Many of our clients have brought up the idea of cutting up their Gold bars to periodically sell in smaller denominations. Logically, it makes perfect sense as it is actually a smarter way when it comes to liquidating your holdings. In fact, it is part of a strategy called Dollar-Cost Averaging for selling. By splitting up your holdings equally and selling them in fixed periods, you get an average price over a period instead of liquidating all the Gold bars at one go, allowing you to better manage the price risks.

Another situation which may require you to sell a portion of your Gold bars is when you are rebalancing your portfolio. When the value of your Gold increases and outweighs the allocation you have intended for your portfolio, you will need to sell some of your Gold to ensure the portfolio is balanced accordingly.  Nonetheless, we all know that it is definitely not advisable to cut your Gold bars for the purposes mentioned. Once the Gold bar is cut, it loses its value as an investment grade bullion bar and will be treated as scrap gold (for melting), resulting in a lower buyback price.

With GoldSilver Central, there will always be solutions to achieve your intended portfolio. You can sell the intended portion of your Gold holdings through means of Exchange-Traded Funds (ETFs) or Pool-Allocated contracts. Pool allocated contracts on GSC Live! for Gold are available in mini contracts (0.1oz per contract), providing you with the flexibility that you need. You can also convert your physical Gold bars into pool-allocated contracts on GSC Live!. A Gold bar weight 1 KG (32.148oz) can be converted into 32 of the 1oz contracts or even 321 of the 0.1oz contracts! With these solutions made available to you, “cutting” up your Gold bars is now possible without having you to suffer any unnecessary losses during the process.

Do connect with us via a call at +65 6222 9703 or email to enquiry@goldsilvercentral.com.sg to find out more about “cutting” up your Gold bars & selling them!

Sin Pong

In times of volatility, the charts and price movement we see blink red and green tirelessly, like a never-ending fast-forward traffic situation. Ever slipped your finger and missed the buy/sell within seconds, for whatever reasons (could be internet connection lagging, could even be that you were taking too long to ponder if you should press that button!) that caused you to miss the perfect price level, must be causing you to secretly curse and swear about how you should have had gotten that price level instead of missing it.

Ever saw a piece of precious metal and fell in love with it immediately, and wishing you could own it someday? Especially so at a price lower than the current price, or at a price that is lower than the average price! Well, you can set a Price Alert to be notified when the price has reached your desired level!

For example, if you’ve always wanted to own a piece of the Argor-Heraeus Kinebar Gold Bar 10g, and wished that you can someday own it when it costs S$820. You can set a price alert on our webpage by heading over to the product’s page (in this example, it would be the Argor-Heraeus Kinebar Gold Bar 10g), click on the “Price Alert and History” tab, and click on “Setup Price Drop Alert”.

Enter the price level you wish to be alerted at, and your email address for the price alert to be created.

Did you know? You can also set price alerts for sale of your pre-loved jewellery to us. If you’ve a rough estimate of the finesse, purity, and weight, you can set an alert to notified when prices are high and worthy of your preloved jewellery. Click on “Alert Me When Prices are Right!” to set your price level to be notified.

Have a piece of pre-loved jewellery you’d like to sell off? Or is there an item you have in mind, with a specific price tagged to it? Connect with us via email at enquiry@goldsilvercentral.com.sg or WhatsApp to +65 8893 9255 to find out more about Price Alerts and how to use them to your favour!

Do watch this space for our next article sharing on how to set alerts and notifications using the GSC Live! application. Till then, cheers and stay safe!

Suzane

“Why are your Gold bars and coins cheaper than some jewelers and online retailers?” “Are they pre-loved or defected items?” “What are the differences?” These are questions that we often hear from our retail clients. Today, we will be sharing some information with you on the questions commonly asked by our retail clients, especially when visiting us for the first time:

1. It may occur to you that the difference in the prices offered by us and others within the same industry (jewelers, bullion dealers, online retailers, etc.) can be quite vast. Well, this is because a mark-up is included in the products offered by traditional jewelers as it involves crafting and design of jewellery. Most clients who visit traditional jewelers are usually looking for gifts and are willing to pay more for the jewellery piece with the design they adore. In contrast, clients whom purchase from authorized bullion dealers like GoldSilver Central are mostly Precious Metals investors. Therefore, the prices we offer are competitive, as we understand that all physical items are priced at Spot + Premium, and our mark-up is actually the premium! Essentially, premiums are also the cost of fabricating and shipping of the items from the refineries to our retail store. One of our clients shared that they had managed to save more than S$300 by purchasing a Canadian Maple Leaf Gold Coin 1oz from us as compared to purchasing from a jeweler!

2. LBMA accredited refineries and mints such as (but not limited to) Argor-Heraeus, Austrian Mint, TianXinYang, Perth Mint, and the Royal Canadian Mint had authorized GoldSilver Central as the authorized distributor of their bullion products. Having had built a good working relationship with the refineries and mints had allowed us to enjoy better premium rates, and we are then able to sell at a lower price to our clients. Other sellers who are not the authorized distributor may had obtained the bullion from a wholesaler or even a 3^rd party, incurring higher costs on top of the premium, which is also why our prices are more competitive compared to other retailers/sellers.

We hope the above sharing had answered your question as to why we are able to offer products with attractive premium.

Do connect with us via a call at +65 6222 9703 or email to enquiry@goldsilvercentral.com.sg to find out more about physical bullion purchase.

Evonne

We have come to the end of 2021, let’s look back at how this year started. Many were hopeful as they believed that the Covid pandemic that has “washed out” 2020 would be over, and with Gold prices setting a new high last year, many expected an even higher price set this year. So how did Gold fare this year?

Gold set a high for the year on 6th January at US$1960 per oz before heading down and reached a low of US$1680 three times this year (8th Mar, 31st Mar & 9th Aug).  Gold is enroute to close the year at a loss of around 5.5% based on the opening price on 4th January 2021. Gold didn’t perform as well as what we have seen last year (a gain of 25%). However, Gold’s average price this year is the highest we have seen in the history of Gold. Surprise, surprise! This year Gold’s average price is around US$1798 (as of 29th Dec) compared to last year’s average price of US$1769. How will Gold fare in 2022?

Precious Metals Prices in 2022

With a backdrop of huge stimulus by most Central Banks, near to 0 or negative interest rates and highest inflation rates seen in more than 30 years; we believe this will provide good support to precious metals prices in the longer term as we don’t expect this to change within the next 3 to 5 years. We expect precious metals prices to be volatile next year as Central Banks will try to reign in the inflation caused by the stimulus by ending their bond buybacks program and increasing interest rates. This will create volatility in markets and inflation caused by unprecedented stimulus will unlikely be curbed within the next few years. Real interest rates will still remain negative even if the Federal Reserve raise interest rates 3 to 4 times next year due to the high inflation rate.

