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October 24, 2014・Key Gold Headlines

1 Billion Ounces of Investment Silver Demand in Next 10 Years

Last year, silver demand and investment broke a number of records thanks to the temporary correction in its price. It appears that this trend is not about it reverse. There has been a variety of news suggesting that both investment and industrial silver demand is going to remain strong for a while. Today we’ll take a brief look at investment demand.

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In a recent press release, The Silver Institute projected that investment demand for silver is likely to increase by one billion ounces over the next ten years. Compare this to 860 million ounces of investment silver sold since 2006. Global demand for silver coins and bars increased more than 40% from 2012 to 2013. It sounds like this trend will be around for a while. Here’s an excerpt from The Silver Institute:

  • Investment demand remains the single most important driver of prices in the silver market;
  • The silver market is the second largest of the precious metals markets, behind only gold in terms of the value of metal flowing through the market on an annual basis;
  • The dollar value of the silver market, which includes trading volumes on the major futures and options exchanges and clearing volumes of the London over the counter market, combined with newly refined silver supply, stood at US$5.1 billion in 2013;
  • At the close of 2013, at least 2.3 billion ounces of silver were held in bars and coins around the world.”

The latest figures from the US Mint support the forecast of growing silver investment demand. Last year, the US Mint sold a total of 42,675,000 ounces of Silver Eagles – an all-time record. Thus far in 2014, the Mint is reporting 36,066,000 ounces sold. Given the low prices this season, especially when compared to the same months in 2013, there’s a strong possibility that 2014 will exceed 2013. At the very least, it will be on par with the record-breaking sales of last year. You can check the latest sales data yourself here.

As The Silver Institute points out, investment demand is one of the biggest factors in the price of silver. This means that as the investment demand grows, the price of silver is likely to rise with it. Not only that, but silver often tracks the price of gold. For investors, this means that silver is very likely to outperform gold when it comes to price appreciation.

Gold has been getting more attention in the past month, but the precious metals world is diverse. Physical silver is an important safe-haven investment that you should consider for your portfolio. Plus, it’s relatively cheap compared to gold, so even younger people with smaller incomes can afford to buy some. Check back on Monday and we’ll share some of the exciting silver industrial news.

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