The latest silver investment vehicle, the ETFS Silver Trust, starts trading on NYSE Euronext today (Friday 24th July) with trading symbol SIVR. The instrument is an investment trust, sponsored by ETFS Services LLC, a wholly-owned subsidiary of ETF Securities Ltd. This offers another opportunity for investors to gain exposure to the silver market without having to have a "commodities" account with a bank or broker.
This silver instrument is the newest precious metals investment trust.
Silver ETFs currently hold the equivalent of 1.6 years' jewelry demand, while the gold ETFs, at just less than 1,620 tons, hold the equivalent of between 70% and 80% of one year's jewelry offtake, at a value of $49 billion with gold at just below $940.
This might suggest, therefore, that silver ETFs are top heavy by comparison with gold, when compared with the jewelry demand in their respective markets. This is not necessarily the case, however.
The slowdown in overall demand has not been that dramatic, however as the fall in photographic offtake has largely been offset by a proliferation in industrial uses of silver, which have grown from 11,640 tons in 2000 to 13,910 tons in 2008, an annual average growth rate of almost 2.3% per annum. These elements of demand did fall last year, but by less than 1.5%, with a fall in fourth quarter demand counteracting the effect of strong growth in the first half of the year. Total fabrication demand for silver fell to just less than 26,000 tons in 2008, compared with a recent peak of just over 27,700 tons of demand In 2000 (figures from GFMS Ltd).
All the indications are that this year's market will generate a substantial surplus. So far this year, investment in ETFs and by implication the Over the Counter market has been strong enough to absorb this metal, and probably more. The question for debate is whether this momentum can be maintained.
This silver instrument is the newest precious metals investment trust.
Silver ETFs currently hold the equivalent of 1.6 years' jewelry demand, while the gold ETFs, at just less than 1,620 tons, hold the equivalent of between 70% and 80% of one year's jewelry offtake, at a value of $49 billion with gold at just below $940.
This might suggest, therefore, that silver ETFs are top heavy by comparison with gold, when compared with the jewelry demand in their respective markets. This is not necessarily the case, however.
The slowdown in overall demand has not been that dramatic, however as the fall in photographic offtake has largely been offset by a proliferation in industrial uses of silver, which have grown from 11,640 tons in 2000 to 13,910 tons in 2008, an annual average growth rate of almost 2.3% per annum. These elements of demand did fall last year, but by less than 1.5%, with a fall in fourth quarter demand counteracting the effect of strong growth in the first half of the year. Total fabrication demand for silver fell to just less than 26,000 tons in 2008, compared with a recent peak of just over 27,700 tons of demand In 2000 (figures from GFMS Ltd).
All the indications are that this year's market will generate a substantial surplus. So far this year, investment in ETFs and by implication the Over the Counter market has been strong enough to absorb this metal, and probably more. The question for debate is whether this momentum can be maintained.
