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Is The Silver Price About To Hit $50?

Original newz story - Click here

This analysis was originally published in the Future Money Trends Weekly Wealth Digest (You can subscribe here).

Due to some foul play by industry insiders and misinformation by the financial media, we believe silver is likely the most undervalued physical asset available to investors today. Over the past decade, the ETF SLV has siphoned off a significant amount of demand from both the physical silver market and the mining shares themselves.

The COMEX has also regularly been used to manipulate the precious metals, through margin increases, massive selling during holiday hours, and the fact that the futures market just doesn’t have the metal to support all of the trading that goes on.



In the end, this is going to be about supply disruption, in the face of surging demand for monetary purposes.  It’s true, silver is used for many industrial purposes, including things like healthcare, pharmaceuticals, water treatment, solar, electrical grids, vehicles, phones, computers, bandages, RFID chips, high-tech weaponry, and thousands of everyday uses, but the biggest increase in demand we are seeing is coming from investment demand.

On the supply side, silver and many metals and minerals are experiencing serious supply disruption.  In a high silver-producing country like Canada, silver production is down 31% year-over-year!

Year to date, Mexico is down 4%, Chile 4%, and Australia is down a whopping 41%! Only 20% of silver comes from primary silver producers… the rest of silver comes from zinc, copper, gold, and other metal mines. This is important, because right now, we have a situation where primary silver producers are now selling silver for market prices, and in some cases, below the cost of production itself.

We are already seeing major zinc mines shut down operations this year in Australia and Ireland, and even more closures are planned for next year. Bloomberg reported record zinc shortages. In Canada, billion-dollar giant HudBay, in their last investor conference call, literally stated that one of their most profitable mines, the 777 mine,”was now approaching the end of its life.”

This is important to note, because even in the face of falling demand, commodity prices can rise if there is a supply shortage.

The equation is simple: is supply shrinking faster than demand? However, in silver’s case, supply is shrinking dramatically from both silver mines and other metal mines, and demand is soaring due to its monetary history.

Here are the raw the numbers for total supply for the past 5 full years. This includes mine production and recycled silver.

Supply
2010 – 1.1 billion ounces
2011 – 1 billion, 41 million ounces
2012 – 1 billion ounces
2013 – 1 billion
2014 – 1 billion, 60 million ounces

Demand
2010 – 1 billion ounces
2011 – 1.1 billion ounces
2012 – 963 million ounces
2013 – 1.1 billion ounces
2014 – 1 billion, 60 million ounces

Hidden in those numbers is scrap supply, which is in a full-blown collapse. In…