Have you ever compared websites to see which supplier currently has the best prices for precious metals? I just got done with such an experiment and I noticed something very interesting. On Kitco.com, there is a bold message (printed in red) saying:
IMPORTANT NEW NOTICE: Demand for bullion products has increased significantly in recent days. As a result, we may experience delays in supply and possibly delays in processing and shipping by our vaults. We apologize for this inconvenience and will do everything in our power to service your orders as quickly as possible. While cancellation fees still apply, prices are guaranteed regardless of the length of the delay. We remain committed to providing you the best service no matter what market conditions prevail.
At the same time, on the APMEX.com website (American Precious Metals Exchange) there was this notice:
So, my questions are: why is gold trading at $810 and change if the demand is so strong? If gold is so expensive, then why is the US mint not selling all they can at the current price?
My suspicion is that there is a tremendous unwinding of leverage in the gold market causing a short term price drop that is neither fundamental nor warranted. When was the last time a confrontation between Russia and the US caused the price of gold to drop? When was the last time rising inflation numbers caused gold to drop?
The current environment for gold and oil investments are similar. This is a wonderful opportunity to buy gold (and energy) investment vehicles.
Disclosure: Long gold and precious metals.