Are We Running Out of Silver?

Tue, Apr 5, 2011
By Damon van der Linde – Exclusive to Silver Investing News


Analysts say that silver will continue to attract investor attention away from gold, with the gold-to-silver ratio dropping to levels that have not been seen since 1983. But as investors continue to put funds into the precious metal, concerns are surfacing that there may not be enough of physical silver to go around.
Eric Sprott, the CEO of Sprott Asset Management is one of the most vocal advocates of this theory. He has appeared at numerous natural resource investing conferences and media outlets including CNBC and BNN, saying that there is a looming silver shortage that is not yet reflected in its climbing, but still comparatively low value.
“[In January], it traded 500,000,000 oz in a day on the COMEX when we only produce 800,000,000 in a year. Who the hell is buying and selling this stuff. It’s a paper market,” said Sprott, speaking at the Vancouver Resource Investment Conference.
As with gold, many analysts attribute the rise in silver prices to growing uncertainty in many global markets, particularly that of the United States and some European nations. As with many metals, much of the growing demand is also coming from emerging markets like China and India.
“Chinese net imports of silver are 112,000,000. In 2005, they were net exporters of 100,000,000 oz. That’s a 200,000,000 oz shift. The denominator is 800,000,000 oz, that’s what the world produces in a year,” said Sprott. “Where’s it all going to come from?.” Article here