2015 RECORD SILVER INVESTMENT RATIO: 1% = 30%

It looks as if 2015 will turn out to be a record year for silver investment demand.  Not only will total silver bullion demand be the highest in many decades, it will account for nearly one-third of total fabrication demand.  This is a huge increase when we consider less than 1% of investors are buying silver.

We can thank the huge surge of physical silver investment in 2015 from record Indian (Silver Bar) and North American (Official Silver Coin) purchases.  According to ETF Securities Q3 2015 Precious Metal Report, India is now on track to import a stunning 350 million oz (Moz) of silver in 2015:

ETF-Securities-India-Silver-Imports-2015

In addition, India accounted for 71% of total silver bar demand in 2014 (2015 World Silver Survey).  Compare that to the total U.S. and Royal Canadian Mint’s Silver Eagle & Maple Leaf sales of 73.2 Moz in 2014.  These two Official silver coin sales accounted for 68% of total Official Silver Coin sales in last year.

While it’s true that Silver Eagles and Maples are sold to other foreign countries, the majority of Official Silver Coins are purchased in North America.

Physical Silver Investment Estimated To Hit Record In 2015

Not only will physical silver investment demand hit a record in 2015, it will account for nearly one-third of total fabrication.  This includes industrial, jewelry and silverware demand.  If we look at the chart below, we can see the huge increase in physical silver investment demand since 2006:

Physical-Silver-Investment-Demand-vs-Fabrication

In 2006, investors purchased 49 Moz worth of physical silver bar & coin compared to 884 Moz of industrial, jewelry and silverware demand.  Thus, silver bar & coin demand was only 6% of total fabrication demand (including bar & coin) in 2006.  However, this physical silver investment ratio surged to 24% in 2008 as investors purchased record silver bullion during the collapse of the U.S. Investment Banking & Housing Markets.

Even though the amount and percentage of physical silver investment fluctuated over the next several years, it is estimated to reach a record 260 Moz in 2015, accounting for 30% of total fabrication.  The figures from 2006 to 2014 are based on data from the Silver Institute.  The Silver Institute publishes figures obtained from Thomson Reuters GFMS who produce the World Silver Surveys.

I estimate total silver bar & coin demand to reach 260 Moz in 2015 based on record Official Silver Coin demand as well record India silver imports.   My 260 Moz figure is only 16 Moz higher than the previous record set in 2013 at 244 Moz.

Regardless, only 1% (actually less than 1%) of investors in the world are buying physical silver.  Which means, 1% of investors are controlling 30% of total silver market demand.  While the rest of the world is consuming silver in the form of industrial applications, jewelry or silver ware, just a fraction dominate all physical silver investment on the planet.

This is a stunning statistic.  Eventually, we are going to see 1-2% more investors wake up to the fact that silver is one of the most undervalued assets in the world.  When this occurs, annual physical silver investment demand will surpass 500 Moz, thus totally overwhelming the market… and price.

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29 Comments on "2015 RECORD SILVER INVESTMENT RATIO: 1% = 30%"

  1. 30% is incredible. If the trend of the past 7 years continues it will not be long before investor demand dominates the price of silver.

    Mike

    • You are right on target. That is what it will take for silver to rise in price. Demand must
      dominate silver supply. The silver investor keeps “stacking” and telling all who have
      ears to hear to buy silver. If and I mean if another million people world wide begin to
      buy silver then silver will rise. The miners are already losing billions annually because
      the “spot price” is well below production costs. These are the present drivers for silver.
      As you see by today’s price, all other factors, threats and forecasts are not doing a darn
      thing. Economics is supply and demand.

      • Economic supply & demand doesn’t set the silver price [other than premiums above spot] due to the COMEX control. But ultimately the COMEX control will be broken by overwhelming physical demand over available supply. Hard for me to imagine that taking as long as two years. I sold silver at the 1980 high and have a degree in Geology so I have some perspective and have been following this. That said Steve St. Angelo know a lot more than me about this.

