MUST SEE CHART: Something Quite Interesting Happened In The Silver Market

Something quite interesting took place in the silver market and I believe few investors realize the significance.  After looking over the data, I came across some fascinating evidence that shows just how fearful individuals are about investing in the paper precious metal markets.

While analysts and investors are familiar with the data put out by the Silver Institute and World Silver Surveys, we can see an entirely different picture when we combine the figures in a certain way.  What I am trying to say here is this… by crunching the official data (even though it might be understated or manipulated) we can see very interesting trends that aren’t noticeable when looking at the individual figures.

This is one of the more important analytic tools I like to use at the SRSrocco ReportBy crunching the numbers and looking at figures in a certain way, I can see certain trends that may not be apparent to most investors.

Before we look at the chart that (I believe) proves investors have become increasingly fearful of the paper markets, let’s look at the chart below.  This chart shows the difference between the build of Silver ETF inventories versus Silver Coin and Bar investment demand:

Silver ETF Build vs Coin & Bar Investment

As we can see, Silver ETF inventories and Silver Coin & Bar demand both increased after the collapse of the U.S. Investment Banking System and Housing Market in 2007.  Global Silver ETF’s saw their inventories increase from a build of 54.6 million oz (Moz) in 2007 to 156.9 Moz in 2009.  While physical Silver Bar & Coin demand increased from 51.2 Moz in 2007 to 187.3 Moz in 2008, it fell nearly 100 Moz in 2009 to 87.5 Moz.

For whatever reason, Global Silver ETF inventories increased in 2009, even though the average annual price of silver fell to $14.67 compared to $14.99 in 2008.  When the price of silver jumped to an average of $20.19 in 2010, the build of Global Silver ETF inventories fell to 129.5 Moz (compared to 156.9 Moz in 2009), while demand for Silver Bar & Coin increased to 143.3 Moz.

However, something interesting took place in 2011.  This was the year the price of silver nearly touched $50.  As you can see from the chart, Global Silver ETF inventories actually suffered a net 24 Moz decline in 2011, while Silver Coin & Bar demand skyrocketed to 210.6 Moz.  A significant portion of this physical silver investment was due to a large increase of Indian silver bar demand in 2011.

If we look at the next several bars in the chart (2012-2014) we can see a serious change in the silver market.  Even though there was a 55.1 Moz build in Global Silver ETF inventories in 2012, the next two years saw very little silver enter into this investment market.  There was a paltry increase of Global Silver ETF inventories of 1.6 Moz in 2013 and 1.4 Moz in 2014. 

Now, on the other hand, Silver Bar & Coin demand shot up to a record 243.6 Moz in 2013 and 196 Moz in 2014.  Basically, savvy precious metal investors decided to take advantage of the lower silver price in 2013 and 2014 by stocking up on a great deal of physical silver while Main Stream investors brainwashed by Wall Street, had no motivation to park their money into Silver ETFs.

Of course, some analysts will say the flat Global Silver ETF inventories in 2013 and 2014 were due to a falling price and lack of investment demand.  Well, that might be true for paper or digital silver, but not so for physical silver investment.  Why?  Let’s look at the chart that says it all.

The Silver Chart That Proves Investors Prefer Physical Over Paper

Silver ETF Build vs Coin & Bar (4 yr period)

What a difference in the two four-year periods… aye?  From 2007 to 2010, the build of Global Silver ETF inventories and Coin & Bar demand were pretty even.  As we can see, a total of 442.3 Moz went into the World’s Silver ETFs, while 469.3 Moz was consumed as Silver Bar & Coin investment during this four-year period.

But, something changed significantly in the next four-year period.  From 2011 to 2014, the net increase of Global Silver ETFs was a lousy 34.1 Moz compared to a staggering 788.2 Moz of Silver Bar & Coin demand.  This proves, investors rather purchase physical silver than take their chances playing in the Paper Silver ETF market.

Here is the net change between these two periods:

Global Silver ETFs:  2007-2010 vs 2011-2014 = 92% decline

Silver Bar & Coin:  2007-2010 vs 2011-2014 = 70% increase

Again, I realize analysts will say the relatively flat inventory levels of Global Silver ETFs over the past couple of years were due to falling silver prices in 2013 and 2014.  Yeah, I get that.  However, that still doesn’t change the fact that a certain segment of the investment public purchased record amounts of Silver Bar & Coin even though prices declined significantly in 2013 and 2014.

The chart above proves that investors rather stockpile physical silver than gamble it in the paper silver market.  Now, I realize there has been speculation put forth by the precious metal community that all the silver supposedly stored by custodians of the Silver ETFs might not be there.  Unfortunately, there is no way of knowing. 

