Silver is one off the most undervalued and hated assets in the world. 99% of the investors are still in the dark about silver. But like everything on the financial markets: more pressure to keep the price down only gets you bigger gains when the price explodes.
There are way too many paper silver assets backed by physical silver. In other words, debt is masqueraded as assets while only few investors hold true stores of value. It’s a monster in disguise. When the paper party is over, you’ll see who’s wearing no clothes.
According SRS Rocco Report Silver Bar & Coin demand was a paltry 51.2 Moz in 2007. This surged after the U.S. Investment Banking & Housing Market collapse to 240 Moz in 2015. In discussions with many analysts, they came up with a figure of 0.5% of the market was buying silver.
If we had just a doubling to 1%, it would be 480 Moz of physical Silver Bar & Coin demand. And a quadrupling of 2015 demand would equate to 960 Moz. Just think about how that would impact the physical silver market.
Silver production to drop
Mine production of silver will probably drop in 2016 for the first time in over a decade and demand is set to outstrip supply for a fourth straight year, says Standard Chartered Plc. The most important silver mines grabbed all the easy-to-mine production. If you dig out all of the easy product this year that leaves the harder, more expensive stuff next year.
These mines have stripped all the “low hanging fruit” within their operations. This cannot and will not last. There is only so much “easy pickings” to be had. Globally there’s a massive surge in retail investment demand for both silver and gold. That’s a toxic combination.
Silver-ETF’s picking up
This demand became overwhelming to the market in July 2015 when both the U.S. Mint and the Royal Canadian Mint were sold out of the two most popular silver coins in the world. While both mints moved to rationing sales for the remainder of 2015 both mints set new record sales volume!! That’s real demand!
While investors have embarked on a gold buying spree, increasing their holdings in exchange-traded funds by 18 percent this year, they reduced their assets in silver products by 1.2 percent through February, data compiled by Bloomberg show. That changed this month when ETFs backed by silver had their biggest inflows over three days since 2013, rising 500 metric tons to the highest since September, that’s 16 million ounces.
Mainstream investors have a lot of leverage in the market and the tide is turning. If you don’t buy silver NOW, you’ll regret it for the rest of your life.
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