There’s a sleeping tiger in the silver market, and it isn’t the Chinese. While the Chinese continue to acquire a lot of gold, they aren’t that interested in silver However; it’s the Indian investor who is has been the dominant player in the silver market. Why?
According to an article published last year on LiveMint.com, “Silver is so ingrained in Indian tradition that the country’s currency, the rupee, is named after ‘Rup,’ the Sanskrit word for silver.” How interesting. I have been doing research in the silver market for over a decade, and I just found out from this article that India’s currency, the Rupee, is named after silver. It just goes to show, we learn something new every day.
Thus, it makes perfect sense that the Indians are the major player in the silver market as their silver imports have accounted for a significant portion of annual global mine supply. In a recent article by Louis at Smaulgld.com, INDIAN SILVER IMPORTS ON RECORD PACE THROUGH APRIL, he provided the following charts on Indians monthly and annual silver imports:
(Indian Monthly Silver Imports)
(Indian Annual Silver Imports)
As we can see, India imported a record 902 metric tons of silver in April since last year. Furthermore, as Louis states in his article quoted above:
Indian silver imports through April 2018 were 2,889 or an average of 722.5 tons. If this average holds throughout the year, India would import 8,667 tons of silver in 2018.
If India continues to import the same amount of silver as it has over the past four months for the remainder of the year, it will reach nearly 8,700 metric tons (mt) and surpass its previous record set in 2015 at 8,529 mt. Now, if India did import 8,700 mt of silver this year, it would account for 32% of total world mine supply.
If you haven’t read Louis’s work at Smaulgld.com, I highly recommend you check out his articles and website. Also, please consider supporting his work because he is one of the few analysts out there putting out new updated facts and data on the precious metals.
In this next chart, I show annual Indian silver imports as a percentage of global silver mine supply:
Indian silver imports increased significantly from 2013 to 2015 as investors took advantage of lower prices. However, the Indian investor wasn’t as interested in acquiring silver in 2016 as its price surged to $21 versus $14 at the beginning of the year. But, as we can see in 2017, Indian silver imports rose to 20% of global mine supply versus 13% in the prior year. And, if Indian silver demand remains strong throughout the rest of the year, it could surpass 8,700 mt and account for 32% of global silver mine supply.
While it is true that Indian investors acquire silver during falling prices, they also did so in 2011 when the silver price peaked at $49 in May of that year. We can see that as the silver price skyrocketed higher, Indian silver imports nearly doubled to 20% of global silver mine supply compared to 11% in 2010.
Which brings me to subject matter in regards to the title of this article, I believe India is a MAJOR WILD CARD that the market is vastly underestimating. Of course, many silver investors in the west have become quite frustrated with the ongoing weakness in the silver price, but the fact remains, the Global Markets and Financial System are still in serious trouble.
What happens when the global markets finally start their major overdue correction and investors begin to flee stocks and real estate to move into the precious metals to protect wealth? Some analysts suggest that the Bond market isn’t that safe this time around because a lot of individuals are invested in Bond Funds, and not the real Bonds or Treasuries. Bond funds are nothing more than BETS on BETS.
If Indian investors can import nearly a third of global silver mine supply, then what happens when the Global Markets and currencies become under severe pressure? How high could Indian silver imports go??
Thus, India may be the MAJOR WILD CARD going forward in the silver market. Actually, once panic sets into the market, we could see silver buying coming from areas and sectors that haven’t invested in silver before. For example, when the silver price starts to surge higher during the second phase of a market crash, we could see huge demand come from the following:
- Industrial Silver Buyers
- Major Financial Brokers-Institutions
- Pension Funds
- Central Banks
The four categories listed above have not big players in the silver market, but that could change at a drop of the hat as the market realizes, THIS TIME IS INDEED DIFFERENT. Moreover, Central Banks have been net sellers of silver over the past 3-4 decades. Most of the official silver sales from the 1990’s to 2013 have come from China, India, and Russia. But, what happens when Central Banks start to acquire silver??
Of course, this is mere speculation. And, I imagine the frustrated silver investor reading this would believe this is just more hype in a market that seems to be all be DEAD, but that is exactly when we experience a bottom. Furthermore, U.S. silver exports jumped to the U.K. in Apri:
For whatever reason, U.S. silver exports to the London, U.K. jumped to nearly 20 mt in April versus very little activity from Jan-Mar. London is the major player in the silver market, and a large percentage of Indian silver imports come from the United Kingdom. It will be interesting to see how much silver India imports for the remainder of the year.
Regardless, I believe the Indian investor may be the “Major Wild Card” once the markets become chaotic. Indian silver imports could jump to more than 50% of global mine supply during the next market meltdown. However, even if Indian investors demand more silver, it might not be available (only at much higher prices) if Industrial, Institutional or Central Banks start buying as well.
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Do you see this as putting upward pressure on price in the long term even without a systematic collapse? With a developing country and 2 billion people, it would seem the demand for silver at 32% of the market would put significant pressure on the price, but that hasn’t really been seen here in 2018.
