Surging Investors Demand To Send Silver Prices Higher
Silver prices continue to be under pressure after reaching $21.00 an ounce in June. But don’t let this bother you whatsoever, as silver prices could soar significantly going forward.
It must be understood that demand for the gray precious metal remains phenomenal. You see, silver is usually considered an industrial metal. Many investors currently believe that industrial demand around the world is low, so as a result, they are pessimistic about silver prices.
But here’s what you need to know; the demand for silver from investors is soaring. This could make up for the missed demand on industrial side (if it actually turns out to be as expected) and take silver prices much higher.
If you look closely, you will see there’s a silver rush currently in play. Investors just want the precious metal, no matter where silver prices trade.
Consider this: year-to-date, the U.S. Mint has sold 29.21 million ounces of silver in American Eagle coins. (Source: “Bullion Sales/Mintage Figures,” U.S. Mint, last accessed September 7, 2016.)
But that isn’t all. In the first quarter of fiscal year 2016, ended on April 2, the Royal Canadian Mint solid 10.6 million ounces of silver in Silver Maple Leaf coins. In the same period a year ago, the mint sold 8.9 million ounces of silver in similar coins. This represents an increase of 19.3% year-over-year. (Source: “First Quarter Report,” Royal Canadian Mint, last accessed September 7, 2016.)
Looking at the demand from the other side of the world; in the first seven months of 2016, Australia’s Perth Mint sold 8.32 million ounces of silver. This was 134.1% higher than the same period a year ago. (Source: “Perth Mint Gold and Silver Bullion Sales Weaken in July,” CoinNews.Net, August 12, 2016.)
Now, bringing in some perspective; if you add the silver sales numbers from the three mints mentioned above, the sum is 48.04 million ounces, or about 1,362 tonnes. How significant is this?
Well, in 2015, global silver mine production was 27,300 tonnes. This means that just three mints alone in the first few months of 2016, have sold roughly five percent of global mine production, a fact that shouldn’t be ignored. (Source: “Silver,” U.S. Geological Survey, last accessed September 7, 2016.)
You have to keep in mind that the data we presented earlier is of selective coins and not for all the sales for silver bullion at these mints. Also, remember that there are many more mints around the world.
Silver Prices Target For Next Few Years?
Dear reader, don’t ignore the investor demand for silver whatsoever. It’s huge and many are overlooking it.
I will be bold here and say this: it won’t shock me if demand creates a shortage in the silver market, and this phenomena sends silver prices spiking higher in a very short period.
How high could silver prices go? I have never been a big fan of providing precise targets; it’s impossible to do so. However, I wouldn’t be surprised if two years from today, we look at silver prices trading at $20.00 an ounce and say, “Wow, silver was trading for pennies on the dollar.”