Home » Precious Metals » One More Drop, Then Silver Back Above $25

One More Drop, Then Silver Back Above $25

by John Rubino on May 8, 2013 · 21 comments

In this week’s Q & A, National Numismatics’ Tom Cloud updates his near-term precious metals price targets and explains why silver will rise faster than gold once the bottom is in.

DollarCollapse: Hi Tom. Last time we talked you said that your charts put the worst case scenario for a gold correction at $1,380. Within two weeks it got there. Nice, if painful, call.

Tom Cloud: It actually got down to $1,328 mid-day, and silver fell to $22.68, which was right at the low point of our chart. It was pretty stunning. Both metals have recovered part of their losses lately.

DC: Now that your short-term predictive skills are established, what happens next?

TC: I’d say we right now we have a 50-50 chance of silver going back below $23 one last time, in the next week or two. But at that point the shorts will be taken out and we’ll see silver head back up above $25 fairly quickly. I’d be really excited if we weren’t heading into the weakest demand season. Normally the precious metals market kind of flattens out at the end of May when the kids get out of school and then picks back up at the end of August. So barring some big financial crisis or a Middle East war the next few months may not be too eventful.

DC: We can wait. Looking at longer-term fundamentals, the “austerity versus growth” argument seems to have been resolved in favor of growth. From now on the world will follow Japan’s lead and just create whatever new currency is needed to generate jobs and inflation. If they succeed and we finally get the Austrians’ crack-up boom, would that favor silver or gold.?

TC: In that scenario industrial demand for silver would rise. On the investment side, more people can afford silver. They can dollar cost average with $500 or $1000 a month. And with the gold/silver ratio now at 62, there’s a lot of room for silver to outperform gold – though both should go up given all the money printing that’s coming. Once Treasuries break [i.e. once the US government bond bubble bursts] you’ll see money moving out of paper, and gold and silver and other hard assets will explode.

DC: What’s happening on the supply side with availability and wait times?

TC: Right now, even with the seasonality, the long waits aren’t coming down. Two months ago we could deliver metal as soon as a client’s check cleared. Now there are multi-week delays on some of the popular coins like silver maples, silver eagles and silver philharmonics. I’ve actually been getting calls from smaller dealers who have been completely cut off. They can’t even order from their suppliers and they’re trying to get me to order for them, which I’m not doing.

DC: Last month you noted that your orders were coming mostly from big buyers and that smaller customers were notably absent. Has that changed?

TC: The small buyers came back after the correction. In addition to lower prices they’re starting to understand that after the Cyprus “bail-in”, money in the bank anywhere in the world is at risk. Most governments have made it clear that they will not bail out banks, so banks will go after depositors’ money.

DC: If I call you and say I want $10,000 of precious metals asap, what would you tell me?

TC: I’d tell you to get silver rounds and get them paid for. We’ll put you in line once your check clears and though your wait might be three or four weeks, the price is fixed and the product will come. It’ll be a much bigger thing down the road when supplies are even tighter and premiums are even higher.

For more information or to place an order, call 800-247-2812 or email Tom Cloud at tgcloud@bellsouth.net. Mention DollarCollapse.com for free shipping and insurance.

  • Lan Wu

    Great work as usual John

  • freddyfiat

    I fail to see how one call establishes short term predictive skills.

    • Pete

      You’re right…one call is meaningless. But a pattern of countless incorrect calls over a period of years can be rather telling.

      Soon you may notice the similarities between precious metal perma-bull predictions and the National Enquirer’s annual New Year’s psychic predictions.

  • DickBurns

    the guy has no website and his email domain is bellsouth.net? is this guy operating out of his garage?

    • PaperIsPoverty

      Local coin shop with $10 million / year revenue as far as I can tell. You wouldn’t want to change your email either if you’d used it in business for years and years.

  • BamaBruce

    Everyone keeps talking about gold & silver shortages. I have no doubt that there are parts of the country that are indeed encountering this but I have had no problem buying either in quantities that I want.

