Silver retailers are scrambling to find supplies for retail buyers

(Reuters) – A social media-driven retail investor frenzy on social media has left U.S. dealers in Singapore looking for bars and coins to meet demand.

Silver prices extended the rally on Monday to a eight-year high as small investors answered calls on social media last week to buy the metal to raise prices. Retail investors cannot access the silver wholesale market directly, so they have bought bars and coins.

“There is a massive shortage. We will be completely exhausted if it continues like this: the first time we opened our company in Singapore seven years ago, ”said David Mitchell, CEO of Indigo Precious Metals.

Some customers sold gold to buy silver, said Gregor Gregersen, founder of Silver Bullion Pte Ltd, another distributor in Singapore.

“There is a definite shortage of popular developing silver coins (especially American coins),” he said. “Still, we can still get 1,000 oz delivery bars with almost the same premiums for now.”

US bullion broker Apmex warned of delays in processing silver transactions due to rising volumes.

Other U.S. distributors, including JM Bullion and SD Bullion, warned customers of delivery delays of five to ten days. Everett Millman on coins in Gainesville, Florida, said they expected delays in shipping, perhaps until mid-March, some products like Silver Eagles and Silver Maples.

While the rapid rise in demand has hardened supplies, there is a lot of metal around and delays should decrease once the metal can be shipped where it is needed, dealers and industry experts said. .

Kevin Rich, global advisor to Perth Mint’s Australian currency gold market, said that while coin and bar dealers may see some supply constraints and therefore charge higher premiums on these products, the currency does not foresee any such problems.

There is enough airline traffic to ensure that supply can move, he said, unlike last year, when lack of cargo capacity disrupted gold markets.

“In the short term, stocks may be depleted as it takes a long time for shipping, but the overall supply is wide,” said Peter Fung, chief trading officer at Hong-based Wing Fung Precious Metals. Kong.

About a billion ounces of silver are produced and consumed each year, and supply has been in surplus for most of the past decade, Metals Focus consultants said.

“There are still no signs of a wider physical compression on the silver and we wouldn’t expect any at this stage,” said Frederic Panizzutti, CEO of distributor MKS.

There were more silenced purchases in China and India, the main Asian consumers of physical bullion.

Chinese investors have piled on the futures market and the shares of mining companies, but dealers said the rush had yet to translate into physical constraints.

Indian buyers often favor gold as an investment.

“In contrast to what is happening in other parts of the world, silver is considered more of a consumption, rather than an investment, in India,” said the head of the bullion division of a silver importing bank with headquarters in Bombay.

According to Metals Focus data, India and China typically account for between a quarter and a third of global demand for retail silver investment products such as bars and coins.