What is Going on With Silver Inventories? Is there a Shortage?

Published November 11, 2013 | By glen

Invest in Silver Granules It’s pretty simple when you think about it; supply and demand. The world’s silver supply is woefully unable to keep up with demand and this lack of production is driving us into a shortage. This means good news for investors but it has unforeseen impacts as well. As news of the shortage begins to leak, the demand for investments is going to go higher as well. The general public remains largely unaware of the fact that paper silver outnumbers real silver by a large margin. As the news gets out the average consumer is going to start opting to invest in silver. Once again this is good news for early adopters.

So What’s Going On?

The market itself has suffered a loss of physical silver due to a suspected and largely illegal manipulation of silver futures by certain representatives. Huge gains were available to those in the know as public awareness remained minimal and therefore prices remained low. That may soon change however. The world community is getting nervous. The US doesn’t have enough silver to mint its own coins and even the pope is keeping his precious metals in a Swiss vault. It would appear there is definitely a shortage. This could mean a great deal to potential for those who want to invest in silver.

Why Silver?

Silver is a valuable commodity in the world today. Not just for the Mint who has interrupted production in light of depleted reserves but for industrial purposes. Countries in developing nations rely heavily on silver especially for technical needs. As supplies dwindled, the existing reserves played stopgap to keep up with demand. But production from mining has been unable to replenish those reserves, hence - a shortage. In short:

Increased dependence on a finite resource
Steadily depleted resources force outsourcing from other countries
Lack of production creates inability to replenish reserves and a spike in demand
Countries around the world scramble to find new resources while protecting their own interests.

There are those that claim there is in fact no shortage at all. While there may or may not be a basis for this the facts remain clear. If the inventory is available, the holder of that inventory is not selling. The holdout is driving the price of silver up until a catalyst forces the sale. Supply and demand can be viewed differently depending on where in the system you sit. For the suppliers while mined and processed product may exist above ground waiting to purposed, without acquisition by the corporations that use that product to sustain current demands the situation is essentially the same. The cause remains however, murky.

As the situation continues it does not look to be improving any time soon. With more awareness of the impending crisis collectors and investors are hoarding their assets. It remains to be seen how it will all pan out but one thing seems certain, silver prices while still below their all time high do not look to be going down anytime soon. For spectators looking to invest in silver it remains obvious the lowest buying price for silver commodities is probably right now.