  2. The fact that the physical silver market has it’s own “1%” is meaningful and the implications need to be unpacked.

    The pie is not inflating, it remains 1 billion ounces per year. The 1% is buying at an increasing rate so they own an increasing piece of the pie. Yet it is becoming cheaper to own more of the total pie. This is the ultimate in disinflation. Consistently increasing share, consistently decreasing price. Even without the # of investors going above 1%, you will see years investors buying 35-40% of the total in the next 5 years. And…if Harry Dent is right about PM price crash (not that I agree), the 1% will have sufficient cash to purchase well over 50% of all mine supply.

    • Jay,

      Actually, the number of silver investors has doubled since 2008. However, it’s still a small percentage. So, if it went from 0.3% to 0.6%…. the percentage doubled but it’s still below 1%. Furthermore, the wealthy are buying at least 50% of silver investment demand.

      So, the number of investors are increasing, but it still won’t matter until it moves to the 1.5-2% figure. At that point, there won’t be enough supply.

      steve

  3. K.I.S.S. ( Keep Investing in Stacked Silver ) ?

  4. “This is a stunning statistic. Eventually, we are going to see 1-2% more investors wake up to the fact that silver is one of the most undervalued assets in the world. When this occurs, annual physical silver investment demand will surpass 500 Moz, thus totally overwhelming the market… and price.”

    A little to conservative Steve, I think.
    Eventually we will see 8 – 15% wake up as if overnight & they will be considered the lucky fore runners that totally overwhelm the market; Another 25% or so will then monkey see-monkey do, the very next day, but there will be no Silver to be had…and we’ll get to see limit ups x 3 and then it’ll run baby…….for many days!

    • ” and we’ll get to see limit ups x 3 and then it’ll run baby…….for many days! ”

      Many days ? That’s way too conservative . How about many years ?

  5. This portends a very, very tight market for silver in the near future.

    That depends on the validity and “truthfulness’ of the statistics relied upon.

    The Silver Institute along with it’s close ‘cousin’ The World Gold Council, are joined at the hip under the roof of Thompson Reuters GFMS (gold field mineral services) which is still closely associated with the LBMA.

    This group of “wolves” in sheeps clothing, have been known to produce some very questionable statistical articles in the past. Would you completely trust a leopard who changed his spots?

  6. Steve,

    What is the basis of the assertion that “only 1% (actually less than 1%) of investors in the world are buying physical silver.” If that is indeed the case then that 1% has been buying at an incredible rate. Isn’t it possible that an increasing percentage of the investor world is awakening to the fiat fiasco and has joined the bandwagon?

    I believe that this is important because it is ultimately the “markets” (read world investors) realization that the paper market is a house of cards that will bring it down. It is their continued trust in the dollar that allows the facade to be perpetuated. If more investors are not joining the silver stackers, then the merry-go-round could continue for a much longer time. While this may be good for those of us that don’t feel that we have stacked enough it could significantly postpone the day of reckoning.

    Thanks for another insightful and informative report.

    Buy for cash and stash,

    SteveW

  7. When the reckoning is upon us and everyone and his brother-in-laws ass knows hard money, silver and gold are the only real money, supply is slim to none. At what price would you be willing to part with your stack ? I have been thinking on this some, what would I deem to be “enough” of what not fiat trash surely but equal to what 50$ an oz. 100$ 200$ Trade you a monster box for your lake house? A tube for that truck ? I mean what will it look like, this new market. Anyone care to guess or share an idea of how it may play out?

  8. I realize it’s only antidotal evidence but in my circle I can easily identify 99 friends who have no interest in PMs; but talk about action in the stock mkt.

    Might be interesting if everyone here recorded their own observed statistic.

    • I have convinced a number of friends to start acquiring physical metal. It can be done. You just have to open the door enough for them that they begin doing their own research.

      Mike

      • You have a real educational talent Mike. And probably great communication skills. People I know are older [60ish] and I may as well speak to a wall if they aren’t already questioning traditional investments.

  9. Silver Stackers = the new Hunt Brothers. We need to send a strong message to all that we the stackers want to have silver as money again. We don’t believe it is in the best interest of we the people to give the Fed a monopoly on money as competetion in anything produces the best results.

