Category Archives: Silver News

An Introduction to Buying Silver 101

This article is a follow-up to our last blog which discussed the merits of owning physical gold. Both novices and long-time investors stand to benefit from a review of the basics of owning physical silver. The following list contains some, but not all, of the reasons to buy tangible silver. Some items on the list hold true for any precious metal, others are unique to silver.

  1. The most obvious reason to own silver is its comparative affordability. As I write this it?s possible to own physical silver for less than $20.00 per troy ounce. As a point of reference, gold is currently 80 times more expensive than silver. We frequently mention to our customers that it?s far more likely for silver to double in value to $37.00 than it would be for gold to double in value to $3000.00 per ounce. Simply put, if your primary motivation for buying precious metals is profit, silver offers you the best opportunity for appreciation.
  2. Silver is more of a commodity than gold. It has numerous practical uses in the fields of technology and medicine amongst others. Whereas virtually all of the gold mined throughout history is above ground and accessible, most of the silver ever mined is gone, much of it inaccessible in landfills, too expensive to recycle. Estimates of the above ground quantities of gold and silver vary wildly but all agree the accessible silver on this planet is far less than the current silver to gold 80:1 price ratio suggests. Based on supply considerations only, gold is either obscenely over valued or silver is grossly undervalued. We tend to believe the latter is true.
  3. If gold, platinum and palladium continue to trend higher many investors will choose to buy silver simply because the other metals are no longer in the average buyer?s budget. This point was touched on in our first pro silver argument. However, in this scenario silver would likely rise due to higher demand. In a precious metals bull market silver could become or already is ?the only affordable game in town? for many precious metal buyers.
  4. Readily available smaller units of silver would be far more useful in an unlikely but possible currency devaluation or financial collapse as well as during, God forbid, a natural disaster or war. Along the same lines, silver?s liquidity during a short-term financial crisis, whether it be unexpected bills or a medical emergency, makes it far more practical than its more expensive counterparts, gold, palladium and platinum.

Jack Hunt Gold and Silver, 2017 1oz US Silver Eagles Coin

There are numerous other reasons to own tangible silver, but many of these reasons apply to all precious metals, not just silver. I?ll review a few of them:

  1. Purchasing and owning tangible silver can be legally anonymous, especially if purchased through Jack Hunt Gold & Silver.
  2. Unlike bank deposits, equities, Treasuries and other paper investments, physical silver cannot default, go broke or file for bankruptcy.
  3. Physical silver is real?it is tangible. Currency, equities, Treasuries, etc., are just paper and promises from the issuer.

In conclusion it should be said that asset diversification is more important than ever in our turbulent and confusing times. We believe that a balanced portfolio should contain some traditional assets such as real estate, equities, bank accounts and cash. However, we strongly believe that a moderate percentage of one?s liquid assets be in precious metals. The non-commissioned professionals at Jack Hunt Gold & Silver would be happy to assist you in any form of precious metal related transactions. 


Removing Capital Gains Taxes from Precious Metal Trades

Recently lawmakers in Idaho and Arizona have passed bills removing Capital Gains Taxes from transactions involving gold and silver bullion.

Normally, when individuals sell gold or silver they must pay capital gains on any increase of the value of their precious metal investments.

However, many consider precious metals, especially gold and silver, to be a form of currency, not an investment in the traditional sense.

It seems that lawmakers in Idaho and Arizona have now realized that their citizens shouldn?t have to pay taxes on their precious metal holdings simply because of the Federal Reserve?s questionable dollar related philosophies.

Gold & Silver Moving Toward Role As Currency

So now we have two states in the last few weeks that have passed bills removing capital gains tax on gold and silver. The Arizona and Idaho legislation is a noteworthy step towards the reintroduction of precious metals in their rightful role as both real money and as a high quality storehouse of value.