This is just fantasy. From no one buying to everybody buying. Won’t happen.
Those who adhere will lose. Those who adapt will suffer.
this was a fun read Steve; I pledge to you that I’ll become a patron when Silver is at $45 an ounce.
For anyone who has a IQ higher than that of a banana they no doubt realise that prices of precious metals are heavily suppressed in highly leveraged fake markets. I understand that 80-85% of global precious metal trading occurs in London and another 10% in the US. These markets are highly leveraged paper frauds with minimal physical delivery. 1.5 million tons of gold were traded in London in 2016 with minimal gold to actually back these trades. The vast majority of gold in London is held in allocated form on behalf of other central banks or backing ETFs with very little unemcumbered gold left to back the mountain of paper trading that goes on there.
These geniuses at the US Treasury/Federal Reserve/BOE have set precious metal prices far too low which will undoubtedly cause a supply crunch in the near future as this leverage has to be unwound as more physical metal leaves London and moves east. There are already supply shortages with palladium as Russia has stopped supplying London. The platinum price is $300 or so below the AISC according to a miming official in South Africa where two thirds of platinum is produced. These mines are pretty much all losing money and the Soth African Government is also making noises about nationalising them.
According to Dave Kranzler both gold and silver are in significant backwardation in London implying physical shortages there.
We also have the emergence of precious metal backed digital currencies which will also place strains on physical precious metal supplies. One very interesting venture is called Kinesis. You really should check it out.
kinesis.money
You’d think the geniuses rigging these precious metal prices would take the opportunity to buy up as much as they could for Europe and the US. Instead we have Sarkozy and Trudeau selling gold reserves.
Something tells me when this is all over the west will have no precious metals, except for what is in the hands of small and medium size investors (and Switzerland) and our governments will steal it all from us.
Agree with you except I think you meant “The vast majority of gold in London is held in UNallocated form”
Look at the silver price right now.
This is 10 years, a full decade, after the financial crisis. With billions of people worldwide having the opportunity to buy silver if they so choose.
Listen…if it didn’t happen by now, if none of this is causing the price to rise…then it never will. Game over, guys. Move on, get a life. Your thesis proved to be false. Admit it. In fact, many of the silver guys disappeared all the way back in 2012. They quietly folded and nobody heard from them again.
Silver is one of the most complete deaths I’ve yet seen in the markets, and I’ve been watching them for awhile. Everything else has held up, you name it, it’s done better than silver. Real estate, most stocks, bonds, bitcoin, collectibles, whatever. Even gold, which as we know is manipulated but they haven’t been able to beat it down like they did with silver. All of them have held up better.
Let me state again: we are much later in the game than you people realize. There is not some magical development that is going to happen in 5, 10, 15 years. Everything that you say is going to occur, has already done so. Everything that you write, has been written a million times. What you see right now, that’s what you get.
I’ll make my prediction now: silver is a dead financial asset. For the rest of our lifetimes.
Dolph silver is both like and unlike any other investment. It can go down, it can go sideways and it can go up.
The longer it goes down and sideways, the more likely it will go up and with a greater return.
Fact:Silver is not going away from an industrial use.
Fact:Silver is finite and production peaked in 2015 more than likely.
Fact:The dollar has 4% purchasing power from its original state.
Fact:Silver maintains a relationship with Gold. If Gold goes up Silver/Platinum will go up more sharply.
Fact:Inflation and cost of production will have their day in court.
By all means by some Amazon stock or imaginary coin and remember us losers on your yacht.
Billy Lone Bear: the median house in 1913 cost 3,000 dollars, today median house is above 350,000. That means that the dollar has less than 1% the purch. power from its original state
When you say something will never happen, specially what has always happended hundreds of times in history never failing: fiat loses all its value, well you prove that your IQ is below room temperature (in celsius)
Indian women were known for stashing cash without their husbands knowledge and got caught just recently having to turn in their hard saved cash because the paper money was demonetized and had to go in the bank. You can bet the Indians won’t let this happen again, they be buying precious metal.
As for silver not taking off in price, if you bought in the 1990’s, silver stayed $4-5 it seemed an eternity. Not until about 2005 was there any signs of life. When the general public starts talking PM and buying, the end is near. Be prepared to sell and profit. The better the coins, the better the premiums, I made up to 500% selling in 2010 and 2011 but it was a Hell of a long wait through the 90’s and early 2000’s.
