40 /oz confiscation and sudden revaluation at $35 a year or two later, the public will NOT submit to confiscation of their physical gold. The type of person who holds gold is already well aware of that piece of history, which is why they own physical in the first place.

      However, my biggest concern is that the government will claim that since you have purchased PM’s which you refuse to turn over/redeem, the government will just put a lien on your assets like your house or car until you fork over what they claim you must redeem. “Silver” Asset Forfeiture 2.0

      • Houses and cars are not “assets”, they are tax vectors with negative appreciation (in most cases). You need a place to live and a way to get around, but you don’t need a car or a house if they are too expensive.

        Don’t use the documented monetary system to buy pm’s. Cash, in-person, only.

        What if the central gov does not have the confidence or sufficient fear of the public to enforce a pm seizure? They can drop three zeros from the US Dollar while “fighting money laundering” and “increasing confidence in the currency”. Restrict cash withdrawals to a week’s pay at minimum wage per 30 day period per person (multiple accounts combined) while Guaranteeing the availability of your account balance in the new currency (crypto-enhanced cash card) at some time (pretty soon!) in the future after the crisis passes. Tax Deferred Accounts- same restrictions with NO payouts for people under 70.5 years old. There will be a period when pm’s will be the only money for real buying (food & rent will be in gov’t promises, with food diminishing in quality and availability). You will need pm’s in addition to fuel coupons and next-gen fiat money to get fuel from an official station (or bricks of the largest denominations to buy from the guy with 5gal cans, like in Baghdad in 2004, Argentina 2000, Venesuala now). Got bicycles with sturdy locks? Extra walking shoes with good socks?

  12. Don’t pay the higher premiums for silver maples or any silver coin, as they cannot be confiscated given you can MELT them down in bars at any local big dealer. You are wasting your money paying higher premiums for gold/silver, as they can be melted down instantly.

    • I recently bought a quantity of 90% US dimes (20% Mercury!) at a premium below the lowest cost bullion coins. The US pre-1965 90% circulated coins will be the best small money when everyone knows paper money is nearly and soon worthless. A minimum wage job in a West Coast City delivers about 10 silver dimes an hour on payday at the current wage/silver prices (plus tips, if you are so lucky). Silver kept Germans eating in the post-GreatWars economic disasters.

  13. I wonder who is really buying gold and silver ? , after introducing so many restrictions for people , maybe the Government is buying most of it , they know what is coming , they work for “Big Brother” after all.

  14. Hello Steve,

    Rather new to doom but have been studying your work on EROI, petrodollar, and debt. All very impressive and somewhat disemboweling, but I get it, or thought I did, until I read your comment that when you referred to deflation you meant only assets. “Deflation in everything you own, inflation in everything you consume”

    Question is, how is this disparity possible? Everything is connected, and it seems to uneducated me that diminishing net energy and the resulting super debt would also lower the price of goods, food being the primary concern here of course. Assuming it exists, mad max being off the table. I.e, using your mattress bucks to avoid starvation for 5-10 years after collapse.

    Using such bucks to buy pm in the present seems quite risky, as grossly prohibitive capital controls on pm seem likely even if manipulation ends. Just for spite if nothing else. Understood that pm not part of monetary system like 1930’s but,… They hate the stuff. Cash risky also, as in India. May just keep in the bank unless understand this better. Just wing it please, if nothing else. What situation with cash is most likely, and why?

    Put this in next post if would be better.

    Many thanks

    • Boman,

      Let me clarify my DEFLATION SCENARIO.

      I see massive DEFLATION in STOCKS, BONDS & REAL ESTATE values. That is a given. However, I also see falling commodity prices too. Especially metals like copper, zinc and lead.

      However, one of the only rising asset classes will be the precious metals. The Falling EROI is gutting the entire system. Thus, the value of a barrel of oil is falling. Some believe that falling oil production would generate rising prices, but they fail to realize that the NET ENERGY of a barrel of oil that makes it to the market is what CREATES MONEY. So, if the NET ENERGY IS FALLING from a barrel of oil, so is the amount of MONEY to bid it up.

      This is why we are seeing falling oil prices. Not really due to supply and demand, but more the QUALITY OF THE OIL does not allow a high price. Matter of fact, I see the oil price trending lower, even though we could have short-term supply and demand spikes.

      Gold and Silver assets values will rise because there are TRULY the few STORES OF WEALTH in the world. The public in owning STOCKS, BONDS and REAL ESTATE have been BAMBOOZLED into believing those are STORES OF WEALTH, whereas they are ENERGY IOU’s.

      steve

  15. These “trailer park” so called “shareholder rights” law firms pounce in numbers once one firm files an action looking for a plaintiff. They are really just looking to skim the company for a green mail payoff. Anybody know what the status is of the class action lawsuit against the Gold Banks??

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