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Bob Coleman: Decoding the Silver Industry

Tom welcomes Bob Coleman CEO of Idaho Armored Vaults back to the show. Bob discusses some of the shifts and patterns in the precious metals market this year. He explains that the increase in SLV shares by authorized participants does not necessarily reflect an influx of new investors or a rise in silver purchases. Rather, it could simply indicate the moving of existing supplies. Due to low physical volume, borrowing costs, and short positions in the futures market, sentiment levels have been fluctuating and frustrating investors. Bob also identifies factors such as rising interest rates and competition for assets as key contributors to the lack of physical demand. He notes that as the current trading range for metals continues, the potential for a significant breakout or breakdown also increases. Bob advises investors to stick to buying physical metal and paying in cash rather than using leverage or options, as the market often holds unexpected surprises.

Bob reminds listeners to let the information come to them instead of trying to predict the market. He notes that the past months have seen little significant news, leading to a stagnant market. Some investors may not be fully aware of what goes into the digital silver representation of certain financial instruments, presenting a problem for the market. As money shifts away from one asset, it must find a new place to go, and this process takes time to understand. Bob also mentions the current trend of central banks buying gold and how this could impact the market during a crisis. He believes that the silver market, in particular, is oversimplified with an emphasis on paper investments, and that current physical support is growing, but many investors have lost interest due to the absence of news.

Bob also mentions the rise in production costs for silver, potentially contributing to its current price compared to other assets. He suggests that rising costs, specifically for copper and gold, could be future factors to push up gold and silver prices. Bob’s technical analysis of the silver and gold charts leads him to predict that September could be an interesting month for precious metals, as it tends to be seasonally weak for both metals and the stock market. He also speculates on the possibility of informal controls in China to curb imports and support their currency, leading to a disparity in premiums between the Chinese and Western markets. Bob concludes by noting that physical premiums have dropped significantly in the past year, with American Silver Eagles being the only product with enduring pricing power. He believes that this could lead to a balancing of the market and a potential surge in new buyers, and comments on the Silver Symposium’s history of marking low points for silver prices in the past two years.

Time Stamp References:
0:00 – Introduction
0:55 – SLV ETF & New Shares
3:51 – Futures Positioning
6:56 – Borrowing Costs & Shorts
10:18 – Metals & Market Signals
14:12 – Digital Metal Risks
16:58 – Trends & Instabilities
22:09 – Tax Revenue & Miners
25:16 – Silver & Gold Patterns
33:16 – China & The West
36:48 – Physical Premiums
41:40 – Silver Symposium
45:45 – Wrap Up

Talking Points From This Episode

  • The shifts and patterns in the precious metals market, including low demand, rising production costs, and central bank gold purchases.
  • Bob advises investors to stick to buying physical metal and paying in cash, rather than using leveraged or options, as the market continues to hold surprises.
  • September may be interesting for precious metals and notes potential factors that could push up gold and silver prices.

Guest Links:

Bob Coleman is a Registered Investment Advisor since 1992. In 2001, he founded Profits Plus Capital Management, LLC (RIA) and Dollars and Sense Growth Fund. Recognizing the necessity for physical metal storage, he founded Idaho Armored Vaults and Gold Silver Vault in 2008. They are a distinguished and respected leader in the precious metals industry specializing in storage, transportation, shipping logistics, and security.

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