Gold silver idaho currency

Idaho and Arizona lawmakers recently voted to eliminate capital gains taxes on gold and silver trades, helping to move the precious metals toward their role as currency, rather than investments. [Image: Tenth Amendment Center]

In 2011 the state of Utah was the first state in 80 years to pass a bill that made gold and silver legal tender once again. Thus, citizens in Utah are legally allowed to use silver and gold to pay either taxes or for goods and services if both parties agree.

But what’s even more interesting is that Utah just recently introduced a bill for a State Gold Repository. This bill would build on the state?s Legal Tender Act, creating a foundation for further action to encourage the use of gold and silver as money.

This would be still another step toward breaking the Federal Reserve?s monopoly on money. The legislation would add several key provisions to the state law designed to encourage the use of gold and silver as legal tender.

Passage would set the stage for the expansion of gold repositories in the state and authorize further study on numerous sound money policies. Specifically, this bill authorizes the investment of public funds in specie (coins with precious metal content) legal tender held in a commercial specie repository.

Demand For Gold & Silver Will Increase When Dollar Falls

As I write this, we now have three states encouraging the use of gold and silver as real money. Not only does this legislation help to reintroduce gold and silver as sound money, it also sets the stage for new depositories across the states to house citizens? precious metal holdings.

Granted, there are only three states onboard with plans equating precious metals with currency. However, I believe that this is just the start for numerous other states to follow suit. The dollar will eventually tumble due to massive monetary printing and staggering debt.

Americans are hopefully preparing for what may be on the horizon. Precious Metals are currently being valued in a manipulated highly leveraged gold and silver paper trading market, a system that cannot last forever.

When the paper markets finally crack under the massive weight of debt and derivatives, there will be a mad rush of investors looking for gold and silver. The overall demand for tangible assets will lead to shorter supplies and higher prices for precious metals.


The War on Cash: Implications for Gold & Silver

Government bureaucrats, central bankers, and Wall Street executives all have reasons for ridding the masses of their cash. It should be no surprise to anyone that they are working together to achieve that goal. But why? The self interest of bureaucrats is one factor, they don?t like privacy. They dream of the day when they can access all your financial information with just a few keystrokes. The knowledge will help them more aggressively tax and regulate.

Central bankers have a different motivation. Their policy of preference is NIRP?.Negative Interest Rate Policy. Bankers in Switzerland, Sweden, Denmark and Japan have already launched NIRP. Their counterparts elsewhere, including the U.S., are planning for it. The plan is to create an environment where customers must either spend their savings or pay their bank interest to hold deposits. For this to work the government must coerce the masses into turning their cash into electronic money. Otherwise everyone will just withdraw their cash over time and literally hide it under their mattresses. When you have to pay a bank say, 1% to access your money, holding physical cash gives you a better return (0% vs. ?1%). Those of you convinced that the Fed is set on higher long term interest rates should note the following: History shows that economic downturns/recessions lead to lower interest rates. With current rates near historic lows it?s not difficult to imagine a negative interest rate scenario. Already, U.S. banks are making it more difficult to withdraw cash. Most banks only keep nominal amounts of cash on hand and then make you jump thru hoops if you attempt to withdraw any quantity of consequence.

Do we take it for granted that we can keep physical cash? Photo Chance Agrella

Bankers are drooling over the profit potential for all transactions to be done electronically. They stand to rake in processing fees every time you use a card or cell phone for purchases as opposed to using cash. In a cashless society bankers will gain a larger customer base, as the public will no longer have the option of holding currency outside the banking system.

The public needs to remember the true reasons that the powers that be want to eliminate cash from circulation. You can be assured that politicians and bankers won?t be truthful as to their reasons for eliminating cash. Wall Street wants you to focus on the convenience of electronic payments. Bureaucrats are preoccupied with stigmatizing cash as a tool for drug dealers, tax cheats and terrorists.

If the public ultimately loses the ?War on Cash? here are some likely ramifications for precious metals investors. Negative interest rates should drive significant demand for gold and silver. NIRP is a testament to the fact that central bankers will try literally anything to produce inflation. Such a controversial policy should set off alarm bells for anyone who isn?t concerned about inflation, or who may be betting on deflation. If central bankers want inflation, they have the power to create it. As always, inflation fears will drive demand for physical bullion.