That being said, most precious metal investors rather have guaranteed silver in their sweaty palms than a paper (or digital) promise in the future.  I totally agree.

The world’s stock markets are currently experiencing some of the most worst volatility in years.  One day the Chinese Hang Seng Index was down 1,000 points, then another day, it was up 600.  The Dow Jones lost 1,800 points over a four-day period, then came back nearly 1,000 points over the past two days.

The markets are totally broken.  I believe a small percentage of investors realize this as they purchased 23 oz of Silver Bar & Coin for each 1 oz build in paper Global Silver ETFs during 2011-2014.  I think physical silver investment demand will only get stronger over the next several years as the broader stock and bond markets continue to disintegrate under massive leverage and debt.

If you haven’t checked out THE SILVER CHART REPORT, there’s a great deal of information on the Silver Industry & Market not found in any single publication on the internet.  There is one chart in this report (Chart #19) that I can guarantee that 99.9% of precious metal investors haven’t seen before.  

 CLICK HERE:   For The Silver Chart Report

I use this bird’s-eye approach when I create my easy to understand charts.  The Silver Chart Report is a collection of my top silver charts from articles published over the past six years, and includes in-depth, never-before-seen charts and content that indicate that silver is on the rise. There are 48 charts in the report, broken down in five sections.

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30 Comments on "MUST SEE CHART: Something Quite Interesting Happened In The Silver Market"

  1. silverfreaky | August 28, 2015 at 4:35 am |

    Miner again down.Looks really awful.

    • I’ve some antique stock certificates bought by my grandfather in 1921. His investment was $600 total (hefty sum at the time), for shares in Cascade Gold and Shamrock Silver. They’re really cool looking!

    • As soon as the iou spectrum causes real headaches, and paper promises will shake hands and go down all together, mines will be nationalized. The value of mining stocks remains as a digital number on your Commodore64, you won’t be able to sell.

      I suggest you take a print screen for your grandchildren.

      • Silverbull145 | August 29, 2015 at 9:27 pm |

        I have to disagree with the notion that the markets will just dissipate into nothing. We’ve had a New York stock exchange since 1792 and we’ve also had currency upheavals since then. I couldn’t agree more that the dollar is going down and silver is the best hedge against it, however, silver and gold mining certificates will outperform the metal as its more leverage. The stock market will still be around when silver breaks the triple digit mark it will just be significantly cheaper.

  2. That was an extremely insightful clue. Could help explain why paper prices for silver are declining. There just isn’t a lot of demand for paper silver, which sets the market price. As long as we have paper silver representing physical and as long as the miners are willing to meet physical demand, then this charade can continue. This is the best market ever. We get the most valuable metal on the face of the Earth by trading in fiat that has no intrinsic value, nor does it hold purchasing power over the mid to long-term. When reality eventually hits the silver price, my stacking days will probably be about over. Let the games continue…please.

  3. The silver bears, taking a cue from the bankster controlled Silver Institute, maintain that there will never be a shortage as they claim that all bars, bullion and coin in private hands is “available supply”. Well, duh, yes it is; BUT AT WHAT PRICE? Stackers are not traders; they are investors. Knowing full well that the entire planet is running out of cheaply mined silver, no stacker is going to sell at $30, $50, 0r even $100 per ounce. Within a decade, there is a strong probability that the GSR will be below 10 and that the current price of gold will be many multiples higher. I can wait; my children can wait and my grandchildren can wait (as a big middle finger to the banksters).

    • Yeah the people clued up enough to buy are clued up enough not to treat it as an “investment” class item, they understand it as an insurance policy

      Only time you “sell” is when the carnage has run its course and purchasing power has been entrenched by a new Gold/Silver backed currency/monetary system. Even then one would only drip feed it back which is why I mix my denominations up, even to the point of buying 1/10 ounce coins

      Even then the powers that be would want to maintain some money printing control so I’d expect a Gold Exchange standard based on multiple reserve currencies like the inter-war period before we saw a proper Classical Exchange Standard, so you would want to keep some aside for a long long time

      I only have a relatively small hoard but it will be a long time before that is back on the market

  4. From my perspective there is a very simple answer.

    The paper price of silver has just kept on falling in that time and keeps on falling till now. Many of us have probably lost money betting on a higher price, only for it to keep falling. Therefore despite us being persuaded by the fundamentals, low cost, manipulation, many uses, poor mans gold, fiat currency is doomed, Agq is set to rocket, reports on silver. Have lost our shirt. So we’ve been buying the real thing waiting for the day of reckoning to come without the un-nerving roller-coaster of the paper market.

