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Glyn G
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The Silver Market in 2013

- Jan Skoyles Real Asset Co - The Real Asset Co

Can anyone make sense of this paragraph for me please??

"Whilst silver might appear to be a better buy than gold, it is in fact rarer than the yellow metal when it comes to investment purposes. Eric Sprott believes the ratio of investment grade silver to investment grade gold to be 3:1. Sprott calculates that there is in fact only 120 million ounces of gold and 350 million ounces of silver available for investment."

Clear as mud. In what way can something be rarer when it is available at the ratio of 3:1? Does it mean rarer relative to its cost or what? That might make sense. So silver is a 50th of the cost of silver but rather than being 50 times more abundant it is only 3 times more abundant. So that does make silver a better buy than gold then doesn't it? Whats your point?

Also it's a bit of a moot point as we have already seen that turning industrial silver into 'investment silver' is not a problem if the price is right. Witness the extraordinary quantity of gold that has been refined through Switzerland this year, for resale in China. Where there's demand the refineries will get busy.

It bugs me as well when articles like this suggest that somehow investment demand is taking Silver out of circulation for good. Almost everyone that 'invests' in silver wants to offload it at a higher price, as it doesn't provide a return. It's still there...it's just waiting to be exchanged for something else. A huge and growing pool of it. (Maybe they are waiting for a day when they can redeem it against a PM backed currency or they are hoping they can spend it directly on other assets.) All the same it'd be better to concentrate on industrial demand which genuinely sucks silver out of the system never to return.

Commented 3816 days ago

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Beginning of the headline :Yesterday Thomson Reuters GFMS released their latest report on the silver market. We take a look at it and assess what it means for the silver price. There are several factors, some positive and others negative, that will affect the price of silver going forward. First up, let’s have the not-so-good news facing the silver price. In 2013, total supply of silver is expected to climb by around 0.7%, much of this is thanks to the 7% or 28 Moz (million ounce) increase in mine supply but offset by the... Read More

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