Gold is down $200 in just a few days. You would expect that physical holders would be unloading the stuff creating a veritable selling panic. Not the case. In fact, the reality is quite the contrary. At the Perth Mint in Australian buyers were lined up around the block. While it’s harder to find a brick and mortar establishment selling precious metals in the US, most major retailers have been drained of 90 percent pre-1965 silver coins, one ounce rounds and silver eagles. Shortages are starting to crop up for 1 ounce gold coins as well. What’s going on here? Why is the market acting so irrationally? It appears that the paper market is rapidly decoupling from the physical market, a healthy trend that we believe will increase drastically in the future.
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