Moreover, Central Banks who usually wouldn’t buy Gold as part of their reserves might look to buy more Gold amidst this period of uncertainty. Singapore who hasn’t bought Gold in more than 20 years, has bought 26.3 tons of Gold this year. Thailand, Brazil and Japan for example, have bought Gold this year too. We expect more Central Banks to look to Gold to form part of their reserves in 2022.

Hence, we might see Gold testing the price level US$2000, Silver testing US$30 levels and Platinum testing US$1200 levels next year. Buying precious metals when prices pull back or buying using Dollar Cost Averaging strategy are best ways for accumulation. Use the volatility in your favour and remember, don’t put all your eggs in one basket! Other asset classes like equities, currencies, cryptocurrencies, properties are also important to look at in order to build a robust portfolio!

Gratitude

2021 also marks our 10th Anniversary and on behalf of the team in GSC, we want to say a big thank you to all our esteemed clients, business partners, family and friends for your unwavering support, encouragement and for being part of our golden journey.

May this holiday season be a good time for all of us to spend time with family and people who matter! We are thankful that borders have re-opened with Malaysia and many of our colleagues, friends and clients can finally spend time with their family in person.

Here’s to a better 2022 and many more good years together! Happy Holidays and Happy New Year!

Brian Lan, GoldSilver Central’s Managing Director

Read English Version

身在贵金属行业的我最常被问到的问题之一就是我该投资哪一个好。相信这也是很多刚开始接触贵金属的投资者们心中有的一个疑问。很抱歉我得老实告诉你，这个问题没有一个标准对的答案。不过俗话说的好，做生不如做熟。套用在投资上，你投资一种自己比较熟悉的产品绝对比道听途说而去投资一种自己完全不了解的商品来的好吧？

在亚洲尤其是东南亚国家，相信黄金是大家都比较熟悉的一种商品。它可以是以实体的首饰，摆设，金币，金条等方式存在我们身边。也可以是以虚拟的金融工具和金融衍生产品(derivatives)如股票，期货，交易所指数基金(ETF)等形式被用于在各大金融机构和交易平台上进行买卖。

如果你现在正考虑投资一笔资金在贵金属上，那我会推荐你从黄金开始。不是说其他的贵金属如白银铂金甚至钯和铑等不好，而是说到投资我们应该考虑两个重要的因素: 流动性(liquidity)和买卖差价率(buy/sell spread)。就这两个关键点来切入的话我个人认为投资黄金是对新手比较有利的。毕竟谁也不想投资了一样商品然后发现很难卖出去或市价的涨幅赶不上买卖的差价率吧？而黄金很好的解决了这两个难题。没有一间金店当铺或经销商如我们会拒绝购入你的黄金（除非你透过非法途径获取或你所购入的黄金的制造商被列入国际“黑名单”）。而最保值的投资用1公斤金条的买卖差价率大概是在2.20%左右。根据近几年的金价涨幅表现来看，追上这2.20%不是一个太难达到的目标。

当然凡事没有绝对，这世界上没有稳赚不赔的生意。如果你买入的是实体黄金如金币或金条等，那可以一直持有并保存到金价回升至你转亏为盈。如果您购买了虚拟黄金并面临价格暴跌的动荡市场，您可能会面临账面上的亏损或者在最坏的情况下被强行平仓(俗话说被砍掉，直接血本无归欲哭无泪惨兮兮)。

当你比较熟悉投资黄金以后，慢慢的你可以多了解其他的贵金属从而购入来多样化你的贵金属投资组合(portfolio diversification)。因为不同的贵金属在不同的时期，市场需求等因素下表现也是会不一样的。不过我们一直秉持着合理投资这个信念，所以并不建议你把全部多余的资金都投入到贵金属里哦。

今天暂时就分享到这里，我们下回见！有什么疑问欢迎在我们的留言区留言并一起讨论哦。

Maya

阅读中文版本

One of the most frequently asked questions I get in the precious metals industry is – which precious metal should I be investing in? I believe this is also a question that is constantly on the minds of investors who are new to precious metals. Well, I’m sorry to have to tell you that there is no right or wrong answer to this question however, as the saying goes, better the devil you know, than the devil you don’t. This saying applies to investments as well! It is definitely better for you to invest in a product that you are familiar with, than to invest in a product that you don’t understand at all, agree?

In Asia, I believe that Gold is a commodity that everyone is more familiar with, especially in Southeast Asian countries. Gold exists in many forms and commonly appear as physical jewellery, decorations, coins, bars, etc. It is also structured as financial instruments and derivatives such as stocks, futures, and Exchange-Traded Funds (ETFs) and is traded across major financial institutions and platforms.

If you are considering to invest into precious metals now, then I would recommend for you to start off by investing into Gold. It is not that other precious metals such as Silver, Platinum, or even Palladium and Rhodium are not good however, we should always consider two key points when we invest – Liquidity and Buy/Sell Spread. Personally, I think that investing in Gold is more beneficial for investors who are new to precious metals. Afterall, no one would want to invest in a product only to find out later that it is difficult to sell or that the market price cannot keep up with the spread of buying and selling, right? Well, Gold is the solution to these two problems. Goldsmiths, pawnshops or bullion dealers such as GSC will definitely buy your Gold(unless it has been obtained through illegal means or the refinery/mint of the Gold you bought is “blacklisted” internationally)! The buy/sell spread is about 2.20% for an investment grade Gold kilobar (1 KG). Judging from the performance of Gold prices in recent years, catching up with this 2.20% is not a difficult goal to achieve.

Of course, there is no absoluteness in everything, and there is no business in this world that makes only profit. While you can still hold on to Physical Gold till prices rise again and to your favour if you had bought coins or gold, you may face paper loss or in the worst-case scenario, have your account forcibly liquidated if you had bought Gold on margin and faced a volatile market with plummeting prices.

When you get more familiar with investing in Gold, you will gradually learn more about other precious metals and diversify your precious metals portfolio (portfolio diversification) by purchasing into them. As the performance of precious metals vary from metal to metal during different time periods with different market demand, we do not recommend that you invest all your excess funds into precious metals, which aligns to our belief of reasonable investing.

I will stop here for the time being and see you next time! If you have any questions, feel free to leave a comment and we can discuss together.

Maya

There are 2 types of dollar-cost averaging, reading on can help determine which type of dollar-cost averaging is being used by yourself.