While politicians and bureaucrats can theoretically win the ?War on Cash? because they have complete control over the issuance of paper money, they cannot win a war on bullion. Physical bullion is private and ?under the radar?, a nightmare for regulators.

If politicians attempt to tax and regulate precious metals they are likely doomed to fail. Gold confiscation had only marginal success in 1933 when the U.S. population consisted of approximately 85 million obedient patriots. A similar confiscation attempt today in our country of 325 million diverse individuals would likely be a logistical nightmare at best and chaos at worse.

Politicians and their allies in the banking industry aren?t likely to eliminate the masses desire, or ability, to transact privately using barter instruments such as gold and silver bullion. The drive to eliminate cash will inevitably push the public into cash alternatives, most notably precious metals.


Silver and Gold are the Best Performing Assets Year to Date… Why?

Silver and Gold are ranked number one and number four respectively in numerous listings of best performing assets in H1, 2016. Silver was the highest ranked asset showing a 38% price increase since the first of the year while Gold reflected the fourth highest increase in valuation this year with a 26% jump year to date. Only sugar and soybeans barely kept gold out of second place. They were the top ranked assets prior to Brexit and in the subsequent market turbulence since Brexit have retained their lofty status compared to other assets. Platinum and Palladium fared well too with 2016 gains of 16% and 6% respectively.

Policies, Economic Turmoil Contribute to Growth of Silver and Gold

Gold and Silver made these gains due to continuing loose monetary policies, diminished U.S. rate increase expectations, concerns about global economic growth, U.S. and global geopolitical concerns and Q1 market turmoil. The UK decision to leave the EU has exacerbated these risks and highlighted them for the complacent investors who seem blissfully unaware of growing of geopolitical and macroeconomic risks.

silver highest ranked asset 2016

Silver is the highest ranked asset in 2016, showing a 38% price increase since the first of the year. [Image credit: Royal Canadian Mint]

There is also the inconvenient truth that many European banks, notably in France, Italy and Ireland, are woefully under capitalized and borderline insolvent. It?s not just banks in the aforementioned countries that are vulnerable. The current share price of both Germany?s Deutsche Bank and Switzerland?s Credit Suisse Bank should give even the most complacent equity bull cause for concern. Both of these banks have massive derivative exposure and the bankruptcy of either one could be the EU?s version of the 2008 Lehman Brothers fiasco. That scenario could lead to the collapse of the EU and severely damage the global banking system as we now know it. To those that say a global banking crisis could never happen should remember that we came extremely close to that situation just eight years ago.

Popularity of Gold & Silver Reflects Global Financial Bubble

Gold and Silver are reflecting the fact that we have a massive global financial bubble, especially in the U.S. stock and bond markets, based on loose monetary policies and the creation of currency to artificially support global markets.

The global financial and geopolitical situation is one big mess. Recent national and international turmoil played out daily in all forms of media reinforce this notion. Historically. in turbulent times, many investors consider a position in tangible Gold and Silver as a hedge against economic uncertainty.

By Douglas Trinder, Precious Metals Analyst, Jack Hunt Gold & Silver


Gold, Silver & Negative Interest Rates

Could negative interest rates be on the horizon? As we discussed in a recent article on this site, a documented “war on cash” has already been initiated in several countries worldwide. In Sweden, Switzerland, Denmark and the euro zone, central banks are using negative interest rates policy (NIRP) as a primary weapon in trying to force feed stagnant economies into growth. Here in America, Janet Yellen recently said that if circumstances warrant, negative interest rates are ?on the table.? Another Federal Reserve governor was quoted last fall as stating ?negative interest rates are inevitable in the U.S.? The same thought process is in play at the Bank of England.

