Americans Are Now The Top Silver Investors In The World

According to the figures in the 2016 World Silver Survey, Americans now lead the world in physical silver investment.  This is quite an interesting change as India has been the number one market for silver bar demand in the past.

For example, Indians purchased more than 100 million oz (Moz) of silver bar in 2008 of the approximate world total of 125 Moz.  However, silver bar demand is only one segment of total global physical silver investment.  There is also Official Coin demand.

If we look at the data for 2015, India continues to rank as the largest source of silver bar investment int he world:

Global-Silver-Bar-Demand-2015NEW

India purchased 82.5 Moz of silver bar in 2015 while the U.S. ranked second with 51.8 Moz, Europe came in third with 12.7 Moz and China placed last at 3.8 Moz. (2016 World Silver Survey, pg. 22 & 23).

The United States experienced a huge increase in silver bar demand in 2015 due to the inclusion of “Private rounds and bars” now in the data.  So, all private silver bar and rounds sold are lumped into the Silver Bar category.

Even though India ranked first place when it comes to silver bar demand, if we include Official Coin sales, the U.S. is now the global leader of physical silver investment:

Global-Physical-Silver-Investment-Demand-2015NEW

In 2015, the U.S. Mint sold 48.6 Moz of Official Silver coins while India ranked fifth at 8.9 Moz.  If we add silver bar demand to these figures, the U.S. was the leader at 100.4 Moz while India came in second at 91.4 Moz. (2016 World Silver Survey, pg. 25).  The rest of the world accounted for the remaining 100.5 Moz of the total 292.3 Moz of Silver Bar & Coin demand.

I could not break down Silver Bar & Coin demand in the ‘Rest of World” category because there isn’t enough data.  The World Silver Survey’s do a much better job than the CPM Group’s Silver Yearbook in reporting silver investment figures.  However, they only publish the amount of Silver Coins sold by each of the Official mints, not the actual demand.

There is no way of knowing how many U.S. Silver Eagles end up in foreign hands, or how many Canadian Maples or Australian Kangaroos are purchased by Americans.  The data is not that accurate.  However, I do believe Indians purchased the overwhelming majority of their own Official Silver coins.

Furthermore, the Silver Bar & Coin demand of 100.4 Moz for the United States may be quite conservative.  Why?  Because, I believe Americans buy a heck of a lot more foreign Official Silver Coins to more than make up for the amount of U.S. Silver Eagles exported abroad.  We must remember, Americans don’t have to pay a vat tax when they buy silver.

What is also interesting about the data is that China ranked fourth behind Europe in silver bar demand.  Even if we assume that the Chinese purchased all of their Official Silver coin sales of 10.7 Moz in 2015, their total Silver Bar & Coin demand would only be 14.5 Moz.  While the Chinese are the biggest buyers of gold in the world, silver still hasn’t caught on as it has in the U.S. or India.

Lastly, according to the data from the 2016 World Silver Survey, Indians purchase their silver bar as a short-term investment vehicle by taking advantage of lower prices or to profit from any differences in the spot or futures market.  However, the majority of Americans purchase their silver for a long term BUY & HOLD strategy.

Which means as the Chinese consume most of the gold in the world, Americans are now the biggest silver investors.

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23 Comments on "Americans Are Now The Top Silver Investors In The World"

  1. Steve,

    I have been analyzing the sales on ebay for the last year, I think the ratio between silver bullion versus sovereign silver coins sales is at least 5 to 1. It can’t be 1 to 1. The above ratios don’t match with what I am looking at.

    my own stack is 10 to 1. I am having hard reconciling the numbers.

    • Joe,

      While Ebay is one source of silver investment demand, it’s not indicative of the overall market. Investors LARGE & SMALL buy one hell of a lot of Silver Eagles and Maples.

      steve

      • I am not sure whether ebay ratios are good indication of the overall market buying behavior. But I can tell you comparing ebay to APMEX (biggest bullion retailer) , sales on ebay are at least 10 times more.

