BULLION BARS AND COINS

Significant savings can be made on Australian gold and silver bullion coins from The Perth Mint thanks to the introduction of lower thresholds for volume price breaks.

For example, silver investors previously needed to buy 100 or more 1oz coins to receive a saving of $1.50 per coin. Under the new, lower thresholds, they can now take advantage of the same saving on an order of just 20 coins.

Even more remarkable, the saving of $3.50 per coin that previously began on orders for 500, now applies to purchases of only 100 or more 1oz coins.

The new volume thresholds mean similar savings also apply on 1kg, 10oz, 5oz, 2oz and 1/2oz coins, making it more affordable than ever to stack silver in any of these popular sizes.

There’s equally exciting news for investors purchasing 1oz, 1/2oz, 1/4oz, 1/10oz and 1/20oz gold bullion coins.

Incremental savings now apply on volumes of 5, 20 and 50. As an example, buyers of 1oz gold bullion coins will save around $17 per coin when buying just 20 or more.

Comprehensive details about the price per coin under our new volume pricing structure are available on individual product pages at www.perthmintbullion.com.

The Perth Mint has boxes, trays and 20-coins rolls for customers taking advantage of volume discounts.

VIDEO OF THE DAY

Over the last 12 months this stacker has amassed more than 500oz of silver. Celebrating the stack’s first anniversary, this clip explains the financial reasons he got into silver stacking and how he got “creative” when it came to finding ways to afford more coins. From junk silver to the world most beautiful bullion coins (with an impressive 1 kilo Lunar Dragon centrepiece), it’s an impressive horde that’s targeting 3,000oz of silver by retirement.

IN THE NEWS

Expect shortages of precious metal coins worldwide should investment demand jump dramatically as a result of another financial crisis.

According to The Perth Mint’s Bron Suchecki, probably less that 2% of people started buying precious metals during the financial crisis in 2008. The result was rationing of coins by mints!

In a telephone interview with the Financial Survival Network, Bron questioned what would happen should serious, mass market demand like that seen at the end of the 1970s re-emerge.

Despite better preparedness among mints generally for this possibility, Bron told Kerry Lutz there remains a huge potential production bottleneck problem that investors would do well to be aware of.

While coining is a fairly straightforward process, he said, the manufacturing of precious metal blanks was a much more complex and time-consuming process. As a result, a lot of mints don’t have the scale or expertise to become involved in this aspect of minting and were therefore reliant on a handful of operations for supplies.

Kerry Lutz revealed that the U.S. Mint, for example, relies on just three suppliers, including The Perth Mint.

Bron’s message to investors? If you foresee another major crisis, buy now to avoid the certainty of increasing premiums as coins become scarce.

Listen to the full interview here.

Gold futures declined overnight in New York by US$1.20 to settle at US$1,576.20 an ounce. Silver slid 23 cents to $26.811 an ounce.

REASEARCH AND ANALYSIS

Is there a good month of the year to sell silver and an equally favourable month in which to buyback? In this paper I investigate the seasonality of silver and deliver a warning to those tempted to rely on the next seasonal chart they come across.

Download The Perth Mint Treasury paper Silver Seasonality (pdf 348kb)

WHAT OTHERS ARE THINKING

By Alex Cowie, Editor, Diggers & Drillers 

For years, industrial uses of silver dominated the silver market. It’s used in things like solar panels, electronics, photography and jewellery.

But now, silver is becoming an investor’s metal.

Private ownership has doubled in the last five years to 2.2 billion ounces.

Today I’ll show how this investor demand will keep pushing up the silver price.

After the big cracks started to appear in the financial system in 2007, the silver market changed.

It took silver away from industrial users. And since investors flocked into the silver market in 2005, Aussie dollar silver has quietly gained an average of 22% a year.

But there’s more in store for silver. Mints can’t keep up with demand. The Perth Mint recently emailed its clients to say: ‘Demand is currently at unprecedented levels, and we have been inundated by high levels of web and telephone traffic from clients all around the world.’

And when I chat with silver miners I keep hearing the same thing: Refiners and miners are ‘extremely keen’ to get their hands on more metal.

So what does this mean for the future price of silver?

We are rewriting the rules by turning silver into an investor’s metal. Instead of the price being a measure of its value in manufacturing, the silver price is becoming a measure of how big a mess the global financial system becomes.

Silver’s only gained 8% in Aussie dollars this year. But silver’s big years – where it’s had gains of 33%, 43% or 58% – have historically followed slow years like this one.

And the silver market is ready for a big jump. I’m convinced silver could rise from $33 to $50 an ounce next year.

Even if silver only continues to rise at its current rate of 22% a year, the price would be $203 an ounce by 2020. And that’s a very conservative forecast.

If you think that sounds outrageous, bear in mind that as of September, the silver price had increased 10-fold in only 10 years.

The case for investing in precious metals, especially silver, has never been stronger than it is today. In fact, it’s one of the top resource plays I recommend for 2012…

Link to Will Silver Break Through $50 An Ounce In 2012?

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WHAT OTHERS ARE THINKING

There’s plenty of opinion out there on this question, but most advisors appear to recommend somewhere between 5% and 30%.

Kevin McElroy of Wyatt Investment Research, on the other hand, isn’t inclined to put a hard and fast number on it.

He suggests there’s a ‘simple metric’ that will ensure you have the “bare minimum of gold or silver that you might need in a worst-case-scenario.”

Here’s Kevin’s rule of thumb for people considering this issue:

“Look at your budget for your monthly living expenses. Stuff like food, water, transportation, clothes, heating oil, etc. Add it all up to find your average monthly cost of living. Multiply that number by six, and then buy a mix of gold and silver bullion equal to that six month estimated cost.

Why six?

Assume we enter into a real life, 'as seen on TV' currency crisis, with food riots and long lines at the gas station, wheelbarrows filled with cash to buy a loaf of bread, etc. In this circumstance I estimate that at the VERY least, you'll want to have enough gold and silver to cover six months' worth of your living expenses.

Six months would give you enough time to figure out the next step - whether that's moving in with relatives across the country, or finding a new home in a different area - even moving overseas, or starting a large garden or small business that would be in demand in the aftermath of a currency crisis.

Hopefully, six months of living expenses isn't more than 5% of your net worth - it's probably also an affordable amount to get started with.

Anything more than that six month supply is extra security for your bottom dollars.

I wouldn't advise putting more than 30% of your net worth in gold or silver. That's way too many of your eggs in one basket.”

Read Kevin McElroy’s post A Gold and Silver Buyer's Guide Part II in full here.

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