Where is the World’s Silver?

With the price of gold hovering near 67 times the price of silver, a logical deduction must be that silver is much more abundant, and easy to acquire than silver. To the contrary, evidence proves otherwise. In fact there is very little silver to be found anywhere.

Known Above Ground Silver Holdings in Ounces

Silver ETF SLV 295,313,780

US Eagles Minted 240,418,077

COMEX Warehouses 114,102,049

Estimated Private Bullion (non eagles or maples) 120,000,000

Central Fund of Canada 75,209,103

LBMA Estimated stocks 75,000,000

Canadian Maples Minted 21,303,000

Silver ETF ZKB – SWISS 7,397,885

BMG Bullion Fund 5,033,609

Total 953,777,503

There is nearly twice as much gold as there is silver in the form of investment grade above ground bullion and coins, and that ignores that fact that 52 percent of the worlds gold is kept in jewelry. While there is an 953 million ounces of above ground silver, there is an estimated 1,803 million ounces of above ground gold in bullion form.

It is important to note a few structural differences in the holdings of gold and silver as well. Approximately half of the above ground gold bullion is held by governments. There are no known silver reserves held by governments. While governments have historically sold their gold to finance their budgets and keep the gold price contained there is no similar readily available entity that could sell silver bullion. Precious metals investors often hold onto their precious metals for time periods measured in years, decades, and lifetimes. Most private investors will not sell their bullion for a 10 percent or possibly even a 100 percent gain. Therefore, even if there are nearly 1 billion ounces of silver in existence, the question remains on how much of that is actually for sale at anywhere near today’s prices.

The implied dollar value of all the silver bullion is tiny compared to gold, or other assets. In fact, measured in dollar value, silver is 1/127th of gold. Many investment funds have more than the silver market of $16.88 billion however gold is more readily available to purchase in larger dollar amounts. Silver may be one of the most neglected and unloved assets of this century. Perhaps, the reason why silver is so cheap is ironically because it is too rare to be invested in by asset managers. Or is it?