We understand that dollar-cost averaging works as the name says it, averaging out the price with every purchase you make, using a fixed amount of money per day to make purchases. For example, spending S$3 per day for 6 days to buy apples.

Below is an illustration to better help you understand the benefits of Dollar-Cost Averaging:

When you average out the price paid per apple, you now pay only S$1.20 per apple, across all the 15 apples you bought, regardless of how much they cost right now. It is a win-win situation, as you now have the apples you wanted, without needing to take note of how much they cost each day, and are still able to buy as many as possible, using the same amount of money each day, but bought at different price levels.

Sounds good, right? Another type of dollar-cost averaging is considered more to be averaging the value more than dollar as you only buy when you think the price is low. Below is an illustration on averaging the value across 6 days, using S$6 every time you make a purchase, with a total budget of S$18, assuming you only wish to purchase the apples when you think the price is the current low:

Using the same S$18, an apple now costs S$1.29 if I were to use the value averaging method, as I only purchase at the price which I think is the lowest low, and did not make a purchase when I think the price is not at a satisfactory low (even when it became even lower than the previous day, I did not make a purchase for fear that the price may go higher.)

Using the illustration above, I did not make a purchase on Days 2, 3, and 6 even when the prices are low, as my own analysis and observation stopped me from making the purchase, as well as the constant market watching did not allow me to immediately buy in at that price level, and the risk of not being able to buy on time is there (i.e. rushing down to the fruit stall to make a purchase after seeing the low price however, the price may suddenly change due to the supply and demand of the apple).

I personally prefer the Dollar-Cost Averaging methodology in the long-run as it helps to average out my monthly costs, based on daily purchases. This way, I also do not have to worry about rising or falling prices, I will have the apples that I want daily, with the price being spread out.

Have you managed to decipher which type of dollar-cost averaging method you have been using based on our above illustration? 😉

Watch this space, as we share more on when should we be using the dollar-cost averaging methodology for investments.

Wendy

Most clients, including our colleagues within GSC, are interested in comparing these 3 options (collateral loans, bank loans & P2P lending) available in the market when it comes to raising funds to tide through difficult periods. A very legitimate question raised often by interested clients, why would a client opt for GSC Collateral Loan Program if the interest rate is higher than the other available options?

Let’s start with some facts comparison between these 3 options.

Although GSC Collateral Loan has a higher interest rate, time taken for loan disbursement and approval is much shorter and it is much more flexible in terms of redemption and repayment schedules. I would say each option has its own pros and cons; it’s really up to an individual to go for the loan deemed the most suitable after full consideration.

In future articles, we will share case studies and scenarios on how our clients have utilised the collateral loan program to achieve their financial goals. Stay tuned and feel free to contact us if you would like to find out more about this unique program!

Maya

Introduction: What is the Purpose of Having Gold in my Portfolio?

Gold is widely valued as a wealth preservation asset, functioning as a hedge against risks faced from the exposure of your other assets and therefore, is a fantastic diversification tool to have for any portfolio. I am sure most of us bought health insurance so that we have something to fall back on when our bodies fall sick. What will happen if our assets “fall sick”? Gold is well-known for its safe-haven characteristics, so when a disastrous event strikes the economy and crashes most markets, Gold will see the inflow of capital, effectively giving us the support that we need at the point of time.

Now that vaccines have been introduced and widely available, countries, economies and the markets are all in a recovery stage. Businesses are slowly picking up as countries open up, putting the stock market back on pace. Like it or not, the pandemic has left lasting effects on our daily lives and the economy. Whether you are talking about ballooning debts of countries from the huge stimulus packages, or the inflation, stagflation, devaluation of currencies, and what actions will the Federal Reserve really take, we do not know how all these will pan out, and so there are always going to be uncertainties lingering in the market. What Gold is capable of, is to give you that layer of protection around your financial health.

Wealth preservation doesn’t mean you need to accumulate hundreds of thousands or millions of dollars before you start taking action to protect your wealth.  No, that’s not the case. Say for example, you have accumulated savings of $2,000 from your income, that is your wealth to protect. Whether that same $2,000 holds its true value 10, 20 or 50 years down the road, it depends on the adequate measures taken to preserve wealth.

Furthermore, there are so many solutions that precious metals bring to the table. Physical bullion is recognised and accepted worldwide, if you need cash and yet you still want to continue holding to your precious metals (say maybe you see there is still more upside potential to prices), what you can do here, is simply use your precious metals to take a collateral loan! Problem solved! You still get to keep your holdings and will now have the additional cash to do whatever you want, whether it is for your own personal use or maybe buy into other alternate assets. The collateral loan we are talking about here is using your assets, in this case, precious metals, as a collateral to get a loan of cash for your use. Precious metals are one of the few assets that are accepted as collateral and given a fair value for the loan.

We hear people saying, “Save to invest, don’t save to save” and the goal for investing is for wealth preservation, not wealth creation. I hope this article has given you some insights on wealth preservation and the role precious metals can play in this concept.

Sin Pong

Introduction : The importance of Portfolio Diversification.

Today, we will be talking about the key lesson learnt from the COVID-19 pandemic. For better or for worse, we got to admit that the pandemic had changed some parts of our lives significantly. Do you remember the last time you went out for a meal without a mask? Well, the pandemic also gave us a sense of urgency on how we prioritise and manage our assets – what if we suddenly need cash to tide us through tough times, or for an opportunity that suddenly arises?

We always hear about “Saving for a rainy day” and in 2020, that idiom turned out to be very true indeed. Moreover, the importance of not “putting all your eggs into one basket” was apparent. While the virus was ravaging through countries and inciting lockdowns, global economies were hit badly, resulting in businesses being affected and jobs being lost. Due to this, our finances were hit hard and therefore, we will naturally look to the other assets we are holding for some form of support. A lot of us go out there, get a job, buy a house, and maybe buying some stocks along the way while trying to grow our wealth. Based on this, the assets we may own will consist of Currencies, Stocks, and Property(s). The S&P500 were down by over 30% amid the pandemic and right away we face a difficult decision. Do we sell and realise losses to get the cash we need? Or do we look to sell our property(s), places that shelter us from harsh weather with a roof over our heads? Given the illiquid characteristics of properties, the whole process from finding the right buyer who fancy your house to surrendering the key to the new owner, will most likely land yourself in a situation whereby the cashflow is “stuck” due to the numerous house viewing appointments and time taken to process the transactions.

