Jon Nadler of Kitco has put together some information that every silver investor should have.
Based on hard numbers, which are supplied in the full written piece, Nadler makes points that do not bode will for the silver bugs waiting for the elevator to $60 or $100 silver.
According to the article, industrial demand is declining for the metal as new discoveries are being made. At the same time, many individuals out there are taking advantage of these higher prices in silver and turning in scrap metal and jewelry for cash. He also goes on to state that world central bank supplies have been dwindling since the Hunt brothers era in 1980, from 11,200 tonnes forty years ago, down to roughly 1,700 tonnes today. Not because of usage however, rather due to sales transactions of the white metal.
The lightened demand in the industrial sector is due to the recession and reduced consumer spending, and for silver to reach astronomical numbers, demand must increase. The only way demand will increase is if our economy makes a strong come back, and we all know how strong that comeback has been.
The investor interest has made up for some of the reduced usage and demand, but he points out that the entire demand from this sector can be matched up to one mans purchase in the recent past. That man would be Warren Buffet, when he made the play on silver and bought over 120 million ounces of the white metal. ETF’s are also a strong backing of higher priced silver, but all it would take is a change of heart, or sudden profit taking from one of these ETF’s and a major correction would be upon us.
James Steel of HSBC claims the current industrial demand can maintain $15 silver, but in no way can account for $25 silver.
Due to the percentage increases in silver, if there is a correction in precious metals, silver could take the brunt of it and have the largest percentage declines.
If silver has been the fuel to your earnings lately, it may be time to look under the hood of your investment machine to make sure everything is running smoothly. Nadler does exactly that with silver supply and demand. Full article can be read here;