Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (6675)	5/17/2014 10:24:13 AM
From: Goose94	Respond to of 203136

Silver in deficit but prices remain low. Investors would be forgiven for not knowing it, but despite its low price the physical silver market is currently in a deficit. While the precious metal is trading in the US$19 per oz. range Thomson Reuters GFMS World Silver Survey 2014 says there is a 103 million oz. physical deficit of the metal. The gap was driven by a 76% increase in retail investment in bars and coins combined with a recovery in jewelry and silverware fabrication. When such an increase in supply is met with falling mine production and less metal coming out of the scrap market, a deficit is sure to follow. Total demand for the metal came in at a record 1.081 billion oz. last year — that was an increase from demand of 954 million oz. in 2012 and 1.069 billion oz. in 2011. The key driver behind the upsurge in demand was industrial applications, which account for 586.6 million oz. with strong demand coming out of the electronics sector in Asia. Jewelry demand also played a part as it was up nearly 10% year-over-year to 199 million oz. That move was read as a reflection of improving consumer confidence. And silverware fabrication also joined the party, as demand from the sector rose 12% to a reach a three-year high. Against all of that good news for demand was continued sorry news from the photography space as demand there fell by another 7% in 2013 to only 50.4 million oz., a ways off from the roughly 180 million oz. the industry demanded just 10 years ago. The continuation of such demand trends have GFMS predicting that silver will remain in deficit going forward, but despite such a situation arguing for higher prices, GFMS expects prices to be flat and remain in the current US$19 per oz. range. That is because there are still enough above ground stocks to cover any shortfall. Above ground stocks are high despite last year's silver price average of US$23 per oz. not being enough to entice producers, as supply from above-ground stocks dropped by 23.2 percent to 199.7 million oz. The scrap market continued the downward trend on the supply side as it was down 24% year-over-year and reached its lowest level of supply since 2001. That slackening of supply from the scrap market was blamed on a combination of softer silver prices and an exhaustion of coin and jewelry recycling.