In 2013, I spotted an anomaly in the silver bullion demand data I was analyzing. I started updating my YouTube audience regularly as the trend became more pronounced. Before long, other analysts were following the pattern, dubbed "DRutter's Divergence", including BrotherJohnF, SGTReport, and David Morgan. My coverage of the widening divergence was noticed and expanded upon by the world's top experts in precious metals and monetary theory, including Mike Maloney.
I'm often asked to update my analysis of this phenomenon. I've been very ill for 3 years, but I'm getting my life and health back on track, so this is a great time to look at new data and get back into the graphs.
What is the Drutter Divergence?
The US Mint produces the most well-known (and minted) silver bullion item in the world - the US Silver Eagle. When looking at physical demand for silver bullion, for simplicity I look primarily at the Silver Eagle sales data, available on their website. (A closer look at sales data for the Canadian Silver Maple - published quarterly - and many other coins minted around the world, gives similar results.)
The divergence is a large unexplained gap between silver bullion demand and its price, beginning January 2013 and ending June 2016.
For years, I noticed as demand for bullion rose with the price. The price finally retreated after a long bull run in 2012, and demand similarly cooled. But in early 2013, physical demand surged again, despite crashing prices! By mid-year, the precious metals world was hearing about this unprecedented and unexpected divergence.
As I noted in May 2016, demand for bullion was so high, only about 1 in 10 American Silver Eagles can be minted with American silver! About 90% of American bullion is actually from Mexico and Australia!
For a video summary of the divergence, from my last upload on the topic, click here.
New Data
After crashing for no known reason in mid-2016, silver bullion demand has remained low, with the price.
In a way, things are back to how they were in 2007 - before the bull market. Nowadays, both price and demand are low.
Looking back, we see the divergence between demand and price existed from early 2013 to mid 2016.
I reported on the silver bullion shortages many times since 2009, most recently in late 2015:
The latest data from the US Mint website shows demand is starting to go back up. So far in 2019, they've sold 25% more bullion than they did in all of January-February of last year. It's not up to levels seen during the divergence, but the stackers are back!
Why did price and demand diverge so dramatically in 2013, causing turmoil in bullion and currency markets, and bullion shortages across the world?
What ended it so suddenly halfway through 2016?
Despite the well-known undeniable fact that gold and silver prices are heavily manipulated by the big banks and financial elites, silver's price is up 15% from the low in November, and demand is up too.
I'm going to be watching the data closely. Stay tuned here for developments as they happen. (This is not financial, relationship, or cooking advice.)
Stack on! Steem on!
DRutter
