Investor interest groves in silver
The main categories of global silver investment have increased appreciably this year, led by fresh all-time highs for silver in exchange-traded products (ETPs), where 746 million ounces of silver are currently allocated, global mint bullion coin sales rising by 30 percent year-on-year through July, and strong net-long positioning on COMEX (with net money managed longs up over 60% since the start of this year).
The silver price, which began the year at $15.44 per ounce, is up 11 percent as of the end of September, posting a yearly high of $19.30 on September 4, a level not seen since 2016.
Against this backdrop, the Silver Institute released a new market report today, entitled “Global Silver Investment,” prepared by Metals Focus, a leading global precious metals consultancy. The report examines current silver investment trends, as well as highlighting opportunities and identifying potential headwinds for the white metal.
Metals Focus looks at the various influences on the silver price, its correlation to other commodities, macroeconomic variables, and the silver supply and demand balance.
The report also explores the main areas of silver investment demand:
1: Commodity exchanges – a segment which is arguably the most sensitive to changes in investor sentiment, and the most volatile area of silver investment, featuring standardized contract sizes, delivery dates, and settlement locations;
2: Exchange-traded products – traded like stocks and tracking the spot price of silver with stored metal backing the shares. ETPs are a convenient way to invest in physical silver which has become popular amongst retail investors; 3: Physical investment – notably silver bars and coins;
4: Mining equities – offering investors the potential to benefit from stock appreciation and, in some instances, dividend streams; and 5: Over-the-counter – an important market for silver investment with “off-exchange” transactions between investors and dealer/brokers, which can offer greater flexibility for investors than futures exchanges in terms of quantities, qualities and form of metal, and delivery locations.