This is where Gold really starts to shimmer and shine! Gold was up by over 23% in 2020, and you could have sold some holdings to help rebalance your portfolio. For example, if you had allocated some of your savings into precious metals before 2020, as prices rallied and climbed during the pandemic, that allocation starts to take 10 – 15% more. When you sell that 10 – 15% worth of precious metals, you are still sticking to your designated allocation along with additional cash for your own use. That itself, is portfolio rebalancing. From this example, you will be able to see how Gold provides you with a smarter and better way to save for rainy days.

Being thrifty is definitely a virtue, and we are here to provide you with solutions to bring out more value from your savings.

Sin Pong

In recent years, Platinum has seen an increase in popularity among Precious Metals investors. The scarcity of Platinum makes it rarer than Gold. Approximately 1,500 tons of Gold are mined each year in comparison to just 160 tons of Platinum. However, is rarity a deciding factor on whether the Precious Metal is a good and valuable option for investment?

Although Platinum is widely used in various industries such as jewellery and dental, its greatest demand comes from the automotive sector. Around 40% of Platinum is used to produce catalytic converters in helping to reduce harmful emissions. To find out more on what the other 60% is used for, click here.

Gold and Silver had been used as a form of money for thousands of years before the discovery of Platinum. Although Platinum does not have the same monetary history, the prices of Gold and Platinum are closely correlated, and is even more valuable than Gold based on past historical data. In March 2008, Platinum outshined Gold and peaked at US$2252 per troy ounce while in August, 2020, Platinum has significantly outperformed Gold, rising 55% versus Gold’s rise of 33%. This year, increase in catalytic converters thefts have been reported as Platinum have become more valuable then Gold.

Evonne

One question that most people ask would be – is it better to buy physical Gold Bars now that the price has dropped? There is no absolute yes or no, as the price may be even lower tomorrow. If you prefer seeing and holding on to a physical precious metal, purchasing the physical item would be a better choice but does it help in diversifying your price risk?

A good way to diversify your price risk would be to accumulate pool-allocated Precious Metals (Gold, Silver, and/or Platinum) with GSC Savings Accumulation Program (GSAP). GSAP works by dollar-cost averaging your investment amount. For example, if you invest S$100 to accumulate Gold every month, GSAP will split the S$100 into business days, and buy into Gold regardless of the price. As  the Precious Metals accumulated daily are physically deliverable, you can also take physical delivery of your pool-allocated holdings and own a physical item.

Using the dollar-cost averaging methodology may not get you the lowest price but will definitely help in reducing your risk of buying at a high price. Also, by using the dollar-cost averaging methodology, it is convenient and puts your mind at ease, knowing that you are buying in everyday, without the need to worry about price. When you have decided to make your first move in investing in precious metals, I’m sure many have thought about price risk reduction, and this is one way you can consider GSAP to own precious metals to help reduce and diversify risks in your investment portfolio.

To find out more about GSAP, you can head over to our website here. You can also reach us at GSAP@goldsilvercentral.com.sg or call +65 6222 9703 to enquire more about this program!

Wendy

1. Algorithmic traders derived similar sell levels and multiple stop loss or stop out levels were triggered

Figure 2 and table 1 show increased activities (volume and open interest) on these two particular days as compared to other trading days, but they are nothing out of the ordinary. It is also very unlikely there was “manipulation” as many unhappy investors claimed. There were many market participants that contributed to this dip, as opposed to a single big trade by a market player.

The annual seasonal weakness for gold happens during the summer months, which many call the summer doldrums. During this period many family offices, fund managers and traders are on vacation, which means fewer trades executed and hence lesser volatility or price action during this period. Refineries use this period to retool and collect gold dust in their facility as physical demand tends to be lower. As we know, when markets are trading in narrow ranges, not much activity happens and more often than not, investors who are looking for prices to appreciate to make a profit will then lose interest and look at other asset classes to generate their alpha.

Capital will always flow to asset classes that can generate higher returns. This year equity and cryptocurrencies have done well. The S&P has posted 50 new highs this year and a return of about 20% so far. Cryptocurrencies such as bitcoin and ethereum have also done well, with more than 100% returns at their highs. Short-term gold investors were disenchanted as they were expecting gold to hit new highs from what they have seen last year, but prices went persistently lower than the market open on 2 January this year. This probably played a big part in the sell orders we’ve seen, especially when prices fell.

Table 1: Gold futures – Volume and open interest

Brian

What is bid/ask spread?

The bid/ask spread is the difference between the price quoted by bullion dealers (Ask price) selling certain Precious Metals and the price that investors are willing to pay for the Precious Metals (Bid price).

For example, for Gold, if the bid price is US$1788 and the ask price is US$1790, the spread will be US$2.

What are determining factors for the spread size?

1. Trading volume: The higher the liquidity of the Precious Metals, the higher the trading volume. Precious Metals that are highly liquid will have narrower spreads as many dealers or investors are looking to buy(ask) or sell(bid) with the best price. Precious Metals such as Rhodium have a wider spread as they are less liquid and more volatile when compared to Precious Metals such as Gold or Silver.

2. Volatility: Prices may fluctuate when volatility in the Market is high. The bid/ask spread is usually widened for bullion dealers or market makers to manage market risks. For example, when compared to Gold and Silver, Platinum has a wider spread as it is more volatile.

How it affects you as an Investor?

As an investor, you would want to execute a buy or sell order closest to the Spot price. With a narrower bid/ask spread, you can get the best price with the market order itself.

However, a wider bid/ask spread will impose an indirect cost in trading, especially for huge orders. A wider spread will equate to a higher premium for investors. To minimize trading risks, placing a limit order will therefore be a better option. GSC Live! allows you to place a limit order at your desired price with narrower spreads at anytime, anywhere!

Read more about GSC Live!

If you have any questions, feel free to contact us at enquiry@goldsilvercentral.com.sg or +65 6222 9703.

Evon

English Version: Why are your Spot prices different from other bullion dealers or platforms?