  10. APMEX dropped their Silver Eagle premium again. The last six premium changes have been down. Care to guess where it is going next? It still costs $2 over spot to produce these.

    APMEX premium history since we heard people predicting these premiums may be here to stay: 5.49, 5.19, 4.99, 4.59, 3.99, 3.79, 3.69

    Mike

    • There was never shortgage in 1000 ounces bars so the premiums were due to collapse.
      GAFA has been the real game in town and will most surely be for the next 5 years.

  11. jsauai , what’s ironic is that if enough American people saw the importance in putting aside , say even 100 ounces of silver , there would be a real possibility that the physical price could be taken away from the paper price.
    All that it has to be classified as would be a good insurance policy. Get the word out.

  12. Just came here to inform you all that the COT structure suggests that precious metals are again ripe for a pounding. Bullion banks have accumulated some massive short positions that they’ll be trying (and in 99% of the cases their tries are successful) to cover at lower prices.

    • There seemed to be shortages of Philharmonics and premiums went up. But it was short lasting. The physical market has normalized and the perth mint launched its kangaroos.

  13. much less than 1% is buying silver in america…
    even less worldwide…

    what if silver becomes money again…

  14. Since 2006 I have been saving copper coins then maybe about two years ago I started investing in silver too since I did my research. At first I had no interest in silver now I have around 400 ounces.

    It’s easy to be a sheep and not know the potential for silver. I have spent a small fourtune aquiring this silver but I have no regrets and just want more and more. I am taking it off the market just for you banksters!

  15. It’s easy to get lost in all of the rhetoric going on about how the current financial market is being kept alive.
    They have to keep fabricating the truth to keep the big lie going , example pumping counterfeit and making wars.
    With lousy employment levels compounded with a GDP that’s sucking wind , and interest rates that can’t budge upwards , there will always be that real possibility of a snapping sound of the S&P plummeting over night .

    The important facts surrounding physical silver can’t be denied .

    A parallel to the amount of oil available , as an example , is just one reason why the future physical price seceding from paper will take on it’s own life some day.

    Industry may have slowed down a bit but that is still a big source using physical. It can’t be totally ignored.

    For now the hands on the controls who can make prices plummet are still in place so the giant farce will continue.
    This physical believer will not waver to the high-falutin b.s.being spewed out among the information forums.

  16. While reading about the small percent of the population having an interest in silver, I am wondering about the funds, pension funds, state worker and teacher retirement funds, etc.

    Sure I realize the funds are concerned about return on investment; but at some point they will shift to concern about return of investment.
    Nothing at the moment pays a good return leaving only price speculation in a toppy stock mkt, so where do the funds turn for long term security?

    Stacking PM’s may not be PC; but political correctness is something folks tend to force on others while quickly giving up the agenda when it affects them personally.
    What will happen when the funds figure out PM’s are the only game in town?

  17. I believe its more like one tenth of one percent buying……but if 1% was buying 260 million ounces annually for coin/bars that equates to just under 3.72 oz. per year per person. Break down further that would be .31 oz. per month….so if 1% is carrying the load we better pick it up!!!!! Because if we bought 5 oz. per month per person (under $100) that is only 60oz. Per year which would overwhelm the system (4.2 billion oz.)because not that much is produced annually or even near it!!!!! This is a simple numbers game boys n girls…..the key is to buy buy buy til it hurts….then buy some more!!!!!! We can win this by……death of a million cuts….this is a marathon keep running!!!

  18. APMEX updated their premium again. Can you guess if it went up or down? I am amazed at how many people are willing to pay those insane premiums when we know they will soon be lower. Still costs $2 over spot to make a silver eagle. No changes there. 🙂

    APMEX premium history since we heard people predicting these premiums may be here to stay: 5.49, 5.19, 4.99, 4.59, 3.99, 3.79, 3.69, 3.29

  19. What did i say?It seems that during a zero interest rate policy no Inflation will appear.This can last many years.

    Japane is the proof for this.20 years now they are in a Rezession and nothing happens.
    It’s not good for the real economy but it protects the financial System.

    What will stop this?I see no end.Again- the trick is that all central Banks can buy the debts from the states.

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