By Jeff Clark, Senior Precious Metals Analyst
You’ve undoubtedly read about the dramatic increase in demand for gold and silver bullion products since the big correction two weeks ago. Supply has gotten tight, premiums are rising, and inventory is hard to come by, especially for certain silver products.
But it’s worse than you may know. Many of these reports come from the retail side of the business, including those from sovereign mints. This information is indicative, but more important is the activity among the wholesalers. It’s possible the retail trade is just experiencing a giant bottleneck, which would come with a different set of conclusions than if behind the scenes the wholesale industry is seeing net sales.
So we decided to talk to the wholesalers directly: the bullion banks, traders, and refiners. These entities typically deal in wholesale trades only, exclusively in large amounts, and solely with major entities that include dealers and investment funds.
There was a catch, however. In speaking with these entities, we realized one thing: they won’t publicly reveal themselves. So we can’t tell you who they are, and in fact, they wouldn’t speak by phone, only in person. This means you have to take our report on trust – or not – as you wish; we simply don’t have permission to reveal names (we did ask). We can say this, though: we spoke with almost all the major ones.
Here’s a summary of what they told us occurred during the week of April 15-19 (the 15th was gold’s 9.3% selloff)…