Options
Silver, an excerpt from Market Watch
razzle
Posts: 998 ✭✭✭
FYI,
Posters have asked recently about the total supply of silver available. It's given below, 132.65 million troy ounces. Further it is being depleted by a variety of uses, without replacement.
raz
"Silver shine
Meanwhile, July silver followed gold higher, closing 8 cents higher at $13.315 an ounce on Nymex.
The "2007 Silver Yearbook," issued by researchers CPM Group late Monday, painted a "bullish picture for the silver market as surging investment demand and lower mine supplies easily negated lower industrial demand," James Moore, an analyst at TheBullionDesk.com, said in a research note.
Jon Nadler, metals analyst at Kitco Bullion Dealers, also cited the CPM Group report, pointing out that global investors, for the first time since 1989, were net buyers of silver during 2006.
"This development is seen by CPM as being as important to the silver market as our oft-cited gold market news that since 2005 investors own more gold than all central banks put together," Nadler said in e-mailed commentary.
On the supply side, gold warehouse inventories fell 5,134 troy ounces to stand at 7.71 million troy ounces as of late Monday, according to Nymex data. Silver supplies rose by 1.19 million troy ounces to reach 132.65 million troy ounces, while copper supplies were unchanged at 31,529 short tons."
Posters have asked recently about the total supply of silver available. It's given below, 132.65 million troy ounces. Further it is being depleted by a variety of uses, without replacement.
raz
"Silver shine
Meanwhile, July silver followed gold higher, closing 8 cents higher at $13.315 an ounce on Nymex.
The "2007 Silver Yearbook," issued by researchers CPM Group late Monday, painted a "bullish picture for the silver market as surging investment demand and lower mine supplies easily negated lower industrial demand," James Moore, an analyst at TheBullionDesk.com, said in a research note.
Jon Nadler, metals analyst at Kitco Bullion Dealers, also cited the CPM Group report, pointing out that global investors, for the first time since 1989, were net buyers of silver during 2006.
"This development is seen by CPM as being as important to the silver market as our oft-cited gold market news that since 2005 investors own more gold than all central banks put together," Nadler said in e-mailed commentary.
On the supply side, gold warehouse inventories fell 5,134 troy ounces to stand at 7.71 million troy ounces as of late Monday, according to Nymex data. Silver supplies rose by 1.19 million troy ounces to reach 132.65 million troy ounces, while copper supplies were unchanged at 31,529 short tons."
Markets (governments) can remain irrational longer than an investor can remain solvent.
0
Comments
<< <i>FYI,
Posters have asked recently about the total supply of silver available. It's given below, 132.65 million troy ounces. Further it is being depleted by a variety of uses, without replacement.
raz
." >>
This is approximately the amount of 999 deliverable bars in the silver ETF.
There is, of course, a great deal more silver above ground than this.
That does NOT mean it will not go up. Only
that the risk/reward is not optimal, currently.
Buy up as much silver as you can, prices may rise, as supplies drop...
//////////////////////////////////////////////////////////////
Problem is, the silver bugs have been saying that
for about three-decades.
They are bound to be right sometimes. That "sometimes"
may turn out to be the rise between May 2005 and
June 2007. If so, we may all be buying at <$8.80 in 2008.
Huge stashes look like dead money, to me.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
I'm in agreement that gold will be a big mover.
Historically when gold reaches highs in a Bull market, Silver goes along for the ride.
Silver historically also reaches a ratio to gold of below 20:1 in a precious metal bull market.
At todays gold rice of $670, thats a Silver price of approx $30.
It's my understanding that the only time that this ratio widened alot was during the time
the excess inventory from the Comstock lode coming onto the market.
That inventory has been comsumed and then some.
Fundalmentally silver has much upside potential.
raz
"In 1900 there were 12 billion oz of silver in the world. By 1990, the internationally respected commodities-research firm CPM Group say that figure had been reduced to around 2.2 billion ounces of silver. Today, that figure has fallen to about 300 million ounces in above ground refined silver. It is estimated that 95% of the silver ever mined has been consumed by the global photography, technology, medical, defence and electronic industries. This silver is gone forever."
Proud recipient of two "You Suck" awards
If I understand it correctly, when the claim is made that the Silver is gone, what is
meant is that is no longer economically feasible for reclaimation.
That might be a different story for $50 or $100 Silver.
