Has The Retail Silver Selling Been Exhausted Yet?

As we’ve mentioned before, there’s been a lot of retail selling of physical silver over the past year. Usually to the local coin shops.

Yet now that the silver price has been over or near the $30 mark for almost the past 3 months, at what point does the retail selling get exhausted? 

At what point have the people who want to sell already done so?

Unfortunately there’s no easy answer. But there are a few clues that can still give us some insight.

First, is looking at the reasons why people are selling. With most dealers reporting that the 2 main reasons are that some people simply need cash to pay bills, and there are also people who have been holding their silver and waiting to sell at a profit.

The Silver Institute estimates that 3.3 billion ounces were purchased for investment between 2008-2023 (an average of 211 million ounces per year - whereas prior to the housing bubble, retail sales were usually less than 50 million ounces per year). So while stockpile inventory levels at the LBMA, COMEX, and Shanghai have come down in recent years, we have seen some of the retail silver come back on the market.

Matt Riley, a silver wholesaler with EF Bullion mentions that he feels the retail selling, while intense, still hasn’t been exhausted. 

Ironically he mentions he’s seen even more selling after the price pulled back from $32. As some investors were concerned the price wouldn’t be going back over $30.

Based on his conversations with local dealers, he says he hears reports of sellers outnumbering buyers by anywhere from 3:1 to 8:1. Although keep in mind that those figures are likely a bit different for the online dealers than the local coin shops. As much of the selling has been done in person, and many of the online dealers have reported lower rates of selling.

(EF Bullion Wholesaler Matt Riley talks about where the retail silver selling has been exhausted)

Ultimately we’ll only know in time when the selling subsides. Although if someone’s been sitting on silver that they’ve been waiting to liquidate when the price nears $30, at some point you would think that the majority of the people who want to do so have already done it.

And as Matt mentions, whenever the selling is exhausted, that’s when he expects the deficit to become a more pronounced issue.

We’ll keep you posted in the weeks ahead. 

Source: ArcadiaEconomics.com