Where is the Silver of the World?

With the price of gold hovering around 67 times the price of silver, a logical deduction must be that silver is much more abundant and easier to acquire than silver. On the contrary, the evidence proves the opposite. In fact, there is very little silver anywhere.

Known above ground silver holdings in ounces

Silver ETF SLV 295,313,780

US Eagles minted 240,418,077

COMEX stores 114.102.049

Estimated private bullion (not eagles or maples) 120,000,000

Central Fund of Canada 75,209,103

LBMA Estimated inventory 75,000,000

Canadian maples minted 21,303,000

ZKB Silver ETF – SWITZERLAND 7,397,885

BMG 5,033,609 Bullion Fund

Total 953,777,503

There is almost twice as much gold as silver in the form of investment-grade bars and coins above ground, and that ignores the fact that 52 percent of the world’s gold is held in jewelry. While there are 953 million ounces of silver above ground, there is an estimated 1.803 million ounces of gold above ground in the form of bullion.

It is also important to note some structural differences in gold and silver holdings. Approximately half of the gold bullion on the surface is in the hands of governments. There are no known silver reserves held by governments. While governments have historically sold their gold to finance their budgets and keep the gold price contained, there is no similar entity readily available that can sell silver bullion. Investors in precious metals often hold their precious metals for periods of time measured in years, decades, and lifetimes. Most private investors will not sell their bullion for a 10 percent or possibly even a 100 percent profit. So even if nearly a billion ounces of silver exist, the question remains how much of it is actually for sale at anywhere near today’s price.

The implied dollar value of all silver bullion is small compared to gold or other assets. In fact, measured in dollar value, silver is 1/127 of gold. Many mutual funds hold more than the $16.88 billion silver market, however gold is more readily available to buy in larger dollar amounts. Silver may be one of the most neglected and least loved assets of this century. Perhaps the reason silver is so cheap is ironically because it is too rare for asset managers to invest in. Or is that it?


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