“为什么你的现货价格与其他贵金属交易商或平台不一样？”。这是我们在门市常遇见的问题。所以今天我们就来大约讲解这个问题。

1. 价格取决于网站的更新速度。

贵金属的价格是以毫秒为单位来更新的。可是网站却无法负荷如此频密的更新速度，而每秒更新的速度也会致使整个网站瘫痪。因此，网站的更新速度通常没有那么频密，甚至可能在几分钟后才更新。金银中央网站的价格是每两分钟更新一次。

2. 所有的贵金属交易商或平台都有不同的流动性提供者或价钱来源。

流动性提供者会以最小的差价提供价格给各贵金属交易商或平台。不同的流动性提供者所提供的价格未必相同。因此，每个贵金属交易商的现货价格都会不一样。更何况现货价格在国际上是以美元为单位来交易，这必须转换成当地的货币单位例如在我们的情况下就是新元。这汇率换算也会造成一些差价，差价大小取决于贵金属交易商所使用的外汇流动性提供者所提供的汇率。在大多数情况下外汇流动性的提供者会是银行，而银行会从兑换率的差价中赚取利润。这样层层堆叠上去就会扩大本地货币（新元）的现货价格。

不同的因素如市场需求、市场情绪、买卖商数量等都会影响或决定现货价格。即使是一样的贵金属（金银条，硬币），在不同的国家以及不同交易商所在的地区也会影响它的售卖价格。我们将在以后的文章进一步讨论这些课题。如果你有什么疑问，欢迎你向我们咨询更多详情！防疫期间，注意安全！

Evonne

中文翻译： 为什么你的现货价格与其他贵金属交易商或平台不一样？

“Why are your Spot prices on your website different from other bullion dealers or platforms?”. This is a question that we often hear from our retail clients. So, today we will be answering this question briefly.

1. The prices are dependent on the frequency of price updates to the website. Precious Metals’ prices fluctuate every millisecond. However, websites are not able to handle the frequent update of prices and setting it to update every second will crash the site unless a lot of resources is set up just to support this and this in turn will be very costly. Thus, the refresh rates for websites are usually less frequent and it might only be updated only after a few minutes. Prices on GSC website are updated every 2 minutes.

2. All bullion dealers or platforms have different liquidity providers or price source. Different liquidity providers will provide different prices with minimal spread. Thus, the Spot prices would not be exactly the same for different dealers. Moreover, spot prices in different currencies (depending on home currencies of dealers) for example in our case SGD, will also need to be converted from USD to SGD as Gold is traded in USD predominantly. This would also incur some spread and depending on the forex liquidity provider that the dealer uses for currency exchange, in most cases banks, there will be a spread as the bank will have to make their margins. This will widen the spot prices quoted in the local currency, in our case SGD.

Spot prices can be affected or determined by various factors such as market demands, sentiments, number of buyers and sellers and more. Even location of the dealer and thus the cost of bullion can differ for the same bar or coin in different countries. We will further discuss these in future articles. If you have any questions, please feel free to contact us to understand more! In the meantime, stay safe!

Evonne

Did you know, other than purchasing Precious Metals outright through our e-commerce site or over-the-counter, you can also accumulate precious metals gradually. Take your time to save and accumulate the asset and then redeem it whenever you decide.

Accumulating (Precious Metals) gradually allows you to average out your cost and spread out your funds just like the current trending way of purchasing, BNPL (Buy Now Pay Later). Just that in this case you can only take delivery after you saved the full weight of the physical precious metal you want. You can have a peace of mind even if you do not have the time to monitor prices in order to decide when to buy in. GSC Savings Accumulation Program (GSAP) is designed to automatically purchase for you daily, based on your stipulated amount you would like to save into precious metals monthly.

At any time during or after the accumulation, you may redeem the precious metals by selecting your desired physical products – bars, coins and/or jewellery. Based on your accumulated weight at that point of time, you can browse through GSC and Kim Gold product range to select what you would like to redeem. After you have decided, GSC will share more on the premium/Kim Gold Fee to top up.

Jewellery with different purity will be calculated accordingly when redeeming them. If you have queries on this, please do not hesitate to contact our team to understand more.

Don’t miss this good “lobang” as we Singaporeans like to say it in Singlish. This means don’t miss out on this good opportunity on our very own Precious Metals BNPL Program aka GSAP!

Suzane

“Spot prices dropped by over 4.00% in a span of 60 minutes before rebounding back 2-3 hours later.”

The above situation sounds like how BTC typically behaves with its extreme volatility. (For those of us who doesn’t track BTC, BTC’s price fell by over 55.00% in a span of 2 months recently, with the biggest drop being 49.00% within 2 weeks.)

That’s akin to saying your million-dollar HDB flat is now worth only 500k on the market. Ouch.

But guess what, the above situation refers to our safe haven asset known as Gold and it happened just this week, 9th August 2021 (Incidentally when Singapore celebrated its National Day holiday.)

The massive dip occurred just after 0700hrs local Singapore time, a time where most people were just starting their day. The dip lasted for an hour before rebounding back upwards 2 hours later towards levels of US$1740.

GSC Morning Call

The big money question is “Why?” And we at GoldSilver Central, have laid out several possible scenarios as to what might have happened.

Background

Coincidentally, on the 9th August, two major Asian markets were closed. Singapore was celebrating its National day and Japan was observing its Mountain Day holiday in lieu. With both markets closed, the depth of the commodities market was shallow, and liquidity obviously was not as readily available. There were probably fewer traders physically on desk as well.

Scenario 1:

A large legitimate sell order was placed. As traders were mostly off desk, the order could have been placed out into the market instead of a manual cover by an actual trader. And due to the lack of liquidity in the market, prices dipped accordingly to fill up the glut caused by the large sell order.

Of course, there are several follow-up questions in this scenario. Would prices really dip that much? Would this big dip happen again? What can I do to prevent margin calls for my account?

The truth is, we will never know with certainty. Unless we are the actual parties involved (The dealer who got the sell order or the actual customer with the sell order), we can only “guess” based on the available data that we have on hand. And the one thing is clear, Gold dipped by over 4.00% in an hour to hit a low of US$1684.72 between 0700 – 0800 hr local Singapore time on 9th August 2021.

Would it happen again?

We don’t know. From our experience, big orders are usually spread out across several days due to its sheer size to avoid large slippages and market movements. Hence, they are usually done Over-The-Counter, directly between market participants. This prevents unnecessary shocks to the markets. From the looks of the markets right now, it seems that we are out of the woods with gold prices hovering around the US$1750.00/oz levels. But can we say with certainty that prices will not cross below US$1700 in a shock dip like what we just experienced? No, we cannot be certain.

Scenario 2:

High-frequency trading probably exacerbated the drop triggered by stop losses.

Due to the prevalence of high frequency trading these days, large volumes of trades can be pushed through in a shorter span of time now. There is debate as to whether HFT ultimately contributes to increased market volatility and sharper spikes and crashes. However, we will leave that to another day for discussion.

What we wish to bring up here is that the quick pace at which the price dropped that morning probably didn’t even leave time for most traders to adjust their stop losses accordingly. Each lower price level would likely have triggered further stop losses, thus resulting in a negative spiral downwards until more and more traders caught wind of the situation and managed their positions accordingly.

Well, what should you do now?

NOTHING.

Ever heard of the saying “Don’t try to catch a falling knife?” The same principle applies here, you weren’t in the right position before the event occurred. So don’t try to chase after something that is just simply not meant to be.