        I think ebay is the number one source of silver buying. remember most bullion retailers have ebay stores.

        • One other evidence to my argument is the 10 ounce bar now selling at a premium equal to or greater than silver eagles. why is this happening? IMO, the 10 ounce silver bar is the most sought silver product across all mints. Every 10 ounce bar sale on ebay sold before it expired.

          My argument is I think the total silver demand in USA is much much higher than what is reported assuming the sovereign coin sales are accurate.

      • Steve, or anyone else for that matter, can this be confirmed:

        Dahboo77 just released a video and in it he claims people are having trouble sourcing physical SILVER or getting prompt delivery. Dahboo77 is very cutting edge on breaking news and in my opinion reliable. Please take a listen, and for those wishing to save time just cut to 2:45 in his video. This is very strange……..check it out….

        https://www.youtube.com/watch?v=np7M5iecB6k

  2. Meanwhile, we keep getting survey reports weekly that around 40 to 50% of Americans cannot come up with a few hundred dollars in an emergency, have no savings, etc. Over a hundred million are utterly out of work, and m,any workers have trash jobs. So who’s buying the silver? What’s the law on bankruptcy – buy $50,000 in silver on credit cards, make minimum payments for a year, then go belly up and await catastrophes that make you rich?

    • The law is….in bankruptcy procedures, on paper and under oath, that you disclose financial assets. Not doing so is perjury. Since bankruptcy is adjudicated through the federal court system, perjury may be punishable [by time spent] in Federal prison if convicted.

  3. But it’s true that the consumption behavior in the USA is extreme.History shows that those countries make more and more debts.Germany for example is a typical country which safe money.

    The “sparquote” is very high.In the future this has to change in the USA.The times of making unlimited debts is over.

    As i told you nearly one year ago the difference between poor and rich is to extreme.The distribution of the money must change.The american dream from “Tellerwäscher zum Millionär” is over.
    The politician will not make this change.The folk has to do that.

  4. “I believe Americans buy a heck of a lot more foreign Official Silver Coins to more than make up for the amount of U.S. Silver Eagles exported abroad.”

    Rounds and foreign mint coins are the vast majority of my stack alond with a smattering of bars.

  5. Charley Z says: First, we can’t know what the volume is of American Silver Eagles being purchased and taken home by foreign investors. I know that the ASE is a prestigious coin, a “statement,” that many foreigners invest in. And has been said here, there is no VAT in the U.S.

    Second, Americans buy a huge amount of foreign-minted silver coins. Especially when the supply gets tight and the premium on ASE’s goes up, Americans invest in Canadian Maples, and British and Austrian and Australian mint products. I know a guy who bought a 500-coin monster box of Canadian Maples, several times over, because the premium per coin was .25 to .35 less. Makes sense, as you can get more ounces for your invested dollars.

    I don’t think there is a way of quantifying the volume of silver going in each direction. I talk with several bullion dealers on a regular basis, and I can tell you that an occasional purchase in one direction or the other does in fact overshadow many, many smaller deals.

    Third item I’d like to address is that there are segments of the American population which I describe as “tightly-knit communities” in which, for example, 90% silver coins are purchased in full bag quantities for every family member, all at one time. For whatever reason, this is sort of a ritual, and a bullion dealer who cannot supply the entire amount all at one time, does not get the business. This volume purchase is long-term investing.

    The statement about purchasers in India buying bars for speculation, is the first I’ve heard of that, and although I think it has no bearing on future pricing of silver, except to indicate keen awareness of it’s “value,” I am skeptical of that report. Indians use silver to make jewelry and hold jewelry as their “forever” investment. Those speculators would likely plan on selling it to a local jeweler, scalping a small profit. There is a VAT tax in India, so unless the stuff was smuggled in, there is not much room for profit. There are some interesting laws in India whereby if the jeweler proves that something like 80% of his production is exported, he avoids the tax. This further skews the chance of successful speculation.