    I know I sleep better knowing I own something tangible rather than a bet that seems to go down on whim. Or maybe it’s just me that’s blown a few quid, numerous hours staring at a screen p!ssed off

    • Maybe this helped wake people up – because many of these fleeced accounts were gold and silver traders…

      On October 31, 2011, MF Global executives admitted that transfer of $700 million from customer accounts to the broker-dealer and a loan of $175 million in customer funds to MF Global’s U.K. subsidiary to cover (or mask) liquidity shortfalls at the company occurred on October 28, 2011. MF could not repay these monies with its own funds. Improper co-mingling, or mixing, of company and client funds took place for days before the illicit transfer and loans – and perhaps many other days earlier in the year. According the New York Times, “MF Global dipped again and again into customer funds to meet the demands”, perhaps beginning as early as August 2011.[4]

      MF Global declared bankruptcy on October 31, 2011, and faced liquidation beginning in November 2011.

    • Silvrwillwin | August 29, 2015 at 5:47 am |

      You don’t lose until you sell it. The one thing that the devious bankers cannot take control of is the clock and calendar. Holders of the physical have time on their side as it slowly but surely reveals the truth . The world wide web has also been a great contributor towards helping to educate and enlighten many with the tricks that these crafty bankers enact through their devious ways.

      • “The world wide web has also been a great contributor towards helping to educate and enlighten many with the tricks that these crafty bankers enact through their devious ways.”

        Agreed but since that education phenomena started, many have died and many have been born, and I’m not sure the % of “enlightened” has really gone up. I’m around a lot of people in their 20’s and 30’s.Few are concerned or aware of what is going on in the economy [other than they are broke or can’t find a job, or if they do have $ how to spend it], what gold or silver were or are, that bankers control politicians, etc.

        • OutLookingIn | August 29, 2015 at 8:44 am |

          David, agree. ” [other than they are broke or can’t find a job”.

          The young people that I have contact with think the economy is their bank, what their interest rate is and the prices at the grocery store. That’s it!

          It really is tragically funny when talking to them. eg: One said ‘times are slow because you older folks are sitting on all the money and won’t spend it’! Another said, ‘the old fart’s won’t retire and give their jobs to the younger generation’.

          Most young people seem not to have the ability, to look at the macro-economic picture, define parameters and connect the dots. Although with a few, it’s starting to sink in. The “awakening” is beginning, but I’m afraid a little too late.

          • Silvrwillwin | August 29, 2015 at 9:15 am |

            I am also 60 and have a son (22) and a daughter (24) . Both have heard my definition on the need for the PM’s . They are alert to know how to respond responsibly with the handling of silver in particular . It’s been a teaching process with little pressure that seemed to have worked.
            I have also observed the 20 y.o.’s from time to time at the LCS placing down the currency for a couple of ounces. It’s encouraging to see.

  5. Investing in long only silver ETF (even if they are fake) as not a paper gamble. These investors believe that puting cash into silver ETF is like physical silver.

    Very different from comex silver futures with leverage.

    • Except if the silver in the EFT is lent out, it expands the artificial supply available to the banksters to screw for fun and profits – right up until they are forced to cash settle.

      IF the EFT’s are lending out their silver to these conmen – what happens when the music stops and the EFT gets cash – just a the price explodes?

      We could see a mad dash for phyzz as the EFT’s scramble to buy back in or they shutter with a cash-out to investors.

      Plausible if these EFTs are lending – given the money involved, it makes it very likely that they are lending – after all, many of these EFT’s have banksters as fiduciaries. (And if that gives you the warm and fuzzies, I have a bridge to sell you. 🙂

  6. I’m starting to lose my patients with the silver market. I’m holding on but I am to damn old to wait much longer (78). I would hate to croak before it goes up and I know it will go up big time when it happens. I am just going to refuse to die lol.
    Well, here’s my take on things. I don’t think it will be to long before silver does it’s thing.
    I think Hillary will have to drop out of the race for president due to the email scandals and will wind up receiving probation for her actions.
    I think the public will tire of Trump and start looking at someone else and I hope it is Ben Carson or Carly Fararina ( hope I spelled her name right ) I won’t vote if Bush is nominated.
    Whom ever gets in I hope they get along with Russia and China better then Obama. We want friends not enemies.
    OK that’s my take and one more time. SILVER is gonna go up so high we all are gonna be so happy.
    God Bless you all.

