Physical Precious Metals (PPM) – As of any commodities, PPM are not insulated from supply and demand dynamics. In a narrow trading range, availabilities and price premiums are stable. During this period, accumulation/distribution activities take place, and it will be an ideal time to buy when the volume traded is thin. You will also notice that local bullion dealers will have ample stocks and price premiums will be favourable to buyers.
Currently, with no shortages of market-moving news, PPM aka “emotional metals” will reciprocate accordingly. When the price of PPM moves to the extreme polar of the range, surge in buying activities will limit the availability which will then manifest into higher premiums.
Bullion dealers will be running short of stocks as their orders from the mints and refiners will have longer delivery lead time. In the US alone, there are 605 bullion dealers, in UK 157 and they are all competing with the Asians to buy Gold Maples from the Royal Canadian Mint!
Unlike paper instruments, PPM are finite, and it’s not always available upon demand. Investors need to embrace that pre-orders are the norm in the bullion industry and it is also the norm for customers to pay in full as bullion dealers are also subjected to this clause from the mints and refineries.
Pre-order is a good way to get price exposure even though the products are not in stock. Waiting to place an order when products are available will not guarantee a favourable price and premium. Bullion dealers are obligated to fulfil orders on a First-come, First-served (FCFS) basis, and for the most part, all incoming stocks are already spoken for.
As a PPM investor, it is imperative for you to know your bullion dealer. Visit them and do your own due diligence to have a long-term trusting relationship. Numerous gold scams and Ponzis have clouded investors’ judgment leading investors to use a broad brush to paint the industry players. SBM is transparent in its inventory matrix, and all stocks are fully owned. Published stocks are excluding those in transit.
SBM is a subsidiary of Silver Bullion Pte Ltd (SB) of Singapore which has a sound financial standing since 2009. We give you our assurance that all pre-orders will be fulfilled within the stipulated time.