Silver is a precious and scarce metal with a high intrinsic value. This fact explains its historical role as a currency and its continued relevance as an investment asset. Since the industrial era, silver has become increasingly important as a raw material, and its unique characteristics make it essential for numerous industrial applications, including clean energy use.

The scarcity and value of silver has always motivated the conservation and hoarding of the metal in its purest and heaviest forms, such as coins, ingots, silverware and, to a lesser extent, jewelry. In the case of other manufactured products, the silver content may also have an inherent value related to the precious metal content. Together, these various forms of silver constitute the above-ground reserves of precious metal.  

To examine the relationship between the level and changes in above-ground stocks and the silver price, the Silver Institute commissioned a new Market Trends Report, "Price Sensitivity of Above-Ground Silver Stocks," prepared by Precious Metals Insights. 

The report argues that there is no correlation between the overall level of above-ground stocks and the price of silver.

Some of the main conclusions of this report are summarized below:

*There is no correlation between the overall level of above-ground stocks and the price of silver;

*Annual changes in total above-ground stocks and the price of silver are also uncorrelated;

*Conversely, movements in bullion stocks have an impact on the price of silver and vice versa. 

*The vast majority of above-ground stocks are "immobile", with only small net additions to or subtractions from stocks on an annual basis;

*Increases in bullion stocks are often positively correlated with price, as investment demand increases when silver prices rise, which further stimulates higher prices;

Declines in bullion prices over several years have tended to occur in bear markets for silver, which has exacerbated them. However, these declines have generally led to more substantial rallies in silver as investors have rebuilt their bullion holdings.

Surface stocks of manufactured goods are less price sensitive than those of bullion. Only certain subgroups of silver manufacturing demand show price sensitivity, such as jewelry and silverware. 

To view the report click here