    • to Ray and to those of us who remain independent in thought and in action….”Live long and prosper”…

    • You WILL make it BIG time Ray…When ALL the TRUTH is revealed to mankind, and New technologies formally “Hidden” from us are presented…You will be VERY pleasantly surprise at what will happen to your “Health and Age”…I’m somewhat old myself (69) and I already use some of this knowledge to preserve my youth and appearance!
      ALL of this will transpire BEFORE this year ends!…GET READY TO CELEBRATE EVERYONE!!!
      PS: Meanwhile KEEP STACKING!!!

    • Ray
      Don’t forget you still need silver for vampires and werewolves. But then again, EBT zombies will be looking for silver…when their EBT’s run dry.

      You have to hang on for what follows. (Don’t forget popcorn on your prepper list! along with the four precious metals – Lead, Blued steel, gold and silver…)

      Speaking of prepper lists – check this out from a former advisor Gordon Brown:

      http://www.zerohedge.com/news/2015-08-28/we-are-all-preppers-now

    • Hey Ray,

      Thanks for your comments. I’m a youngster at 60.

      Stick around my friend. At least this is another thing to give you a sense of purpose. My father ran out of purpose at 72 and died at 75. My mother’s second husband died and she found new reasons to go on. She is 87 and completely functional & not on meds.She tells me she experiences joy and is still doing things for other people.

  7. silverfreaky | August 28, 2015 at 3:07 pm |

    Hello Ray,

    I hope for you that you soon make a good profit.

    I wish you a good health and a long life.

  8. Silvrwillwin | August 28, 2015 at 5:18 pm |

    Thanks Ray for a ray of hope ! You are a help in showing stick-to-it-of-ness strengths. Something that we all need from time to time.I believe that there is enough writing on the wall , so to speak , which indicates that the tiny world of physical silver prices can’t keep on being held hostage as they have been for the last 40 years , much longer ! It is my belief that somewhere somehow a group of holders might just start to tease the current day erroneous paper prices by collectively expecting a higher margin $$ figure , better then Ebay’s .

  9. What do we actually see? Lets ask a question. Who trusts the government that has hijacked the country and sold us to the banking cabal and corporate monkey’s? The kind thing to say is they turned us into whores, the less kind,…slaves. Now beyond that,…what we actually see is the lack of confidence. See,.. the fiat system worked fine until enough hard working people thinking they had done everything right went BANKRUPT!

    What happens then,.. well,… when it’s smart business people going belly up initially the blame is within. Then there is analysis as the dust settles. Then there is discovery. Now the illusion is not only destroyed but venomous hatred sets in. Now the veil is lifted. The idiot’s on TV spouting the so called news become bobble heads attempting to sound intelligent and in the know,..acting out a scripted play.

    The world changes. The stock market becomes a casino and you understand you are being fleeced.
    The government becomes the banksters mutt bitch growling at those unwilling to play the game. The wars become understandable. Suddenly it’s more about you losing your own rights and wealth. Not terrorism but CONTROL. Then there is the constant war on the second amendment,..let’s face it,…if you looted, pillaged and burned a society intentionally would you want them armed???

    If you are a no good criminal scum bag wouldn’t you take control so as not to face prosecution or worse??? Bottom line is the paper ass wipe has run a ground and is burning. The criminal empire is doing it’s best to have things be business as usual. Problem is “We the people are a pissed off”.

  10. So, Steve, are you implying this may be a good time to sell this ‘barbaric relic’ of a pseudo monetary substitute? No reply necessary from any neo-natal minds that fail to grasp the paradox.

  11. Hey everybody!

    Are we talking about the wrong WAR? Is it PM’s vs. fiat currency, or is it (PM’s & fiat currency) vs.

    DIGITAL money? I believe it is the latter. The last I’ve read cash transactions are around 3% of all

    transactions & falling. Guess we know where that’s headed. Point is, if digital nears or reaches 100%,

    will ether of them matter? Digitization is gaining control over more and more. High speed trading,

    digital Fed money for Wall St., credit cards, electronic tax filling, and much more. The computer

    technocrats are gaining control of most things, our economy included. That may well include pricing.

    We should hope that the rich & powerful are invested in PM’s. If so the technos will let them run up in

    value. If not, only a total collapse of the economy will.

  12. silverfreaky | August 29, 2015 at 12:48 pm |

    In the old western movies the stealing of a horse was punished with hanging up.
    For the betraying of the whole world this banksters get a lot of money.

    I think we should introduce the old middle age punishment from europe for this banksters.

    Teeren–>tar
    Federn–>feader
    Vierteilen–>to devide in 4 pieces

    The sequence must strictly be kept.

  13. Good article, very good! Seems like people are getting out of paper promises…

    Another point, dear readers of SRS; make payments in cash where possible, and spread the word.

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