How Negative Interest Rates Could Affect Banking

negative interest rates cash banks

Negative interest rates have been described as “inevitable” in the U.S., which could lead to customers pulling their money from banks. [photo credit: Greedy Corporate America via photopin (license)]

Some highly respected central bankers and influential financiers have suggested that negative interest rates should also usher in the abolishment of cash, a topic we recently elaborated on at this site. These supposed intellectuals theorize that by imposing negative interest rates on consumers, depositors will spend their money as opposed to paying a bank to store their cash. These same bankers publicly state that the masses won?t object to negative interest rates because currency in a bank is easier to spend than cash in our electronic world. The truth is more likely that central bankers and federal governments simply want to abolish cash and go to an all-electronic form of currency. Imposing zero or negative interest rates is major step in attaining that end result.

I believe that depositors will not view money in the bank as a convenience because they can spend it more easily. Much of the world is cash-poor already and they won?t give up their cash for a perceived convenience. The public will ultimately find alternatives to avoid paying a fee, in this case negative interest, to a bank that is likely already robbing them with ATM fees, minimum balance fees, etc., etc?

Think about it from your own personal perspective. What would you do if all the banks announced that, at the start of the business day tomorrow, all your deposits are now subject to various fees and charges equating to negative interest rates? From now on you will essentially pay the bank to warehouse your money, much like some individuals pay the local self-storage facility to warehouse boxes of their junk.

Are you really willing to pay your bank to store your money? I doubt it. Since this is an arrangement never envisioned or experienced in the history of America, bank customers will likely yank their cash out of the bank, assuming the cash is actually there. They will store it at home or move it into assets that will hopefully maintain its value such as collectibles, gift cards, cashier?s checks and of course precious metals.

An Argument For Gold and Silver

This is not a hypothetical essay on eliminating cash. Negative interest rates and cash elimination are under serious discussion by central bankers and influential politicians worldwide. There are several European consumer banks already committed to imposing negative interest rates on depositors this year.

If there ever was a message that makes a clear-cut argument for buying gold and silver, this is it. In a world where your bank deposits effectively lose money annually, the 0% interest that gold earns annually suddenly doesn?t look so bad. If negative interest rates are the next stage of the global financial crisis, gold and silver may become one of the only forms of money to protect you.

By Douglas Trinder, Precious Metals Analyst, Jack Hunt Gold & Silver


War on cash

There appears to be a growing war on cash as evidenced by more frequent reports in the mainstream media suggesting central banks and federal governments are supporting the banning of currency (cash) in the foreseeable future. Consumer spending in most developed countries makes up at least 50% of the Gross Domestic Product. However, with sluggish growth at best in most developed countries, the ?powers that be? are looking to encourage the populace to spend money rather than save it. Thus the motivation for the war on cash.

War on cash leads to hoarding

In a world of low, zero and negative interest rates, there is little incentive for the traditional saver to accumulate deposits within the current banking system. Therefore, there is an increasing tendency for individuals to hoard cash or cash equivalents outside the banking system.

Japan’s recent plunge in negative interest rates serves as evidence of this. Since rates have gone negative there has been a significant increase in Japanese citizens withdrawing large sums of cash from their banks. In addition sale of cash equivalents, especially gold and silver bullion, have taken off. Interestingly the sale of home safes has boomed as Japanese citizens need a secure means to store the cash and/or other cash equivalents they are accumulating to replace their bank deposits. The main point here is that hoarding cash as a result of low or even negative interest rates is exactly what the ‘powers that be’ want to prevent.

Cash withdrawals, deposits and your local bank

Examples of the war on cash already exist. Have you tried to withdraw or deposit more than a few thousand dollars in cash at your friendly local bank lately? Good luck with that! Besides rejecting your request there is a very good chance that the bank will file a Suspicious Activity Report (SAR) with the Financial Crimes Enforcement Network (FinCEN) based upon your request. By the way, you will would never know if it happens. Banks face severe penalties if a customer is ‘tipped off’ to the filing of a SAR.