    Lastly, how does this enter into the silver bullion calculations? The recently bankrupt Northwest Territorial Mint was either a main purchaser or exclusive purchaser or smelter / conduit for silver emanating from PAAS (company on the NYSE) Pan American — Silver) They produced rounds. Who bought all those rounds? What percentage went to Americans? What percentage went right back to the producer, as “payment?” I think the total volume was huge, as PAAS states in their quarterly reports. I don’t even have confidence that any reported figures from NWTM were ever accurate. I mean, the owners apparently didn’t keep honest books so why would they necessarily report accurate production? This annual number alone might have been several million ounces? How to account for it? What entity is doing that smelting now, and how are they reporting it? Domestic rounds produced? Imported ounces contained in dore bars?

    My conclusion about all this is that it doesn’t really matter that Americans appear to be buying more ounces of silver than India is buying. There is so much cross-border dealings that it’s all a moot point. It’s a world without finite borders. What matters is how much is available if I want to buy a million ounces at a time, or ten million ounces, and will my purchase drive the price higher or will I actually be able to get a better deal? And what the effect is of the net purchasing vs dis-hoarding by each segment of the community.

    I was visiting one of the LCS (Local Coin Shops) in my general area last week, and had a good discussion with the owner. He told me there is very little interest recently in either buying or selling 90% silver coinage, and he pointed to some partially- filled buckets near his desk and said there hadn’t been much “change” in the past month or two. Only one recent sale of size and that was for circulated Kennedy half dollars. While I was there, the store bought ten silver eagles from one guy, and sold a total of seven to a total of three customers. This is a store with overall good volume. They sold several gold coins (Austrian and U.S.) and they bought two small lots of gold jewelry and one lot of silver jewelry, while I was there. They also gave bad news to at least three people who thought they had really valuable old coins. Point is, very little domestic demand for silver anything these days, and similar interest in selling it.

    I think ebay accounts for a small percentage of the total sales volume. Most coin dealers work on a much tighter margin than is forced upon ebay sellers. And especially if you want to buy any silver coins other than newly minted material, I advise you to visit Local Coin Shops so you can SEE what you are buying.

    Counter-party risk is of paramount importance.

    Charley Z

    • Hi Charley Z,

      I was in Orlando a few weeks ago, and I visited five Orlando-area locally owned coin shops. The coin shops in Orlando have always been interesting given the big FUN show (the largest numismatic coin show in the world – although they have been forced to change the venue the past two years) and the smaller, but still big, FUN show still held in Orlando during the summer.

      This was the week before the recent upswing in prices.

      What I learned was a bit different, and was consistent for these two cities:
      [1] They kept very little stock of govt minted 1 oz silver coins, which is understandable given the price swings and not wanting to tie too much cash flow up in inventory.
      [2] MOST indicated they were “wiped out” of ALL 90% “junk silver” they had on hand during the recent drop in spot price. They all had “buckets” of “junk silver” and a customer came and “wiped them out” (it amazes me sometimes how dealers all sound the same).
      [3] They also had paltry stock of foreign “junk silver” that was minted by the Franklin Mint for foreign governments, which is not backed by the U.S. government, but minted by a U.S. mint and sells at a much lower premium, (e.g., Panamá, Venezuela, Philippines, Dominican Republic, Honduras, Cuba, even Colombia.

      What was even more interesting was how they quoted government minted 1 oz silver coins, like American Silver Eagles, Canadian Maple Leafs, Australian Kangaroos, Austrian Philharmonics, Mexican Libertads, etc. They added whatever their coin shop premium was to the premium of wholesalers like Provident Metals above spot price.

      This makes perfect sense, as they need to earn a profit as well, but was rather odd and kind of sad was how they made no attempt to hide the fact who they ordered their coins from. All except one purchased their coins online at the same premium over spot that I could order myself.

      Anyway, just some interesting observations, but in the Southeast, junk silver is hard to come by in general and has been for some time now.

