Sunday, November 13, 2011

Silver Investment Update by The Silver Institute

The Silver Institute has released a detailed update on the silver investment market including mining stocks and a supply/demand update.  Physical Investment update starts on Page 17.

The North American silver retail investment market is dominated by the United States, which has recently benefited from robust demand for (in particular) its 1oz Eagle bullion coin, 100oz bars and1oz rounds. However, in recent years there has also been a substantial gap between the level of Eagle coin production and the total consumed locally. This has been due to the substantial flow of coins into Europe, especially into the German speaking countries of Switzerland, Austria and, especially, Germany itself. In recent years there have been quite distinct trends in the United States in terms of the consumption of bars and coins, each of which are discussed below. Looking first at the coin market, the production of Eagles has surged in recent years, after remaining broadly stable during the 1999-2007 period, at an average of 9.4 Moz(292 t) per annum. However, in 2008 total off take leapt to a record high of 19.7 Moz (613 t), before rising to 34.7 Moz (1,079 t) in 2010. This year, a fresh peak will be set, in excess of 41 Moz (1,275 t),which will therefore achieve a similar gain to the 20% improvement posted in 2010. The US Mint’s impressive outturn has presented the Mint with a series of challenges, principally in terms of sourcing sufficient quantities of blanks (not only to produce bullion coins, but also to satisfy the range of commemorative coins released each year).