Even here at Jack Hunt Gold & Silver our hands are legally tied if a client attempts to spend $10,000 or more in currency for ?related transactions? within a calendar year?.unless of course you want to fill out the IRS Form 8300. The Form notifies IRS of a large cash transactions and opens customer reported to further government scrutiny.

war on cash. Will this note remin legal tender?

War on cash; will this note remain legal tender for all debts public and private?

Classic Keynesian economic theory suggests that if cash was banned everyone would be forced to have a bank account. If everyone had a bank account banks could offer low, zero or negative interest rates with the expectation that people would rather spend their money, thus stimulating the economy, as opposed to losing money with zero or negative interest rates. However, it?s this monetary philosophy that has put the world into unsustainable and unserviceable debt and perhaps has fatally damaged the global banking and financial system.

Benefits of the war on cash, not for you and me

The primary supporters of eliminating currency, which include most developed debt ridden governments, central banks and credit card companies look forward to the following benefits of banning cash:

1. It would assist banks in meeting minimum reserve requirements.

2. Banks could use greater deposits to leverage credit and increase profits.

3. It would be easier to control and manipulate any future bank runs.

4. Makes bank ?bail-ins? more effective.

5. Finally, a society with no access to cash is more easily controlled, making it easier to collect taxes and monitor all aspects of individual and corporate finances.

It?s interesting that these benefits go far beyond the stated benefits of a cashless society. Mainly that only tax evaders, drug dealers and terrorists use large sums of cash. The idea that an individual would want to keep their money in cash outside a bank because of perceived risk holds no merit. If you want to hold large sums of cash it?s assumed that you are a criminal.

The war against cash is yet another argument in favor of individuals purchasing and accumulating tangible gold and silver bullion, and storing it outside the banking system.


100 oz. Hunt silver bar, the real story

 

A blast from the past.

Many of our wholesale and retail customers are unaware that Jack Hunt Coin Broker once produced and marketed of 100 oz. silver bars. It’s come to our attention recently that there are some who mistakenly believe that these bars are a rare collectors item, produced by the infamous Hunt brothers (no relation to Jack).

A little history

The brothers, Nelson Bunker Hunt and William Herbert Hunt, were the sons of oil tycoon Haroldson Lafayette “H. L.” Hunt, Jr. In addition, they were also brothers to Lamar Hunt, founder of the American Football League and the Kansas City Chiefs.

Nelson and William used their vast wealth in an attempt to corner the silver market in the late 1970s. They acquired over 195 million ounces (estimated to be 1/3 of the world’s liquid, non-government held, supply of silver). At silver’s peak in early 1980 their ‘stash’ was worth nearly $10 billion (at $48.70/oz). In March of 1980 the silver market collapsed, loosing an astonishing 80% of its value. As a result both the brothers went bankrupt but ultimately regained their wealth years later.

The real story

Now while it would be a far more interesting story if the the Hunt brothers had minted the 100 oz. Hunt silver bars they were actually produced by Jack Hunt Coin Broker. Their were two versions of the Hunt bar.

Hunt-Bar-Stamp-Feature-Image

The stamp for original Hunt bar now serves as a paperweight in Jack Hunt Coin Broker’s offices.

The first was produced at a manufacturing facility Jack Hunt setup in Upstate New York. The second was produced by Leach Garner in Toronto, Ontario, Canada (just a 90 minute drive north of Jack Hunt’s home office in Kenmore, NY).  Peter Sherlock, Jack Hunt’s former VP of Precious Metals Trading, recalled when Jack Hunt first started production of Hunt bars.

“The fact that the bar said ‘Hunt’ on them didn’t mean anything. There was a shortage of generic silver bars at the time and the Hunt bars were produced in response to the shortage. Eventually the silver market caught up and it was no longer profitable for Jack Hunt to produce its own bars.”

100-oz-Hunt-Silver-Bar

The original 100 oz Hunt bar. Rare but not a collector’s item.

