The newspaper also mentioned..."This could be in the form of direct sales, depositing it in foreign banks, as well as leasing and loans, it said. The announcement has not had a large impact on the world silver market."
The bank is planning to be constructive about how it puts its silver surplus to use, and that's why the announcement has only had a marginal impact. 2,900 tons silver (approx. 100MM oz.) is about 53 tons gold equivalent at current prices. A gold disposition of 53 tons would not shake the gold market, especially as one of the only announcements of this type by central banks or governments. The U.S. allowed the sale of its strategic silver stockpile of 141MM oz. The U.S. stockpile has been significantly drawn down and could be eliminated by next year. The U.S. Mint must purchase silver in the open market to continue offering silver products after the stockpile is depleted.
"After three years of growth, world silver fabrication fell by 2.2 percent in 1998...." That group of figures is just a portion of the overall silver statistics package. The prior year-to-year gains in fabrication demand are 1.4, 4.1 and 5.7 percent, so a 2.2 percent decline should be kept in perspective with prior series of gains. Remember what year they're describing - 1998 - which negatively impacted metals markets due to dishoarding as a result of currency crises. As they say, 1,430T decline in India and East Asia during 1998. 1999 figures should be more reflective of the long-term trend and return to normal, relative to 1998 figures.
Have you seen the line item on the silver supply side titled "Implied Disinvestment?" Notice the drop in recent years; disinvestment looks to be somewhat exhausted.
Implied
Disinvestment
1990 52.0
1991 56.1
1992 107.7
1993 13477 (134.77?)
1994 154.9
1995 100.6
1996 154.8
1997 98.2
1998 47.2
The "official sector" also contributed 153MM oz. from 1993-1998. By 1993 they knew about the deficit problem and started feeding probably what little supply they held into the system. |
