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Silver Demand At Record Highs... But Prices Are At Record Lows

Posted by Brian Panes on

The last 10 years has seen an incredible increase in silver investment demand. Silver coins and bars will account for one third of total fabricated demand as against 6% in 2006. 2015 will be the third year in a row where a silver shortfall has occurred, which should be price supportive for the future and silver coin demand is forecast to increase by 21% in 2015 for a total record high of 130 million ounces.

The Sunshine Mint in the US hasn't been able to take an order for at least 2 months, such is the demand on their production and to fill back orders. So we have massive demand and low prices - how's that possible? Does the law of supply and demand that has prevailed for thousands of years suddenly become obsolete? I don't think so. Clearly it is the manipulation and leverage of contracts to deliverable physical bullion that is keeping the prices of both gold and silver at these ridiculously low prices.

Currently paper gold to deliverable physical gold stands at around 300:1. It would seem likely that the PPT (plunge protection team) is nearing that point where they may be running out of ammunition i.e. physical gold. They reportedly of late have had as little as 5 tons deliverable gold to backup the paper contracts.

The latest official report shows that mine production is expected to total 867.2 million ounces in 2015 and would be its weakest performance since 2002. The rest of the silver inventory comes from recycled silver and makes the total silver supply add up to 1,014 million ounces.

It is estimated that only 1% of investors in the world are buying physical silver, which means that 1% of investors are controlling 30% of the total silver market demand. Before long, we may very well see an additional 1-2% more investors come into play and 500-600 million ounces will be in demand.

Law of supply and demand will always prevail.

What would the price be then..... if you can get it?