Reacting to an unexpected situation is never a good thing and we won’t know for certain what is going to happen next. If anything, stick to your gameplan. There are always opportunities in the markets.

If your initial position was a buy position, then see this as a good chance for accumulation. And do it wisely. GoldSilver Central offers you the tools to do so. We have:

1. GoldSilver Central Savings Accumulation Programme

Dollar Cost Averaging Strategy is the crux here, and when you onboard the GSAP, accumulating daily is stress-free. Think of it as automated disciplined savings for your purse strings. It allows you to break up your purchase into daily smaller bite sizes, spreading out the price risk that you must bear. More discipline in your life isn’t such a bad thing.

2. GSC Live! Mobile platform

A mobile friendly application that is a powerful tool for investors. You now have the capability to view and transact based on live streaming market prices. Yes, that is right, you can buy / sell anytime and anywhere that you find convenient. So if prices were to crash once again, you would be able to take action immediately. And the best part? It’s 100% physically deliverable. Yes, let me repeat, 100% physically deliverable. You can exchange the pool allocated gold in your GSC Live! Account for physical bars & coins at our retail shop.

If you wish to learn how GoldSilver Central can add value to your portfolio, let us know and we’ll give you a call at your convenience.

Jason

It has been a busy week, you didn’t have much time to look at your Precious Metals (PM) investments during the week. Now that it is coming to the weekend, you decide to purchase some LBMA Good Delivery gold bars as prices having been dipping throughout the week.

BOOM. Wrong move there. You might have been better off waiting for Monday. To understand why, we first must understand the price components of a gold bar and why weekday prices are different from weekend prices.

If you are unfamiliar with the below equation, get familiar with it first!

Price = Physical Premiums + Spot price

(For more information, refer to “Cheaper a bit can a not?” Why your gold bar should NOT be cheaper.“ Article)

“Wise and successful businesses properly manage risks.”

For GoldSilver Central, we adopt a Hedging-based model approach where we ensure that we are not exposed to price fluctuations on our clients’ orders. This approach allows us to serve our clients without any prejudice on prices and ensures that we are not adversely affected by massive rise/drop in prices. To put things in perspective, a $200 increase in gold price will not equate a $200 increase in profits for selling a gold bar, as we do not take any positions on the gold spot price.

Under normal market conditions, where there is deep liquidity available and market participants aren’t afraid to quote prices for buying/selling, the difference between the selling price and buyback price (Also known as the buy-sell spread) is narrow. This is a natural function of efficient markets, where conditions for performing transactions are very fluid and has less or no friction. This is what usually transpires on a weekday where many market participants are available, and dealers are active also.

However, on a weekend, this is not the case. Market participants are inactive and do not quote prices. Hence a bullion dealer who deals on the weekends will instead, take the trade onto their own books. This creates exposure and a higher risk for the business itself, come Monday when markets are once again open. To deal with this increased risk, the buy-sell spread is widened to account for any possible fluctuations between the current quotes and the Monday market prices. This widening could be reflected in either the physical premiums or the spot prices itself.

A fun fact: Never try to compare prices of brokerages on a weekend. The adjustment of the buy-sell spread differs for each brokerage and you will end up with an inaccurate comparison.

How is the buy-sell spread determined on the weekends?

Reputable bullion dealers will have their own price risk assessment and structure. They consider several factors, such as the current market volatility, and price accordingly. Hence, you may observe that the buy-sell spread for the weekends may differ for different products.

This is also why some bullion dealers do not take in large orders on the weekend, as this increases their risks to an unacceptable level.

This sounds so unfair! Why should there be a wider buy-sell spread?

It is not a question of “fair / unfair”. Rather a more appropriate question to ask yourself should be “am I willing to deal at the current quoted rates?” Reputable bullion dealers widen the buy-sell spread to account for the increase in risks that they undertake. If they do not, they expose themselves to unacceptable risks and may even go out of business if the risk is not managed properly. However, if a dealer widens the buy-sell spread too widely compared to others, savvy investors know not to take it up and the dealer effectively prices himself out of the market. GSC offers services such as GSC Live! and price alerts/limits that assist our clients to monitor their desired price levels.

So why transact on the weekends?

It depends on your objectives!

If you are a regular investor and are now in the accumulation phase of your investments, you may wish to avoid placing weekend trades to avoid any major fluctuations in your accumulation. Slow and steady as some call it.

However, if you are a gun-slinging sniper looking for short-term opportunities from minor movements in price, and you foresee that prices are poised for a big movement come Monday, then yes transact on the weekends and lock in those prices. There are also investors who see that the current weekend prices meet their desired levels and are happy to sell at these levels. There is nothing wrong in that too.

Ultimately, GSC’s role is provide liquidity to our customers at fair and transparent rates. We also have value added services such as GSC Live! that make it easier for clients to achieve their objectives. The choice to transact or not, has and always will be the client’s to decide.

Till the next time, have a good weekend.

Jason

Have you ever wondered how do bullion dealers come up with the price of your physical gold bar? Is it true that bullion dealers make a lot of profits? Today, we look at the breakdown of a gold bar and why it is important to get a value deal instead of a cheap deal.

Essentially, the basic 101 formula is this:

Price = Physical Premiums + Spot price

Physical Premiums

Precious Metals Investors know that when they buy physical gold, they must pay a markup known as a physical premium.

For instance, on our GSC website, an Argor Heraeus Cast Gold Bar 100g is selling at S$8050.00 with the spot price of S$2450.80/oz. This translates to a physical premium of S$170.50 for the bar now.

This physical premium includes all the various costs components incurred in the minting of the gold bar. Some of these components include, but not exclusive:

1. Refinery Minting costs
2. Logistics Costs for delivery
3. Insurance Costs
4. Storage Costs
5. Profit Markup

We covered this in a previous article also:

What are Physical Premiums? Why are they important?

You can see in the above example, it is inaccurate to say that the bullion dealer earns $170.50 from selling the Argor Heraeus Cast Gold Bar 100g. The bullion dealer incurs costs when it decides to bring in inventory stock from refineries and typically the local SEA market competition is very stiff. It is not far-fetched to say that for a 100g gold bar retailing at S$8000+, the dealer could only be making S$10+ from it.

However, it is accurate to say that the retail investor’s “additional” costs of owning the physical bar is $170.50. It is an unavoidable cost incurred for the eliminating the counterparty risks and having the additional security of the physical asset. (We will discuss this in greater details in another article. PM us for more details!)

