Silver could easily eclipse the metal's 1980 nominal high of $50 an ounce this year. And whenever you learn just how small silver is available on the market right now, I think you'll agree. The ten largest precious metal traders on COMEX currently hold net short silver positions that represent more than 330 million ounces - almost half of total global silver production.
Compare that to gold, in which the net short position in of the exact same ten traders represents 25 million ounces (or perhaps a mere 1%) of the 2 billion ounces of global gold inventory. That means the net short position in silver is 27 occasions greater than that of gold. This is setting up what I think could be an explosive scenario for smart gold investors. Rare Coins, Silver Coins, Gold Coins >> http://www.silver-
The world's largest holders of silver bullion account for roughly half (500 million ounces) of the available 1 billion ounces of worldwide silver. This really is spread over the seven largest investment funds, which include iShares Silver Trust (NYSE: SLV), the Central Fund of Canada (AMEX: CEF), and others.
This means only 500 million ounces remain for the rest of the globe to invest in. And remember that, at some point, 330 million ounces of this will ultimately need to become purchased by the net physical short positions of the ten biggest short players who will have to eventually cover. That means there would only be 170 million ounces of silver available to investors worldwide who are all of a sudden buying silver in ever-increasing amounts.
And in contrast to gold, there's little in the way of accessible above ground silver inventory.
The COMEX reports roughly 120 million ounces of silver in inventory. But those who hold a warehouse receipt currently account for most of this. All this becomes a real problem when you think about that ownership of physical silver is practically becoming a religion in China. In the past 16 months, China has gone from a net exporter of 100 million ounces of silver to a net importer of ~150 million ounces of silver. This essentially means that 250 million of silver is no longer accessible to the market on an annual basis.
The Chinese government is teaching their citizens the ownership of silver is an antidote to a devaluing U.S. dollar. And they are right. This has huge implications for the silver marketplace when you consider the 1.3 billion individuals who live you will find rapidly becoming more interested in purchasing physical bullion... and will continue to do for quite some time in growing amounts.
The price of silver is now inside striking distance of re-testing record highs as the metal continues to react to increasing global demand and quickly diminishing supplies. As I mentioned, I expect to see the price of silver top $50 this year. In respect to this, I continue to urge investors to purchase physical silver while it is still effortlessly accessible to the retail marketplace. Investments in physical silver - as well as quality silver stocks - will perform very nicely in the coming months and year. My suggestion would be to buy silver and buy gold while the prices are still relatively inexpensive. How High Will Silver Go? Learn More >> http://silver-