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This blog discusses The Perth Mint's bullion coins and bars, providing information about our latest designs, mintages, sales volumes and sell outs. On a broader front, we share relevant research and opinions for anyone interested in gold and silver bullion investing.

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World Silver Survey 2017

Topics [ Silver Price silver market ]

The Silver Institute, an international association drawing its membership from organisations in the silver industry, has released its 27th annual World Silver Survey. Produced by the GFMS Team at Thomson Reuters, the latest survey offers global supply and demand statistics for 2016.

Some key findings of the latest World Silver Survey:

 • The annual average silver price rose 9.3% in 2016 to USD 17.14 per oz, its first rise since 2011.

 • On the supply side, total supplies fell 32.6 million ounces (Moz) to 1,007.1 Moz.

 • Global mine production recorded its first decline since 2002, down 5 Moz to 885.8 Moz.

 • Others key supply factors included less silver scrap, and a contraction in producer hedging.

 • Total physical demand fell by 11 percent in 2016 to 1,027.8 Moz, pulled lower by weaker offtake for jewellery, silverware and retail investment.

 • Physical and exchange-traded product investments fell to 253.8 Moz in 2016, down 7 percent from 2015. Demand for coins and bars declined 83.9 Moz to 206.8 Moz compared to 2015.

 • Industrial applications, the largest component of physical silver demand, were lower by just 1 percent, reaching 561.9 Moz.

 • Demand from the photovoltaic industry jumped 34% in 2016 to a record high of 76.6 Moz, largely on increased requirements for solar panels in China and the United States.




Click here to read the full World Silver Survey 2017 9 (12.57 MB pdf)

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China To Support Silver Market In 2015

Topics [ silver investing silver prices silver market ]

RESEARCH AND ANALYSIS

If you mention China, most people think of gold. However, China is also a big consumer of silver, net importing between 5% to 10% of global annual supply of 30,000 tonnes. A recent note by David Jollie of Mitsui Global Precious Metals focusing on the Chinese silver market concludes that it will provide support to the silver price in the short to medium term.

While net imports of refined silver into China peaked in 2010 at 3,475 tonnes, David’s analysis of other public and in-house data shows that China’s total silver demand actually peaked at 6,270 tonnes in 2013, with 2014’s figures only declining by 1.9%. For 2015, he expects imports of silver to rise sharply on the back of stable local mine production, low exchange stocks and 7% GDP growth driving positive growth in the solar, automotive and electronics sectors.

In addition, David believes that investor interest in silver that drove the price to its highs in 2011 has mostly been eliminated, based on an intriguing comparative analysis of silver and indium (which share similar mining and end-use market structures).

This means “that there is scope for silver to regain some of its [investor] premium. If gold rallies further, international investors can be expected to send silver higher”. Furthermore, David thinks that commodity financing deals using silver will return, resulting in further demand for silver out of China.



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Infographic: Supply And Demand For Silver

Topics [ silver investing Silver Price silver market ]

RESEARCH & ANALYSIS

Visual Capitalist has published Part 2 from its Silver Series of infographics. (Click here for Part 1). The latest instalment examines supply and demand, suggesting that even though there are more than 10,000 modern industrial uses for the metal, investment represents one of the fastest growing segments of silver demand.

Take a look:




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Then, As Now, Silver's Course Dangerous To Predict

Topics [ silver investing silver prices silver market ]

ALL ABOUT SILVER

Looking for something different to read during my midday break today, I visited The Perth Mint’s library and came across “Messrs. Mocatta and Goldsmid’s Circular on the Movements of Gold and Silver during 1913”, an Appendix to the British Royal Mint’s 1913 Annual Report.

Silver investors will find this circular of 100 years ago of interest as Messrs. Mocatta and Goldsmid spend three of their four page report on the silver market.

January saw the highest silver price for the year of 29 & 3/8 pennies. From that point the price fell to 26 & 1/16 on 25 March on account of “the market becoming very despondent with regard to the China loan negotiations” as well as “the Balkan war and other causes were keeping money very dear and helping to deter buyers” but the market recovered in April when the Chinese loan was signed. A century later it is the Chinese with excess foreign reserves to lend.

May was steady, “but the heavy stock of silver in London, which then amounted to nearly 4,000,000l., was discouraging to buyers” (Note, l. means pounds). Then, as now, India and a promising monsoon were important drivers of the market. However, while “the prospects of bumper crops were most favourable, the Indian Government seemed very reluctant to commence purchasing”.

One thing that has not changed in 100 years is stealthy central bank transactions, with Messrs. Mocatta and Goldsmid noting that India’s purchases were “unsuspected by the market for some time and it was not till the huge stock of 4,200,000l. which had been accumulated in London was reduced by three shipments of 1,000,000l. each in three consecutive weeks that it was realised to what extent the Government had bought.”

In November “rumours of financial trouble in Bombay and many failures in the Mill Share market, caused great uneasiness as to the financial standing of the Bull speculators, who had for so long been operating in silver on such an enormous scale.” The price recovered on the formation of a syndicate to “take over all the ready silver and the contracts for forward delivery” which “caused the Bears, whose commitments for December and January were exceptionally large, to partially cover”.

I’m sure today’s silver investors would love to have enormous “Bull speculators” and “syndicates” panicking “the Bears” into covering, with the circular noting that "... huge bull account, which has been such a menace to the market for many years, has now passed into very strong hands..."

Messrs. Mocatta and Goldsmid continue on to report on production problems in Mexico and the appearance of backwardation in silver in September.

They conclude their silver market summary with some sage and timeless advice from 100 years ago: “It is always difficult, if not dangerous, to express any opinion as to the probable course of silver, and owing to the recent startling developments it is particularly difficult to do so for the coming year…”

Little did they know that less than seven months later, on 28 July 1914, the world would be at war and financial markets truly would be “startled”.

Download the full Messrs. Mocatta and Goldsmid’s Circular here (pdf 310kb).



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Factors Aligned Against Gold

Topics [ gold market gold prices silver prices silver market ]

WHAT OTHERS ARE THINKING

The European Central Bank disappointed investors Thursday after president Mario Draghi said it was ready to take action on the debt crisis but failed to offer any immediate action. Stock markets and precious metal prices all dropped on the news.

Summing up the negative factors ranged against precious metals, Kitco analyst John Nadler cited the Fed and ECB announcements in combination with the imminent summer holiday season in the Northern Hemisphere.

Peter Schiiff, CEO of Euro Pacific Capital wrote “many investors believe the yellow metal has topped out and are selling into every rally.” Faced with market pessimism and “tides of propaganda saying that gold has no value or is the refuge of doomsayers”, the renowned gold bull is stocking to his guns: “At the end of the day the gold price is not a mystery – it's a proxy for dollar weakness.”

Full story: Resource Investor

Elliott Wave market analyst Avi Gilburt admitted he’s surprised that precious metals failed to rally as predicted some months ago. Sentiment regarding silver is beyond bearish, he wrote. “These levels have not been seen in decades, and it tells us that silver is ripe for a reversal, but still may need one more washout drop to trigger the reversal.”

Full story: The Street



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Silver Seasonality

Topics [ sell silver silver investing silver market buy silver ]

REASEARCH AND ANALYSIS

Is there a good month of the year to sell silver and an equally favourable month in which to buyback? In this paper I investigate the seasonality of silver and deliver a warning to those tempted to rely on the next seasonal chart they come across.


Download The Perth Mint Treasury paper Silver Seasonality (pdf 348kb)



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