Spot Price

This is commonly known as the price of gold which may be bought and sold at this moment. What determines the spot gold price? The simplest answer is demand and supply of the market participants. However, there are many alternate theories about it which we will not delve into. We must note that the spot gold price differs slightly from region to region for many practical reasons, considering the geographical location and the time lag.

So, why should I not want my bar to be cheaper?

The more appropriate question here would be “What’s the opportunity costs I have to forgo here?”

Just imagine this, a dealer who is solely focused on “a race to 0” as we affectionately term it, is likely not going to be focused on value adding to its customers. Its main goal would be to try and attract as many customers as possible by virtue of its “lowest prices possible” strategy and hope to attain enough market share to be a dominant player. We know that does not work in the bullion industry, as seen from the numerous players initially making a big entrance in the precious metals industry with “low premiums inventories”, only to shut down shortly after with huge losses.

Price should not be your only comparison.

Instead, you should be looking for a dealer who is not only price competitive, but also able to value add to your portfolio investments! We’ve spoken on the importance of having an expert to guide you in your precious metals holdings in this article here (All Precious Metals investors fall into 2 categories. Which are you?)

Personally, I would absolutely be willing to top up the extra $10 in premium costs if in the long run, the dealer is able to value add to my portfolio. The costs savings would be much more than the $10 I put up now. Think of it as a minor investment in ensuring you get a better deal rather than a cheaper one. As Warren Buffett says:

“Price is what you pay. Value is what you get.”

And I would choose value over price anytime of the day.

Till the next time.

Jason

Inflation refers to the rise in prices of most goods and services of daily or common use. Whenever there is a higher demand than supply, prices will be increased and therefore, leading to inflation.

Investors holding on to tangible assets, such as property(s), may like to see inflation in the Real-Estate sector, as that will cause the value of their assets to increase. On the other hand, as whenever there is a negative in the Real Rates of Return in the Equity, Bond, or Real-Estate markets, investors will purchase Gold regularly as it is an asset that maintains value. This is because Gold, Silver, and other Precious Metals have both intrinsic and industrial value, cannot be printed at will like currencies; therefore will not be affected by inflation in the same way as food or personal services

However, investors will have to take note that the volatility of these assets can turn down the benefits of their insulation from rising prices, especially if it is only used for a short-term investment.

Deflation is when the inflation rate falls below 0% (a negative inflation rate). Inflation will cause the value of the currency to decrease over time however, sudden deflation will increase the value of the currency. This will mean that more goods and services can be bought with the same amount of currency than before this sudden deflation.

Usually, deflation happens when there is a high supply (excess production) with low demand (decreased consumption), or when supply of money is decreased (sometimes in response to a contraction created from careless investment or a credit crunch), or because of a net capital outflow from the economy.

If deflation is exacerbated, it can throw an economy into a deflationary spiral. This will happen when a decrease in price leading to lower production levels, and therefore to lower wages. This will cause a lower demand by businesses and consumers, and the price will decrease further due to the lower demand. Unemployment rate will also increase if consumers delay spending in anticipation of falling prices, as it will eventually lead to a falling economic activity.

What we see today, the big increase in money supply in support of the global economies due to the effect of the pandemic, the low interest rate to spur lending and spending, inflation seem more like a plausible event moving forward. At this moment, a portfolio with a slightly higher allocation to Precious Metals might be good as we are bullish in the longer term and this period (current price levels for Precious Metals) might be a good window to enter the market and accumulate more.

Always remember that a diversified portfolio will be important to tide investors through inflation and also remember to constantly rebalance your portfolio to achieve the best results!

Suzane

A recently reported fraud news in Singapore involving physical Gold bars unfortunately showcased the often used asset of choice by fraudsters, fake con artists and money launderers. This plagues the industry from time to time and gives a bad name to precious metals investing for serious investors and trusted dealers.

The Financial Action Task Force (FATF), is an inter-governmental body that sets international standards aimed to prevent money laundering and terrorism financing (ML/TF). Similar to other important financial centers globally, Singapore is a member of FATF and has taken action to tighten regulations and reduce the harm caused by these illegal activities to society.

For the precious metals sector, Singapore had passed the Precious Stones and Precious Metals Act (PSPM Act) in April 2019 that introduced an anti-money laundering and countering of terrorism financing regime to strengthen Singapore’s overall efforts to counter money laundering and terrorism financing.

GoldSilver Central Pte Ltd (GSC), as a regulated and trusted dealer in Singapore registered under the PSPM Act, complies with and performs the required customer due diligence (CDD) and enhanced customer due diligence (ECDD) processes.

Regulated dealers under the PSPM Act are prohibited from performing any transaction if the required CDD process is not completed or fulfilled. And for cash transactions, regulated dealers are further required for compliance reporting for amounts above $20,000 to the related regulatory bodies.

All regulated dealers have also been advised to display prominently the Ministry of Law’s Notice for Customers (as shown below).

The World Gold Council (WGC) is the market development organisation for the Gold industry. The WGC recently produced the Retail Gold Investment Principles (RGIP) which provides high level, best practice guidance for providers of retail Gold products. GoldSilver Central, which is also a corporate member of the Singapore Bullion Market Association (SBMA), supports and adheres to the guidelines found in WGC’s RGIP.

You may learn more about the RGIPs here.

As a regulated and responsible dealer in our industry, we want to always support and help build trust in our precious metals community for a safe and responsible trading environment for our clients and business partners.

GSC Compliance Team

Missing out on the joy of joining your once-in-a-lifetime graduation ceremonies in-person? Trying to reward your loyal staff but can’t hold any meaningful physical ceremonies? How about having fixed your wedding date and made all the preparations for a intimate experience only to be affected by the volatile uncertainty caused by Covid-19. That’s exactly where a gift in the form of a Gold Bar or Coin will be a memorable and significant one.

At GSC, we consistently source for products suitable for investors all around the world, each looking to fulfil a different need in their portfolio. During this period of Covid-19 pandemic, where we all need to be practising social responsibility and distancing, GoldSilver Central sees the need to still remember and commemorate special events in a meaningful way.  Virtual interactions and celebrations can’t be avoided, but let’s continue to celebrate that important milestone in our lives.

Gift of Finance

Graduation ceremonies traditionally signify passing into the adulthood, so why not get a physical gold bar or coin as a first real financial investment for your graduating child? Celebrate that parental love you have with your child by imparting to them life’s eternal lesson: the importance of personal finance.

Gift of Loyalty

Similarly, reward your loyal staff who have been going above and beyond their roles by gifting them a gift that signifies a store of value. Show them you value their contributions and celebrate the bond you have built up over the years.