Silver was $1 dollar for .77 ounces in 1964. Silver is $15.6 per troy ounce today 7/21/2018 which is (15.6)(.77)= $12.01 dollars today for the silver 1964 $1 dollar coin. Obviously the price has increased so the government can not always hold the price of silver and gold. The demand for industrial silver is greater today than the past especially with more solar panels in demand. You can not compare the past gold/silver ratios with today because industrial demand has changed so the same standards do not apply. Industrial demand for silver was 866.5 million troy ounces in 2017 and silver mined in 2017 was 852.1 million troy ounces. Total demand for silver was 1017.6 million troy ounces compared to 991.6 million troy ounces supply in 2017. There is a definite “showdown” in price coming as we can see demand draining supply and depleting unknown surplus. Instead of complaining that the price will not change which is obviously a false hypothesis, just buy and hold and wait. In the meantime you can also play cryptos and stock and any other type of liability gamble for profit. We can see the future price of silver has to increase because supply is not increasing and will obviously be more costly to mine and process for purity. There are those who never see “the forest for the trees” and will always complain but if you understand that these things happen in cycles because the government manipulation is corrupt and not a true fix and can not stop true economics then you are the winner. Creating more debt and printing more fiat currency is always the death of society as costs slowly overtake income. Just ask yourself “If it is not used for money then what is it used for?” then you know what has true intrinsic value.
There’s a lot of languages out there where the word money and silver is the same word
The word Dollar is actually derived from silver
https://en.wikipedia.org/wiki/Dollar
On 15 January 1520, the Czech Kingdom of Bohemia began minting coins from silver mined locally in Joachimsthal (Czech Jáchymov) and marked on reverse with the Czech lion. The coins were called joachimsthaler, which became shortened in common usage to thaler or taler. The German name “Joachimsthal” literally means “Joachim’s valley” or “Joachim’s dale”. This name found its way into other languages: Czech and Slovenian tolar, Hungarian tallér, Danish and Norwegian (rigs) daler, Swedish (riks) daler, Icelandic dalur, Dutch (rijks) daalder or daler, Ethiopian ታላሪ (“talari”), Italian tallero, Greek τάλληρον, τάλιρο, tàlleron, tàliro, Polish talar, Persian dare, as well as – via Dutch – into English as dollar.[1]
A later Dutch coin also depicting a lion was called the leeuwendaler or leeuwendaalder, literally ‘lion daler’. The Dutch Republic produced these coins to accommodate its booming international trade. The leeuwendaler circulated throughout the Middle East and was imitated in several German and Italian cities. This coin was also popular in the Dutch East Indies and in the Dutch New Netherland Colony (New York). It was in circulation throughout the Thirteen Colonies during the 17th and early 18th centuries and was popularly known as “lion (or lyon) dollar”.[2][3] The currencies of Romania and Bulgaria are, to this day, ‘lion’ (leu/leva). The modern American-English pronunciation of dollar is still remarkably close to the 17th century Dutch pronunciation of daler.[4] Some well-worn examples circulating in the Colonies were known as “dog dollars”.[5]
Curious whether plans exist within the Indian government calling for a silver-backed rupee, post-global collapse?
Dolph is right. I have listened to “Silver will go to the moon !” “This year silver will explode like nothing before !” “Silver is an atomic bomb, expect $ 1000 an ounce !” type of tales for a decade. Today it is $ 15 something. It is unbelievable that all the “gurus” who told these tales are still around without exception, doing exactly the same thing as usual. None of them has ever been heard to say: “I am sorry, I apologize, I have been mistaken and I have misled you”. This will never occur.
To me, there seems to be only one way for silver to significantly rise: physical extinction. Which as we have been told is expected to occur around 2028-30.
But: Is there any sound scientific basis for these dates ? Please don’t tell me about that old USGS report. The USGS has revised its predictions several times since then. Now it is not giving a word of extinction.
So, is there anyone who could indicate a reliable source for possible silver extinction ?
Mehmet, look at Table 3 at : https://www.sciencedirect.com/science/article/pii/S0301420716300861
It doesn’t seem to go extinct in our lifetimes which however doesn’t mean it should be ignored as an investment or insurance, or part of a portfolio. I am not expecting many mines reporting 160g of silver per 1 tonne in ore by 2030.
BTC at 8200, no end in sight for the bounce whose lows had been an article here !
Silver still going nowhere in the meantime at best…
“BTC at 8200, no end in sight for the bounce…”
You fantasy BS every time Bitcoin goes up.
The issue is that BTC exploded the resistance and the run up will continue for a while now :
http://www.graceland-updates.com/images/stories/18july/2018july24wow1.png
Maybe, maybe not. Opinion. Speculation.
I like to hedge my bets. I recently picked up 100 ounces of silver and 0.2 BTC for about the same pricing. In 6 months, 1 year, 3 years, 5 years, etc I expect the bitcoin to be worth (in USD values) more in every instance. But in case I’m wrong, I’ll have the silver too. It is nearly at mining costs anyway.
From what BTC has proven so far, is that it’s a Rolls Royce with a VW (bug) engine. Could it be that the ones in charge, the REAL owners are using this price increase as a distraction away from the physical precious metals at such a sensitive time for their dollar? It’s been said that the NSA and other government entities have direct links to BTC. In the form of tracks, so to speak.
“It’s been said that the NSA and other government entities have direct links to BTC.”
Amazes me how naive people are when they think governments & central banks, working together, can’t do anything about a competing currency. Of course some who got it cheap have bought things with it; good for them. But most buyers see is as a [hopeful] investment, not a currency. If it was used by more as a currency it would have been more strongly attacked by TPTB