2016 silver demand exceeds supply again

2016 silver demand exceeds supply again


Welcome to illuminati silver we tell you the
truth about silver. Today is Friday 18th November 2016 and we
are briefly covering the issue that silver demand in 2016 is likely to exceed supply.
Two days ago, Thomson Reuters GFMS published its Interim Silver Market Review for the Silver
Institute. In summary it concludes:
• The silver market is expected to be in an annual physical deficit of 52.2 Moz in
2016, marking the fourth consecutive year in which the market has realized an annual
physical shortfall. • Silver prices this year through 11th November
averaged $17.23/oz, which was 9.9% higher than in the same period in 2015 and forecasts
silver prices are likely to average $17.15/oz for the full calendar year, a 9.4% increase
over the 2015 average. This means they expect silver prices to fall a little further between
now and the end of the year. • Total silver supply is forecast to fall
3% to 1,012.4 Moz in 2016. The decline is expected to be driven by a 1% drop in mine
production, a 0.3% fall in scrap supply and net de-hedging of 20.0 Moz. Mine production
is forecast to reach 887.4 Moz this year, which is almost 6 Moz lower than 2015 but
is still the second highest year of production on record.
• Silver bullion coin and bar sales are expected to contract 24% to 222.0 Moz this
year, its lowest level since 2012. Bullion silver coins are forecast to reach 122.7 Moz,
which is 7.9% below last year’s record of 133.2 Moz
• Physical bar demand is expected to contract by 38% this year to 99.3 Moz. driven by a
lacklustre Chinese economy and weak consumer sentiment in North America. Demand in Europe,
on the other hand, should improve by 14% reaching 14.5 Moz this year on the back of Brexit fears
and a rising silver price. • Physical bar and coin demand should account
for 21% of physical demand in 2016, down from 25% in 2015
• Total industrial demand for silver is forecast to decline by 1% to 585.1 Moz, accounting
for 55% of physical demand. • Jewellery fabrication is forecast to drop
8% to 208.5 Moz. A decline in discretionary spending, thrifting, lower economic growth
and a higher silver price have all contributed to the overall decline.
Senior GFMS analyst Johann Wiebe, presenting the new report at Wednesday night’s Silver
Institute dinner in New York. He said: “While such deficits do not necessarily influence
prices in the near term…. multiple years of annual deficits can begin to apply upward
pressure to prices in subsequent periods.” We tend to agree. Even though the gold and
silver pumpers would have you believe there is no silver left, above ground stocks, including
ETP’s and exchange inventories, are estimated to reach 2,640.1 Moz in 2016; a 15% increase
from the previous year – more than enough to make up any shortfall. Having said that
of course a continuation in deficits will erode this buffer and can only truly be offset
by additional mine supply enabled via higher prices.
What this report reveals to us, quite frankly is that despite there being an overall physical
supply/demand deficit of some 52 million oz, actual physical demand fell in 2016 unless
something dramatic happens within the next 7 weeks. So when you hear the pumpers shout
silver coins and bars are in record demand – well not according to these figures. When
they say the supply deficit will cause silver prices to rise to the moon – well not with
a deficit of just 52 million oz it won’t. In fairness though there is an expected 71.4
Moz net inflow into ETP holdings (which are securities, which trade on stock exchanges
and are backed by physical metal, making it easier to invest with confidence.) and a 61.9
Moz derivatives exchange inventory build which together have increased the impact of the
physical deficit, bringing the net balance to -185.5 Moz, equivalent to approximately
nine weeks of global demand. Whilst these figures suggest to us that the
silver market over the long term of some 10 – 30 years is likely to produce significant
gains for those who are clever or wise enough to save and store it away now, it will take
either; a black swan event or paper investor speculation or a currency crash to occur in
order to provide those fantastic gains the pumpers dream of before that long term haven
is reached. In other words, if you buy silver do so for
the long term in mind or to act as a currency or portfolio hedge, do not do so in the belief
that you are going to become rich over night; and should such an event occur in the interim
we simply quote that well renown 1970’s TV series starring the Fonz – Happy Days.
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worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of
its owners.

41 Comments

  1. I ordered my King Tut coin today. Can't wait to see it. If I like this coin, I'll order a few more and if the spot price drops. It seems like it is still going down. Hopefully, the economy will be okay. I wouldn't want to sell my collection.

  2. "Silver Demand exceeds supply"(hardly), on the other hand, Gold supply is almost infinite.
    ETP's are Exchange Traded Products", which have been stated to make up for shortages; Those which are assumed to have such physical quantities on hand, not necessarily from leased products. I'm sorry but that situation does not exist. Fiat (paper) Silver is abundant but unfortunately, neither accountable nor available to the markets as available physical to make up for a "shortfall". Keep in mind that ETF's do not assure physical silver, only fiat equivalent. Face it, the world Banks along with the Commodity Futures Trading Association make up an absolute fraudulent entity when considering actual futures market valuation. IMHO
    The fantastic gains will occur when the markets are honest and unencumbered. As the Energy returned on Investment (EROI) degrades, so does the precious metals production decrease caused by fraudulent valuations.
    Silver has no reserves, only mine production. Gold has gazillions of reserves. Which do you prefer as an investment? In the end (the true valuation), Silver is more valuable then Gold.
    While quoting the 1970's irrelevant character, consider a popular book which was published in the same time frame. "The Market for Liberty". It reads as if it was written tomorrow. (the Fonz is a caricature)