The Original Hunt Bar

Weight: 100 Troy oz.
Fineness: .999+
Dimensions: 155 x 78 x 28 mm
Number Manufactured: Approximately 5000
Manufacturer: Jack Hunt Coin Broker 1981-1982

Hunt-100-oz-Silver-Bar

Hunt Bar Version 2. Also rare and not a collectors item.

Second Version of Hunt Bar

Weight: 100 Troy ozs.
Fineness: .999
Dimensions: 160 x 80 x 25 mm
Number Manufactured: Approximately 5000
Manufacturer: Leach Garner 1982-1983

Hunt to Hunt

On a side note, Jack Hunt was once in contact with Nelson Bunker Hunt. In 1981 they corresponded regarding the sale of US90%. Nothing resulted from their communication but it was a great source of pride the Nelson personally responded to Jack’s inquiry.

Nelson-Bunker-Hunt-Letter

Hunt to Hunt letter dated August 5th, 1981.

Where are they now?

On rare occasion a retail customer returns to sell Hunt bars they originally purchased over 30 years ago. To those customers who still hold their original purchase receipt, we continue to honor the 97% of spot buy back guarantee they were offered at time of purchase. Yet we believe have overwhelming majority of the Hunt bars have since been melted or are buried treasure for future generations to find.

 

Now Available 2016 U.S. Silver Eagles


Silver In The Long Term…Is It Time To Buy?

 

5e1609a1-fa23-48c0-9f86-bb028583fbbfThe most frequent question asked of us here at JHCB by the public goes something like this? ?What?s a better buy, silver or gold?? Our simplistic answer is a polite ?We don?t really know?, or a similar non-committal response usually followed up with our question for you? ?Why are you buying precious metals?? We?ve found over the years that our precious metals customers can be separated into two categories. The first group are those looking to make a long term profit buying low and hopefully selling high several years down the road. Our second category of buyers want tangible metals to act as an ?insurance policy? against weakening paper based assets.

This article will focus on why many believe silver is the most attractive precious metal to our clients from the first group I mentioned, those whose focus is solely on profit.

There are several reasons why many believe silver has more profit potential than gold:

1. Silver has dropped in value by nearly 300% since its recent high in 2011, gold has dropped ?only? 35% in the same time frame.

2. The US and most global stock markets appear to be entering into a bear market. In this scenario some paper wealth always moves into tangible wealth with silver being far more affordable to the masses.

3. Numerous charts show silver to be in a technical position similar to 2008. Silver at $9.00 per ounce in 2008 became $40.00 silver in less than three years.

JHGS.US-silver-eagle-20124. Recent history shows that physical silver isn?t always readily available during noteworthy price dips. Physical silver shortages show up in higher premiums above the ?paper? COMEX prices. It is important for the buying public to note: There is no shortage of paper contracts for silver. They can be created in an instant with digital currencies backed by nothing except a compliant central bank. Physical silver cannot be so easily created and consequently can experience shortages. Buy the tangible metal!

5. Most western governments including our own are hopelessly insolvent. Since it would take a rational approach by politicians, and a lifestyle change for those ?entitled? to resolve our debt, it?s safe to assume our financial system won?t be corrected anytime soon. Debt based fiat currencies simply do not stand the test of time.

To those who want to own precious metals, regardless if the motivation is profit or peace of mind, silver offers an affordable option in the realm of liquid precious metals.

 

2016 Canadian Silver Maple Leafs Available Now


2016 Silver Market Trends

Reprinted courtesy of The Silver Institute

(Washington D.C. ? January 28, 2016) Silver is prized primarily for its dual role as a monetary asset as well as an important industrial metal utilized in a wide-range of existing and growing applications. Factors driving the silver market include supply and demand fundamentals, global economic performance, geopolitical issues, interest rates, currency fluctuations and investor sentiment, among others. Against this backdrop, the Silver Institute offers the following thoughts on this year?s silver market trends.

