But it could bankrupt you in the meantime. You wait years for silver to make a move and then when your back is turned, off it goes to the races. What can I say? There are lots of powerful narratives to propel silver higher. It should be just 15 times. Enjoy the ride. But they can also end a lot quicker than you think. And above all — manage your risk! The one thing that can pop the house price bubble. More than two billion ounces of silver have disappeared from the market over the last ten years and we could be facing an annual shortage of more than million ounces by Not only is demand for silver surging and annual supply growth going nowhere but much of our available silver is being buried in public landfills.
As a major component in batteries, CDs, circuit boards and other electronics, people are literally throwing their silver in the trash. Even as our supply of silver disappears from the market, demand is building every year.
Demand for silver is mostly from three important categories ; investment, jewelry and industrial uses. Demand for all three major uses of silver have increased over the five years since but the real story is in the growth in investment and industrial uses.
Investors have rushed to silver as central bankers around the world print money to cover spending, destroying the real value of currencies. Demand for silver coins and bars has jumped at an annual pace of The surge in investor silver demand as a safe haven asset is nothing new. When the U. While the annual pace of growth in silver demand for industrial uses has been more modest 1.
Silver is used in the production process of nearly every industry from electronics to homebuilding and medicine. Even slower growth in demand amounts to huge additional physical demand, more than 11 million ounces in This growing industrial need is an urgent demand. While people may be able to substitute their jewelry demand for silver with another metal and investors may be convinced to sell at higher prices, industrial demand is non-negotiable.
The growing need for silver in our industrial progress will not be stopped. In comparison to the rapidly rising demand for silver, especially in investment and industrial uses, the annual supply of silver is much more questionable. In the past, sales of silver holdings from governments and scrap could fill the gap between higher silver demand and slow growth in mining.
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Backwardation is a phenomenon seen in the futures market, which futures traders need to monitor. A forward curve is said to be in backwardation when futures are traded at a discount in comparison with spot. Gold backwardation means that traders could potentially gain capital versus simply buying gold right away when holding gold futures until the contract expires.
The Commodity Exchange Inc. Comex is an American commodity exchange where buyers and sellers electronically meet to invest in precious metals. Traders, especially arbitrageurs, make use of contango when it widens or narrows from normal values. Gold contango creates arbitrage opportunities in this particular metal.
In a futures contract two parties agree to exchange an asset gold, currencies, stock indexes, hog bellies for a price agreed upon today the strike price but with delivery to take place at a specified future date. The party agreeing to buy the underlying asset, is said to be "long" and hopes the price will go up, and the party agreeing to sell the asset is said to be "short" believing that the price will decline.
Gold futures term usually refers to a futures contract that is based in the price of gold. Shortage is a sad state in which something needed cannot be obtained in sufficient amounts. Fortunately, in a free market without government interventions in the price mechanism, shortages occur rather seldom and are temporary. Imagine the world without the production of silver. The end of the extraction of the white metal. The termination of all silver mines. Sounds depressing, right? It would not be a world without the chemical element with the symbol Ag, as fortunately a lot of bullion is held as investments coins, bars or jewelry.
But still, it is hard to imagine the world without silver mining. Such gloomy visions are connected with the idea of peak silver.
Chemically, silver is an element with the symbol Ag and atomic number It belongs to noble metals. It is much more abundant than gold, but silver is still one of the least naturally occurring metals.
In pure form it has a brilliant white metallic luster. Silver served as money for thousands of year until the gold standard was introduced in the XIX century.
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