  3. If I may, to me the price of silver is irrelevant. Should I leave paper in the bank and loose value to inflation and a possible bank in, or do I just buy silver as a consumer and have something to show for my purchase at the end of the week? When I go shopping and have nothing to show for it at the end of the month besides some, how would one say, junk I really did not need, I prefer to spend it on something that has value down the road.
    It actually has made me a greedy PM Consumer. If I save currency I spend it, If I save precious metals I want to purchase more. Now about that awesome bottle of wine. LOL.

    Example, I buy a vehicle for 60,000 Dollars and in 5 years I have 0 value.
    I buy the same vehicle years later for 1500 dollars and buy 58,500 dollars worth of silver.
    Sir, I rest my case. πŸ™‚

  4. What do you see for a bottom if I may ask, Just asking for your opinion if I may. There is no right or wrong answer and not asking for advice. Thanks
    12.86 is my low

  5. like a compressed spring, the manipulation has stored great forces. the upside down world of supply and demand verses the puppet masters control will eventually brake. Silvers unique and true value (in just solar panels alone) will have its day in the sun.
    I sold last time at 30$. I got lucky. right now 50. $ looks good. 1%if people are stackers. imagine 2 or 10%.

  6. perhaps one should look at where the next investment in the metals may come from…..the bond market collapse perhaps?, rising inflation?, rising interest rates and overseas debt market defaults?…etc etc

  7. In term of Silver & Gold ratio for long term investment, do you suggest me hold more silver in my profile as it's price may go up easier for 10-30% up when gold only up 10%?

  8. I have been wondering about the pumpers lately.Many of whom are bullion dealers,who continually touting a PM "shortage"It just goes to show that when they say buy now or lose out,we need to keep our heads and buy on the dips…and there will be dips after the run ups.Thx for the posting.

  9. Don't buy silver. Plenty of terrific IPO's are coming to the stock market. Even if their was a crisis it wouldn't take more than a few weeks to get things going again. We are not living in a world where coordination wouldn't be maintained in a crisis situation.

    I conclude that the gold and silver investment is basically a has been sector that will die out and eventually see many reverse splits and bankruptcies along with the usual economic gymnastics in dying companies.

    Copper and other synthetics are becoming the norm now.

  10. Very informative as always. I am a silver stacker in it for the long term but decided to expand more in to gold in the beginning of this year while buying some older coins like Victoria crowns florins, morgan dollars etc. to diversify my collection not looking at just silver weight though I have still been buying some modern bullion. With the older I didn't go for crazy high prices, just coins of an ok but worn grade. I have seen a big uptake in these older coins this year and makes me wonder just how many more are looking at this also in the home stacker community and could explain the dip in sales of fresh silver seeing the potential value of older coins as collectors knowing silver bullion is a long term thing.
    Gold has been in the press alot this year with new entry stackers looking at this maybe more also.

  11. Does demand exceed supply because investors are scooping up coins and bars OR because of demand of solar panels, usage in computers, etc? What do you think? Maybe both?

  12. I agree you, need a black swam event in order to silver react if no such event occurs neither gold or silver stand a chance.

  13. Hello IS, Thank you for the interesting video, and thread from your subscribers. I see some debate in collectables over generic silver. My personal situation dictates quantity over quality, but I do have some coins that I like very much, gotten from the secondary market on the cheap, and they give me much pleasure, so I do understand the personal value of them.
    In this profile picture is a piece I found, while employed as a refuse collector. It's a 25 year service medallion from the head of the state of Maryland Free Masons from around the year 1900, James Sherock, if memory serves me. I found it before I was stacking, and my research found that it was the only one in silver, his personal award. Anyway, I contacted the main lodge in Maryland, that is named after him, and they were very happy to get it for $75 and frame it in a showcase. I can only imagine the offers I might have gotten at an auction of some sort, knowing what I know now. They were not aware it existed, as the memorabilia only come in bronze. I wrote it off as a good deed.

  14. There is more than enough Gold and silver to re-peg a currency to it, all this "shortage" nonsense is just that…..nonsense. All that's needed is a proper price discovery and an unmanipulated market.

  15. Great report and unbiased commentary! The numbers that stand out to me is that silver coin and var demand equates to a million silver stackers buying a mere 20 ounces a month each… Such a small market

  16. I buy physical silver because it is money that maintains my purchasing power. Why would anyone buy fiat paper that loses purchasing power over time? I've been buying monthly since 1982.

  17. bs. us mint lies and breaks federal law stopping production. if supply were short price would not be falling and barings galore this black friday. our govt lies

  18. The demand might be exceeding the supply but that sure ain`t reflected in the price! As long as the criminal banking cartels continue to control the price it`s going to STAY low.

  19. Don't forget gold and silver is OK. but some Vegetable seeds would be a good idea, you can grow your own food. kids could help one day they will appreciate what you taught them

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