Gift of Value

And what else can we say about arguably the most important event in most of our lives? We should never underrate the joy of the matrimony of a couple. And a pure gold investment bar will make for a solid beginning of a relationship. Display it prominently in your new home and remind each other daily the importance and value of your marriage. Or if you are gifting it for your son and newly official daughter in law, this is a good opportunity to share with them the value of long-lasting assets in the relationship.

We have curated a catalogue of suitable gifts for you. Here are some of the products you can consider.

Feel free to browse the catalogue. For corporations, we are able to customize portfolios to suit your needs as well.

Thank you and lets all keep safe

Jason

Today, as I was sharing the merits of having Gold in your investment portfolio, a mid-30s male came up to me and asked me this, 

“How much should I invest in Gold? How do I even go about doing it?” 

A good question. 

We operate a precious metals business. Will we ever say  

“You are buying too much Gold! Stop buying!”.  

ABSOLUTELY, YES WE WILL SAY THAT.  

Because the alternative is just simply wrong. No one should ever have 100% of your assets into any 1 basket, that is a gambler’s mindset. (In which case, we can point you to the nearest Casino, they should be welcoming locals with open arms at the moment, given the lack of tourism still in Singapore.) Even Warren Buffet diversifies. So should you. Period. 

Hang on, did a Precious Metals Market Leader just mention not to buy Gold? YES we did! And that’s because having too much Gold weightage in your portfolio may not always be a good thing. Let’s dig deeper. 

 There are 2 main reasons investors buy into Gold as an asset. 

Capital Appreciation  

Wealth Preservation 

Which reason do you belong to? 

Lately, we hear a lot about how Gold prices have gone up more than 50% and that it will continue to have a “meteoric assent to the moon and Gold will have taken a leap for mankind” (we jest but just hear some of the stories that we have heard…) Would Gold shoot up to $10,000 per oz? MAYBE, but that will most probably not happen in 2021 or for the next 5 years for that matter. If you are investing to earn capital appreciation, you need to ask yourself THE important question. 

What is my timeframe? 

(We’ll discuss this in greater details next time, subscribe to us for the latest updates. Or simply call us to ask.) 

Once you’ve identified your reason for investing in Gold, comes the next part in deciding how much to invest. Ask yourself this very simple yet straight forward question, 

Can you sleep at night? 

Every investor’s “sleep tolerance level” is different, one may be comfortable with putting in 20% of their portfolio into Gold and possibly see it shrink by 10%. Another may be anxious with even a 5% dip when they’ve only put 10% of their portfolio. And you know what, there’s nothing wrong with it. Which is why here at GoldSilver Central, our purpose is not to sell you more gold, more silver, more platinum… Our purpose is not even to tell you “investors should put 5-10% of your portfolio into Gold. This is historically proven to be the best portfolio weightage according to experts…”  

Our purpose is to ask you this,  

“Will investing in Gold lead to better sleep for you? If so, lets discuss what is the most cost efficient way to get into it. If not, you should consider why are you even thinking about investing in Gold.”  

Are you buying too much gold? Speak to us to create the portfolio tailored specifically for you to have a good rest at night. 

Till next time. Sleep well. 

Jason

2020 was the banner year for Gold, hitting US$2074.96/ounce in August 2020. Silver has hit its high since April 2011 at US$29.795/ounce and Platinum has hit US$1075.699/ounce since August 2016.

Based on the GSC 10 a.m. Reference Price, Gold has increased 24.93%, Platinum has increased 47.44% and Silver has increased 47.54% in 2020.

The lowest price for all metals occured in March for the year 2020. This is also the period when the pandemic started to proliferate globally.

The pandemic has accelerated the rally for investors who are looking to protect their wealth, and this led them to stockpile precious metals, the known safe-haven. In addition to the increase in demand, the pandemic has affected the supply chain for the precious metals due to lockdowns. All these led to an increase in the premium of physical stocks.

With the huge government debt, negative real returns on bonds, low or negative interest rates and threats of inflation and market turbulence, what would your precious metals forecast be for 2021?

Will the silver continue to outperform in 2021? Will the basis of positive blast from the green transformation driving increased industrial demand, and the expected economic recovery?

Below is the chart that shows the Gold, Silver and Platinum spot price (SGD & USD) movement line for the year 2020. Based on the charts below, it shows that Gold and Silver are in tandem and have a closer correlation as compared to Platinum hence a diversification across different precious metals might be a good idea for a more robust portfolios.

Price based on GSC 10am Reference Price

Suzane

I believe most have read about the recent Reddit group that has spurred on many other retail investors to short squeeze stocks that hedge funds have big short positions in. The idea is to drive prices of the stock high enough to force the hand of these hedge funds to buy back the stocks they have borrowed to sell, at a loss.

Why didn’t this work with the Silver Market?

The commodities market doesn’t work the same way as the stock market. The shorts reported by CME or Commitment of Traders Report (COTR) does not mean that all of these shorts are speculative positions or positions that traders have placed to bet that prices will go south for them to make a profit. Most of these short future positions are to hedge physical Silver exposure or miners to secure prices in the future to deliver mined Silver against. In other words, these short future positions are being offset with physical bars and coins held in their inventory.

Another point to note, we do not know what is on the trading book of each bank and they might have positions not pushed out to the market yet as they have taken on a big position. For example, the trader in a bank has bought a sizable amount of Silver from a fund and yet to sell it out in order not to move the Silver price too drastically. This ride up in Silver prices allows them to hedge out their risk at a much higher profit and due to the larger number of buyers available, it will also allow them to get out of their positions even earlier and at a tidy profit.

Bottom line is, we do not see the full picture from the reports provided via CME or COTR.

The financial institutions raised margins to prevent Silver prices from soaring, is this true?

Margins were raised by 18% by Comex but this was not because the institutions wanted Silver prices to stay low. Many brokers followed suit. Margins for trades is a function of volatility. The higher the volatility the higher the margins required. This is for risk management and also to protect the interests of investors. This will happen for any asset class not only for Silver. This often has been misconstrued by many to think that the institutions did this on purpose for their own gains.

Physical Silver premiums shot up sharply, does this mean there are not enough physical Silver?

Physical Silver premiums came up at least 30% or more but it does not mean that physical Silver have all ran out. The sudden sharp increase in physical demand from clients globally due to this Silver squeeze coupled with the Covid-19 measures implemented in mints and refineries lead to a short term tightness of physical Silver bars and coins. There are still large Silver bars available in many vaults around the world but they are not the preferred choice for retail investors.

The manpower restrictions due to Covid-19 also meant that production schedules for Silver finished products have to be extended especially with this huge increase in demand. These factors led to the increase in premiums and it will ease once the Silver orders backlog has been met.

Brian