Silver Demand

Silver Eagle & Silver Maple Leaf Coins

Demand for U.S. Silver Eagle and Canadian Silver Maple Leaf coins will continue to be high in 2016

Silver industrial demand, the largest component of total silver offtake, is set to increase its share of total demand in 2016. Silver is incorporated into a variety of industrial applications and is generally price-insensitive given the small quantities that are used in some applications and its critical contribution to these applications? functionality. In 2015, industrial fabrication demand accounted for an estimated 54 percent of total physical silver demand.

Silver?s use in photovoltaics for solar energy is projected to rise in 2016 and surpass the previous peak of 75.8 Moz (million ounces) set in 2011, as global solar panel installations are expected to grow at a high single-digit pace. Moreover, silver?s use in this application may account for more than 13 percent of total silver industrial demand in 2016, up from 1.4 percent a decade ago.

Silver demand from ethylene oxide (EO) producers is expected to jump to over 10 Moz this year, a more than 25 percent increase over 2015. Ethylene oxide is critical in the production of plastics, solvents and detergents. This growth comes off a very robust 2015, when demand grew by well over 40 percent. The bulk of demand is expected to continue to come from new EO plants and expansions at existing ones located in China. China is expected to account for an estimated 80 percent of silver requirements for new EO capacity in 2016.

Jewelry fabrication is expected to increase by 5 percent in 2016, in contrast to a modest contraction last year. While the market will likely see a decline in Chinese silver jewelry demand, which accounted for around 16 percent of the 2015 total for silver jewelry fabrication, growth in other countries should more than offset China?s slippage in demand.

Coin demand is expected to be robust once again in 2016, following a record 130M oz of demand last year. Demand will remain elevated this year as investors take advantage of relatively lower metal prices in the first few months of the year. Increased interest in safe haven assets, as already seen in the first few weeks of the year, will also be positive for physical silver investment demand. In 2015, coin demand made up an estimated 12 percent of total physical demand.

Silver exchange-traded-funds (ETF) holdings fell by 2.8 percent by the end of 2015 compared to year-end 2014. Notably, the decline in silver ETF holdings was smaller against gold?s 8 percent contraction. Silver ETF holdings should continue to remain in stickier hands than those of gold?s investors, partly a reflection that silver ETF holdings have a larger proportion of retail investors.

Indian silver demand in 2016 is expected to grow on the back of increased investor interest and growth in jewelry, decorative items and silverware fabrication. India, long a mainstay of global silver demand, imported a record high 228 Moz of silver bullion in 2015. Imports rose largely due to a decrease in scrap flows, necessitating new supply to meet annual fabrication requirements, a trend projected to continue.

Silver Supply

Scrap Silver Melting

Supply of scrap silver is projected to further decline in 2016

Global mine supply production is projected to fall in 2016 by as much as 5 percent year-on-year.  This would represent the first reduction to global silver mine production since 2002. The lower price environment provided little incentive for producers to invest in expanding capacity at existing operations.   Looking further ahead, many analysts expect global silver mine production to fall through 2019 as primary silver production from more mature operations begins to drop.

Scrap supply, which has been on the decline for several years, should further weaken in 2016.  This outlook is based on additional losses in photographic scrap, a depleted pool of near-market silverware, jewelry and coins, and slowed scrap flows from industrial sources. Industrial scrap such as electronics cost more to recycle and the current price environment has weighed on the profitability of recovering silver from these end-of-life items.

Silver Market Deficit

The silver market deficit (total supply less total demand) is expected to widen in 2016, drawing down on above-ground stocks. The larger deficit is expected to be driven by a contraction in supply.

Silver Price

The silver price is expected to find solid ground this year. As of January 26th, silver prices are up 3.7 percent from the end of last year. This price appreciation is on the back of increased safe haven demand amid volatile and weakening equity markets across the globe.

Contact The Silver Institute:
Michael DiRienzo
Tel: +1 202-495-4030
e-mail: mdirienzo@silverinstitute.org

Now Available 2016 U.S. Silver Eagles

2016 Canadian Silver Maple Leafs Available Now