Is there a real silver shortage?
There has been a lot of things that have been said about silver, particularly the supply levels of silver in the world. Since 2019, the world of precious metals has captured the imagination of a lot of people. After the whole Reddit trading Fiasco that set the price soaring to $30, silver EFT’s started to think that there was a real deficit of silver in the market. The now defunct WallStreetBets group decided to turn their attention from shorting the likes of Gamestop and other businesses with a dubious future to shorting silver in an attempt to run up prices on the precious metal. It almost worked. It managed to ignite a silver buying frenzy that roiled the markets and affected physical supplies. This caused the U.S Mint to put restrictions on the sale of silver coins. Mining company shares and future reached an 8-year high. This didn’t last long which showed how different the commodities markets and share markets work. Besides, the silver price was trending before the Reddit group stomped through. The scheme failed to account for one thing: silver is a physical object and in order to influence the price one actually has to own its physical form. This makes it a striking counterpoint to the virtual and digital nature of shares that often seems so divorced from real-world issues. To corner the silver market by creating a short squeeze a Wall Street trader would have to accumulate 262 pounds of silver. That is a lot of silver.
Still leading from that fiasco, the idea that we might be running out of silver. This was further reinforced by the Silver Institute when it published a report about the growing demand for silver. This surely created a frenzy amongst silver bullion buyers and others across the globe.
According to the Silver Institute’s report on the global silver market, the physical market might have a deficit of more than 7 million oz. This would be the first time the silver deficit has been this high since 2015. This would usually be counter-intuitive in a recession because in in a recession, industrial production usually goes down. This doesn’t seem to be the case this time around. The demand for silver is expected to rise by 15% or 1.29 billion oz. This would be the highest it has been in the last six years. It would seem all the components that feed into the demand are contributing to this silver spike. Industrial silver demand seems to be taking the biggest chunk with a record increase of 524 million oz. The demand is driven largely by the growth of electronic applications and the growth in the photovoltaic industry the rising importance of the green economy. Jewellery has been noticeably higher and according to the Silver Institute, it will grow by 32%. There is also a growing demand for silver coins and bars in various countries across the globe from the U.S to India. There has also been a rise in the number of silver buyers in Melbourne, almost as much as there are gold buyers. If you have invested in silver bullion you can sell silver Melbourne right now for a decent price.
Recently, the U.S Mint indicated that it was experiencing shortages of silver blanks required to produce sufficient quantities of Silver Eagles. There is a definite shortage, even if some people choose to disagree or else the U.S Mint wouldn’t have called people to start using their silver coins or even sell whatever they have to silver dealers. The United States Geological Survey believes the first element to get off the periodic table of elements will be silver, however there are a lot of variables that will affect that.
For instance, if the price of silver went up to $28 an ounce supply depletion is possible, however, at $158 an ounce, mining opportunities that were ounce not economically viable will be possible. The Silver Institute predicts the demand of silver for photovoltaic applications between 2019 and 2025, after which it is expected that it will flatten out. This will also be due to the fact that through the years the efficiency of solar panels has improved over the years. You need less solar panels to convert the sun’s energy into electricity. Regardless of all the surveys and the predictions as things stand now, the silver demand is high everywhere, even in Australia so if you have would like to sell silver bullion Melbourne now might be the right time.