<< <i>This excerpt was taken from a different article about two weeks ago. I posted the link earlier.
raz
"In 1900 there were 12 billion oz of silver in the world. By 1990, the internationally respected commodities-research firm CPM Group say that figure had been reduced to around 2.2 billion ounces of silver. Today, that figure has fallen to about 300 million ounces in above ground refined silver. It is estimated that 95% of the silver ever mined has been consumed by the global photography, technology, medical, defence and electronic industries. This silver is gone forever." >>
I sincerely hope no one is paying money for that kind of "information" or making decisions about real money. It is the kind of half-truth mixed in with agenda driven propaganda that I hammer against. Annual demand is approximately one billion ounces. How in the world can total worldwide supply be 300 million ounces? Unless they have a very narrow definition of supply. How did Warren Buffett take physical delivery of 129 million ounces and hold that off the market without causing a serious disruption, if the numbers above are correct?
Berkshire Hathaway silver statement
The 12 billion ounce figure for year 1900, might be close to accurate and give folks some sense that the writer is connected to reality. Who estimates 95% of the silver is gone forever? Newsletters with an agenda? Gone forever? There are probably over 300 million ounces just in old U. S. 90% silver coins alone. Anyone with a Redbook handy want to do a quick mintage and weight estimate, with varying melt through rates? Another billion ounces in silverware and jewelry, just in the U. S. alone. <shakes head>
My guesstimate based on a one billion ounce annual demand is that there are probably about 50 billion ounces available above ground in all forms, coins, silverware, jewelry, salvage. My advice to readers, especially the newbies, don't believe a number just because someone publishes it. Think about what agenda that person, or that group may have.
SSRI states annual silver demand nearing 1 billion ounces
/edit typos/
Hi RedTiger,
Do you own shares in Silver Standard?
I bought some shares several years ago, and have been happier than a pig-in-poop ever since.
Robert Quartermain has done a great job with that company.
<< <i>Hi RedTiger,
Do you own shares in Silver Standard?
I bought some shares several years ago, and have been happier than a pig-in-poop ever since.
Robert Quartermain has done a great job with that company. >>
At the present time I do not have any positions in mining companies. I turned up their site as a what I see as a reliable source of information when some of the lowball numbers for silver supply first got posted.
Congratulations on the successful investment.
Readers, again, I have nothing to sell, no agenda to push, other than trying to be helpful. I know that there are many relatively new readers who will take something written on this board as truth and then go around repeating it, because it looks official looking.
reclaiming. That being said let's look at production of Au and Ag in Nevada. Nevada produces more gold and silver than all countries
in the world except China and Russia. So, looking at what's going on in Nevada will provide much information. So first up is Silver:
Year Production Avg Price during year
1997 25 mil/oz $5.90
1999 19 5.20
2001 17 4.40
2003 10 4.90
2005 10 7.30
I know that the average price is not what you read in the paper every day for the price of silver/per ounce. The above info is from
the Bureau of Mines and may refer to the market price minus the cost of production = net price to miner.
What is clearly shown is that production in troy ounces is dropping slowly. So, if silver is not being replenished at the same rate
that it is being used (supply and demand) then the value of the existing metal will rise (demand outstrips supply).
Gold is a different story. Due to the high cost of the metal it is more likely to be reclaimed and recycled. So, it should be noted that
gold supplies will be always on the rise as long as production of the metal exceeds that that is lost in daily/yealy use and not
reclaimed or recycled.
1997 7.8 mil/oz $331
1999 8.3 279
2001 8.1 271
2003 7.3 364
2005 6.9 445
Gold is produced at a much steadier rate and is not dropping in production like silver. Silver is generally a byproduct of gold as there
are no active silver mines operating at this time. Silver and gold run together in varying percentages (some mines will have more silver
per ton of ore that other mines) Silver is not worth mining directly as the days of the large lodes appear to be gone. No more Comstock
lodes of silver. So, gold is the main metal and silver, copper, etc are byproducts (there are copper mines that have gold and silver as
byproducts, however)
Make what you want of the above information. Do you think this chart supports the rising costs of silver. Will silver rise faster than gold?
Good luck and when you get the exact time to buy let me know, I'm waiting!
Oh my,
bob
gold production by country
So I don't know where Au & Ag pulled his info about Nevada being behind only China & Russia in Au & Ag production. Maybe total production of Ag and Au?