    • http://www.facebook.com/jonas.luttrell Jonas Nathanimal Luttrell

      It’s tighter now than it was 3 months ago in southeast TN and North Georgia. I wanted a tube of Silver eagles last Friday. The major bullion dealer that I use was sold out of everything except higher priced collectibles. They said they would have more today @ $10 over spot. So, I went to my smaller coin shop and all he had was a few bucks worth of old, worn currency, but he said, “I know a guy”. Still had to wait until until Monday for a tube @ $7 over spot. Unfortunately, I drove straight into a lake on the way home and I lost the tube. Point is: six months ago, I didn’t have to wait for silver. It’s out there, but it’s DEFINITELY tighter supply now.

    • TexasAl

      Please tell me where you are buying. I can’t find what I want at a reasonable premium anymore, although I can buy private mint rounds with a longer delivery time.

      • Kenny J.

        I buy my gold at http://www.certifiedgoldexchange.com/ I have never had a single problem with them before, Infact they do everything for me, including free shipping to my house.

  • WorkingClass

    Take your $10k to APMEX. They have plenty of silver available for immediate delivery.

    • PaperIsPoverty

      Interesting, they didn’t have much a couple of weeks ago. I note that nearly all their silver products are marked “Hot Item” (i.e. will soon be out of stock), “Back in Stock” or simply “Out of Stock”. But clearly they do have sources that the smaller guys don’t have.

  • Bruce C.

    These Q&A’s with Tom Cloud don’t do much for me, but I was almost shocked at the cognitive dissonance between JR’s question, “…the Austrians’ crack-up boom, would that favor silver or gold?” and Clouds answer, “In that scenario industrial demand for silver would rise.”

    Uh?… Does Cloud even understand the question (and does JR realize what he’s asking?)? I understand words like “crack-up boom” are merely descriptive and perhaps meaningful only to those familiar with Austrian economics, but shouldn’t Cloud know that if he’s supposedly so knowledgeable? Mises’ “crack-up boom” is associated with ‘the complete collapse of the currency’. In that scenario I don’t think industry would even be able to function. What would industry exchange for silver, or anything else, if the currency collapses? It would be economic chaos. What would you, as a holder of gold or silver be willing to exchange for it? I would think that demand for all but the essentials of life would plummet.

    As I’ve said before, there may be a time when g/s may be useful as money in a barter-type environment but it’s true value is in re-establishing your wealth after a new monetary system is adopted.

    • http://www.dollarcollapse.com John Rubino

      Hey Bruce, my question could have been framed a little better. I was thinking of the period leading up to a crack up boom rather than the crack up boom itself. To get there from here we’d have (probably) a stretch of increasing monetization and then accelerating growth when all those excess bank reserves get turned into loans. This seems like a great environment for silver. Once we actually enter a crack up boom who knows? Something like that has never happened globally, starting with this much debt. Based on 3,000 years of history though I’d still want some precious metals.

  • Pete

    I no longer believe ANY of the predictions of people who have a profit motive regarding inflation fear. I fell for this once, with James Turk predicting $35 silver by the end of 2008, and hyperinflation by the end of 2010. Who can forget Ted Butler calling for a collapse of the COMEX and skyrocketing silver back in 2009? Ah, precious memories.

    It would be an example of respectable journalism for Mr. Rubino to confront these people on their pathetic predictions from years (and weeks) past. Instead, we get more and more softball questions and overly-complimentary introductions.

    Of course, they will all claim to be smart and prescient if the price eventually rises. However, the poor reader is left in the dark regarding the countless times they were WRONG!

    I can’t decide which description is best for Rubino and his fear-mongering guests…”Broken Clocks”, or “Boys Who Cry Wolf?”

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  • dee dee

    Would’ have been nice if Tom would have been honest about silver prices back when I bought it in the $40’s

    • dee dee

      due to all the hype that abounded at the time by Tom and others.

  • Willy1964

    I am still short Silver. Target: $ 2.

  • http://goldcoin.net/ Kristopher Smith

    This was very interesting to read. Well done, John. Thank you.


  • steve bichler

    2 months later and we’re below 20.00

  • Willy1964

    I expect silver to down to say $4 or even $ 2 again.

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