The Premier Silver Resource Website
Visit GoldSeek.com
Visit GoldReview.com
Visit UraniumSeek.com

- CLICK HERE TO VISIT THE NEW SILVERSEEK.COM -
Live Spot Silver
 Bid|Ask 15.96   15.97
 Low|High 15.92   16.17
 Change -0.08 -0.53%
Dec 22, 2014 09:53:52 EST
 1 Month -0.47   -2.89%
 1 Year -3.44 -17.75%
 Low|High $14.65 $22.18
Navigation
Silver Market Articles
Silver Discussions at the Forum
Silver Company Links
Silver Market Updates
Silver & Gold Headlines
Silver Stock News
Silver Equity Quotes
Silver & Precious Metals Quotes







 
Are We Running Out of Silver?

By: Jeff Clark, Senior Precious Metals Analyst



-- Posted 16 June, 2011 | | Discuss This Article - Comments:

(Excerpt from the Casey Research 2011 Silver Investing Guide)

Silver has been on fire over the last three years ó substantially outperforming its spotlight-grabbing cousin, gold.

Because we believe this bull run is far from over, we advise investors to always maintain exposure to the precious metals markets. Even if you havenít yet participated in the run-up of both gold and silver, Iím glad youíre ready to take a look at the investment potential of silver.

The question every investor faces in a bull market is: Do I buy now, anticipating prices will continue higher ó and chance getting clobbered if a correction arrives? Or do I wait for a pullback and possibly miss out on big gains? Thereís risk either way.

Our goal in this report is to suggest various ways you can invest in silver, while underscoring the importance of patience and discipline. Investors must remain patient to avoid chasing silver, overpaying, and draining their cash. Instead, we recommend that you use temporary price declines to steadily accumulate the best silver stocks and your preferred form of bullion.

Looking back after this bull market has finally run its course, we think gold and silver will have amply rewarded those who bought smart, had meaningful exposure, and stayed the course.

Silver: The Lay of the Land

There is ample data on the silver market to consider, but there are two specific issues regarding  supply and demand that are critical to understand.

The first is industrial use. Demand from a number of industries that use silver has been flat or falling. Household demand for silver like cutlery, flatware, and candlesticks hasnít risen in ten years. Jewelry fabrication is up but a blip. With the shift to digital photography and image storing, use in photographic film processing continues to fall. And yet, total demand from industrial users keeps climbing.

So whatís driving industrial demand?

Uses for Silver Are Growing

Since 1999, consumption in electronics has increased 120%. Silver use in solar panels began in 2000, and usage is up 640% since. Silver was first used in biocides (antibacterial agents) in 2002 and, while a small percentage of total silver use, it has grown six-fold.

The point is that not only are the number of uses for silver growing, the demand within each of those applications is rising as well. This is important to keep in mind because, traditionally, the industrial component of silver tends to keep the price soft in a poor economy Ė and Doug Casey is convinced weíre on the cusp of the Greater Depression.

However, these increasing sources of demand are now more likely to keep a floor under the price in the future. In fact, the Silver Institute forecasts that total industrial use of silver will rise by 36% over the next five years, to 666 million troy ounces/year. Thatís a lot of silver, meaning this portion of demand, which is roughly 60% of all fabrication, isnít letting up anytime soon.

The second issue is mine supply. Silver mine production has been increasing over the past decade, largely due to rising prices, allowing companies to ramp up production and bring more metal to the market. In fact, global mine production is up 33% since 1999. Meanwhile, total demand, as youíll see in the chart below, is also rising.

Mine Production Canít Keep Up with Demand

So whatís the concern?

In spite of miners digging up more and more silver, production alone canít meet global demand, and the gap has to be filled by scrap silver coming to market.

And thereís a catch with scrap. While scrap metal comprises about 20% of silverís total supply, many of these new applications are difficult to reclaim. Some applications contain such small amounts that theyíre uneconomic to recapture, such as many biocidal and nanotechnology applications. With others itíll be a long wait. Solar panels, for example, have a 20- to 30-year life. Still others are waiting on more effective recovery programs; more than half of all silver in cell phones, TVs, computers and other electronics, for instance, still ends up in landfills.

In other words, a growing portion of the silver thatís consumed wonít be returning to the market anytime soon.

[Read and download the entire 17-page Special Report, the Casey Research 2011 Silver Investing Guide, absolutely FREE. Find out which are the best forms of silver to buy and when, plus a bullion expert discusses the looming silver shortage. Click here to read it now.]


-- Posted 16 June, 2011 | | Discuss This Article - Comments:



Article Archives

SilverSeek.com is presented to you by:

© 2003 - 2011
SilverSeek.com, Silver Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of SilverSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on SilverSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Disclaimer

The views contained here may not represent the views of SilverSeek.com, its affiliates or advertisers. SilverSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of SilverSeek.com, is strictly prohibited. In no event shall SilverSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.