Proud recipient of two "You Suck" awards
Knowledge is the enemy of fear
<< <i>You can call me an idiot, but when people tell me that 95% of all the silver ever mined has been 'used' and it is 'gone forever', I say B***S***!! It is not pure silver anymore, it may be in chemical combination, but the silver is pretty much still on the surface of the Earth and is NOT 'gone forever'. Silver bugs should learn some chemistry before they open up with their scare tactics. >>
It is effectively gone. The form of the consumed silver is basically irretrievable and dispersed. True that no elemental changes have taken place through nuclear reactions and we haven't shot the silver out into deep space. But we aren't going to reclaim the consumed silver to any appreciable degree either, even if we sincerely wanted to. This isn't about dinnerware and Morgan dollars, but photographic chemicals and industrial use.
NSDR - Life Member
SSDC - Life Member
ANA - Pay As I Go Member
I took both posts from the Kitco metals site ( search for "hoard your silverware" for the initial post ). I have no opinion on the reliablity or objectivity of the articles which appear on the Kitco site, maybe they differ from the articles on the one you cited. I have no holdings in silver, nor any investment, other than the silver in my coins. I am far from expert in tracking any precious minerals, silver being no exception.
The Warren Buffet site given in your initial response doesn't work for me. I would be interested in seeing it, if you have another reference, especially if Buffet has been buying. The other reference in your post seems to support the articles I cited, essentially increased demand coupled with declining supply.
Your concern in protecting newbies from reading too much credibility into posts here is admirable, but perhaps misplaced. You are correct if you are saying that there's no guarentee the price of silver will rise in the short term, and I'm sure you are right if you find some disagreement in the numbers given for available global supplies. Is it your position that the production of silver is keeping pace with demand given the increase in investment, medical and industrial uses? Or, are you saying that if more people melt their jewelry and coins, the demand pace could be met?
None of the sources I've read ( albeit limited ) indicate any increase in production? In fact, they indicate the contrary. In other words, the cost of mining new silver is still not an
attractive option at current prices. I do know what that dynamic has produced in the energy business.
This demand may be thwarted by a lack of supply.
People should do the math themselves but when you do bear in mind that;
1.,= Silver demand is very price inelastic.
2.,= Silver supply is very price inelastic.
3.,= There is less silver in the world than gold.
We will test #2 in an extreme way should price begin to reflect reality.
<< <i>Australia, Peru, South Africa all produce more gold than US, Russia and China according to this:
gold production by country
So I don't know where Au & Ag pulled his info about Nevada being behind only China & Russia in Au & Ag production. Maybe total production of Ag and Au? >>
Sorry, have been at work all day and could not respond. Ok, ok, I blew it! Nevada lags behind S. Africa, Australia and China. Russia is not in the top 4 nor
is Peru. So, Nevada is 4th not 3rd. But the point is the same: silver production is falling and gold production is rising (at least in 2007). China has made
several large lode discoveries in 2006 that should start producing this year. China could push it's gold production from 240 tons to over 270 tons this year.
Silver has long been a byproduct. There will probably be no more Comstock lodes (mostly silver ore). With silver falling from the 25 million ounces produced
in 1997 to about 10 million ounces in 2005 (lastest year I have for full verified figures) in Nevada, then I'd say it's in a decline. Now, how about demand? Is
it lessening or increasing. I'd say that demand is probably falling as well. Two industries come to mind immediately. The photography industry has had a
dramatic cut in the need for silver with the advent of digital photography. The other industry is the battery industry. Silver was a good metal for batteries
until someone figured out that silver is a heavy metal and poisonous! So, silver use in that industry has dropped sigifcantly. There may be other industries
that have reduced their need of silver. Go figure. My crystal ball has been cloudy for decades and what I thought would happen either did not every happen
or was delayed by a decade or two. I don't believe that silver or gold as an investment should ever involve more that about 10% of anyone's net worth at
any one time. We should all have some but don't put all your eggs in one basket.
bob
Link to Nevada production
Link to 4th place source
<< <i>With silver falling from the 25 million ounces produced in 1997 to about 10 million ounces in 2005 >>
I thought I read that there were over 10,000,000 ASEs minted in 2006, does that mean the entire 2005 silver production was consumed only by ASEs?
Might as well add the silver commem's and silver proofs to that ASE number.
<< <i>
<< <i>With silver falling from the 25 million ounces produced in 1997 to about 10 million ounces in 2005 >>
I thought I read that there were over 10,000,000 ASEs minted in 2006, does that mean the entire 2005 silver production was consumed only by ASEs? >>
That's a wonderful question. They do have to use silver mined in the USA for minting coinage. They must have a whopping big stockpile to continue this minting
regimen.
hmmmmmmmmmmmm,
bob