  6. 10-ounce bars sold on ebay…

    I don’t know what folks are thinking. It is so, so easy to counterfeit a silver bar. I laugh when I think that I have molds shaped like rabbits for making Easter chocolate bunnies. My son and his wife are school teachers and they work with students to make soap using molds. My neighbor melts lead for his bullets, I think, or maybe he makes lead sinkers for fishing. A few years ago I bought a 10-ounce silver bar at a garage sale, for $50.00, when the price was about $5.50 per ounce. I don’t like bars, so I tried to sell it to a dealer. The first two guys said it looked suspicious because they could see a copper tinge. The third dealer said that was normal and he recognized the hallmark, and he bought it.

    I’m saying all that to preface that if you can create a 1600 degree furnace, or whatever the actual melting point is, you can probably counterfeit a bar and off it to some guy on ebay who won’t know the difference until he goes to sell it. It’s a horrible way to invest. Why anyone would want to own those rather than silver eagles or even rounds, is beyond me. I wonder what percentage of all the bars sold on ebay are counterfeits? My, what an easy way to exchange phony product for hard earned money. I say, “stay away from bars of any size.”

    I frequently say that the most difficult silver coinage to counterfeit is the 90% junk silver. If we are talking “average circulated coinage,” every coin is different. That coinage is very well known and recognizable. So I don’t think counterfeiters will bother… at least, at today’s prices.

    Counter-party risk is of paramount importance.

    Charley Z

    • “Why anyone would want to own those rather than silver eagles or even rounds, is beyond me”

      1] It’s more compact than rounds
      2] the premiums are much lower per ounce than eagles

      Also the two dealers that didn’t want to buy your ten ounce bar? If they didn’t want to buy because THEY would have trouble selling, OK, but if is because it looked funny they didn’t know what they were doing. It is easy to sell ten ounce bars to dealers.

  7. Unfortunately this damned VAT on silver in europe but especially in china is a real issue for a rising investment demand.
    It does not look that china will change this any time soon…

  8. What does this all mean to the price of silver going forward? Is my prognostication of $20 per ounce
    by 2030 intact?

    • You are way too much positive !

    • Apparently it is in your mind.

    • “What does this all mean to the price of silver going forward?”
      Boy Joe , that’s a loaded question ! How about we look at it two ways…paper and physical.
      If the world hinges itself on paper moving forward then you have a pretty good chance at arriving at
      your twenty target by 2030.
      However if the physical has anything to say about this quite the opposite will occur.
      Considering that there is more then one dynamic going on present day regarding the call for physical .
      Keep in mind that it was recently reported by a worthwhile source that for every one ounce of gold being mined out of the ground there is just nine ounces of silver being mined.
      By all indications moving forward , it looks like you will be by yourself enjoying your twenty dollar celebration come 2030.

  9. Like i said.The german highest justice agreed that Mr.Draghi can by bonds from all countries.Each financial hole which appear can be closed with the big money bazooka.

    The newest joke is, that Draghi buy bonds from companys.Germany is in response with 27% of the debts form the EZB.The german government sit and wait.No word about that.

    There is no market anymore.We have the communism in the financial system.This will end badly.
    Shure we have not so much debts like the USA.But our banking system is in a much more worse state.

  10. How is this snowball system breakable?Draghi buys stocks of banks.You understand?
    Their books are full of government bonds.Trick 17.

  11. Mike in Denver | June 21, 2016 at 8:24 pm | Reply

    Ted Butler believes JPMorgan is buying silver for China. Have you considered that some of this American demand might be Chinese demand in disguise? It doesn’t even need to leave the country, maybe China buys silver through JPM and has it stored in a vault they bought from
    JPM. Maybe soon we’ll see silver coins with Chairman Mao’s face on it circulating here in the US of A.

  12. Silver is heading to $140 by end of sept. When oil was $27, I called for $50 in short order and everybody ridiculed me. My call now for $75 oil by end of year. I am sure I will be rediculed again and I will be correct again on both silver and oil.

    Plus i said the market will not crash this year, but it will breakout to new highs this year. As sovereign debt defaults, money will flow to dow Jones and it will run to 30,000 by 2020.

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