Remember back to college economics? Good old supply and demand? Well, the numbers are tilting favorably for silver. Simply put – the silver equation shows more demand than supply and that is bullish for prices ahead.
Global silver mine production fell in 2016, for the first time since 2002, according to the newly released World Silver Survey 2017 (Silver Institute and GFMS Team at Thomson Reuters.).
Here’s the numbers:
2016 Supply 1007.1 million ounces
2016 Demand 1027.8 million ounces
Doing the math, that leaves a silver deficit of -20.7 million ounces and ultimately puts upward pressure on prices.
Where Does The World’s Silver Come From?
On the supply side, Mexico was the largest silver producer in 2016, followed by Peru, China, Chile and Russia, the report said.
Who Uses Silver?
Silver is both an industrial and precious metal. Investors who purchase silver see a dual demand base for this commodity currency.
On the demand side, industrial fabrication made up the largest component in 2016 totaling 561.9 million ounces. Jewelry stands in second place at 207 million ounces and coins and bars are in a close third at 206.8. Silverware comprised 52.1 million ounces of total demand in 2016.
It is well known that physical ownership of silver offers investors many of the same diversification properties as gold, but at a much lower entry cost. Gold trades at about $1,257.00 an ounce right now, while you could purchase an ounce of silver for about $17.00 an ounce.
New applications for silver are exploding in industry and manufacturing, which will keep upward pressure on prices. Demand is growing, while supply is shrinking due to reduced mining.
Here’s one example: in 2016, silver demand for photovoltaic applications skyrocketed by 34 percent rise to reach 76.6 million ounces. This growth was the strongest since 2010 and driven by a 49 percent increase in global solar panel installations, the Silver Institute said.
Read about fascinating new applications for silver in this LinkedIn article authored by Blanchard CEO & President David Beahm.
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Investors turn to physical precious metals as an important component of portfolio diversification. Many studies have shown that when stock prices go down, gold and silver prices tend to rise – often significantly. Owning physical gold and silver is appropriate for all investors and can improve your long-term investment prospects. The latest supply/demand figures for silver only underscore the positive long-term price outlook for silver.
Silver prices have already been climbing in 2017. Now is a good time to add physical silver exposure to your portfolio before prices climb even more.
A great option to add to your portfolio are silver bullion coins. The 2017 1 ounce American Silver Eagle can be purchased right now for around $19.37. Market prices change daily, call Blanchard for today’s price at 1-800-880-4653.