Author Topic: "Silver Investment Demand Soars In China"  (Read 2026 times)

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Offline Birdman

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"Silver Investment Demand Soars In China"
« on: December 16, 2012, 11:52:19 AM »
December 15th, 2012
http://goldandsilverblog.com/silver-investment-demand-soars-in-china-0438/

"The use of silver as a monetary asset in China goes back for centuries.  As detailed in the latest report from the Silver Institute, China's entire monetary system was based on a silver standard until 1935.  Things changed dramatically after the Communists came to power in 1949 and effectively nationalized the entire silver stock.  Private citizens were prohibited from owning silver or gold and private sales of silver and gold jewelry was banned.
 
As China slowly adopted free markets principles, government control over silver was liberalized and in 2000, China finally ended the government monopoly on silver trading.  Private exchanges were established which allowed both the supply and demand of silver to expand rapidly.
 
A momentous moment for silver occurred in 2009 when the People's Bank of China finally allowed private investors to buy silver.  The opening of the silver market to the Chinese public along with explosive economic growth resulted in an exponential increase of silver demand.  A middle and upper class that was rapidly accumulating financial assets saw silver as the logical store of value to protect their wealth from inflation and currency debasement.
 
Removing the prohibition on the private ownership of silver resulted in explosive demand for silver bar, coins and metals.  Demand for coins and medals increased from 3.0 million ounces in 2009 to 5.8 million ounces in 2011.  Demand for silver bar increased from 1.3 million ounces in 2009 to 11.3 million ounces in 2011.
 
The Silver Institute projects that retail investment demand for silver will grow robustly as silver becomes more available to the growing masses of the Chinese middle class.  Currently, investor demand for silver accounts for only a small part of total silver demand.  In 2011, total Chinese silver demand was 170.7 million ounces, with investors purchasing only 17.1 million ounces of coins, medals and bars.  With a population of almost 1.4 billion people, demand for silver could surge exponentially.  If only 1 out of 4 people in China buy one ounce of silver each year, that would represent silver demand of a staggering 350 million ounces, which exceeds total annual silver supply of 281.5 million ounces in 2011.
 
Long term investors in both gold and silver who understand the underlying fundamental reasons for owning precious metals should ignore short term price fluctuations and increase positions on short term weakness."

Offline SANDAC

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Re: "Silver Investment Demand Soars In China"
« Reply #1 on: January 09, 2013, 10:37:06 PM »
This one chart says it all.  China is a big silver producer and getting bigger year by year.  She used to export silver to Hong Kong, but that turned around around 2009, and now she import silver from Hong Kong. 

Offline pandamonium

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Re: "Silver Investment Demand Soars In China"
« Reply #2 on: January 10, 2013, 09:54:51 AM »
 Silver supply is rapidly disappearing.  Silver demand is rapidly increasing (gold too).  Articles of a Comex default, paper silver unwinding, etc are more common.  What will it take for precious metals to attain fair market value?  I agree w/ articles that say the US government is behind the price manipulation.  High PM prices will be a shock to the US dollar as it buys less gas and food .  Timing is the only question now.  This is the year that a bidding war for metals will begin.  As precious metals rise what about rare coins?  They are the best of the PM.  When will a bidding war begin for MCC?  Now it is all about accumulation and waiting for the price leverage to go the other direction, up.  My only question is timing.  As I have stated on several occasions, $1,000 oz silver bullion.  (I read about silver headed to extreme high prices back in 2005)  Does anyone have a logical point of view against this?.........

Offline pandamania

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Re: "Silver Investment Demand Soars In China"
« Reply #3 on: January 10, 2013, 10:36:38 AM »
Pandamonium,

I agree with your assessment that the markets have been subject to influences outside normal free market variables. I think this has been apparent in stock future activity and the paper metals market for years now.

Physical metal demand is steadily increasing while paper prices on gold/silver and their underlying stocks have been beat down in some cases to absurd levels (i.e. small cap mining stocks).

You appear to be very well read on the subject of demand. Will silver prices hit $1000? Who knows for sure about the ultimate prices in dollars or the future value of this currency. If we were to attain this price then based on a historically normal relationship this would put gold at $16,000 (Alf Field has forecast $10,000 as a possible high using Elliott analysis).

Regards,

Pandamaina

Offline pandamonium

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Re: "Silver Investment Demand Soars In China"
« Reply #4 on: January 10, 2013, 03:56:33 PM »
I read Alf field too.  Here is a link to Jay's (the other Jay...Jay's Rare Pandas) latest.....


http://rare-panda-coins.blogspot.com/


RCC is low on silver pandas inventory.  If you subtract the SOLD pandas then the list is much smaller.........

Offline pandamonium

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Re: "Silver Investment Demand Soars In China"
« Reply #5 on: January 11, 2013, 09:45:48 AM »
This article says bullion supply is dropping but we may have a few months before it is like demand in 2008.  I hope the supply will be OK until the end of the year but a few big buyers could change that.  Until then, lets track bullion supply as it will have an impact on the MCC market.........



http://numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=26340