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Silver Facts

Demand for silver is built on three main pillars: industrial uses, photography and jewelry & silverware. Together, these three categories represent more than 95 percent of annual silver consumption. Sparkling tableware, shining jewelry, and living spaces brightened by silvered mirrors are the obvious contributions of silver to our daily lives. It is, however, the silver behind the scenes that makes our modern world function more efficiently. Inside switches, silver contacts efficiently and safely turn on and off the powerful electric current that flows into our homes, our lamps and our appliances. It is silver under the keys of computer keyboards, behind automobile dashboards, and behind the control panels of washing machines or microwave ovens that switch on or off at the touch of the finger. And inside the 220-volt line circuit breaker boxes in our homes or inside the 75,000-volt circuit breakers in power stations, silver performs safely and steadily to switch on or off our most dependable servant, electric power, throughout our lives. Silver has been a multifaceted asset throughout history. It was found as a free metal and easily worked into useful shapes and was widely used by early man. The beauty, weight and lack of corrosion made silver a store of value, and hence one of the earliest of metals to be used as a medium of exchange. The early discovery that water, wine, milk and vinegar stayed pure longer in silver vessels, led to its desirability as a container for long voyages. Herodotus wrote that Cyrus the Great, King of Persia, a man of vision who established a board of health and a medical dispensary for his citizens, had water drawn from a special stream, "boiled, and very many four wheeled wagons drawn by mules carry it in silver vessels, following the king wheresoever he goes at any time." In more contemporary times, when the first telegrapher tapped out his code in 1832, silver was the electrical contact that made the current flow. Earlier that century, when Joseph Nicephore Niepce created the first photographic image obtained through a camera-like device in 1813, it was silver nitrate that made it possible. Finally, when the German obstetrician, Dr. Carl Crede made his medical breakthrough in 1884 to halt the diseases that caused blindness in generations of children at birth, it was silver that killed the viruses. Today, modern technology has revealed an even more remarkable range of electrical, mechanical, optical, and medicinal properties that have placed silver as the key metal in many applications.

Demand and Supply in 2010

Total fabrication demand grew by 12.8 percent to a 10-year high of 878.8 Moz in 2010; this surge was led by the industrial demand category. Last year, silvers use in industrial applications grew by 20.7 percent to 487.4 Moz, nearly recovering all the recession-induced losses in 2009, and is now seeing pronounced advances in 2011. Jewelry posted a gain of 5.1 percent, the first substantial rise since 2003, primarily due to strong GDP gains in emerging markets and the industrialized worlds improving economic picture. Photography fell by 6.6 Moz, realizing its smallest loss in nine years, as medical centers deferred conversion to digital systems. Silverware demand fell to 50.3 Moz from 58.2 Moz in 2009, essentially due to lower demand in India. World Silver Demand

Silver mine production rose by 2.5 percent to 735.9 Moz in 2010 aided by new projects in Mexico and Argentina. Gains came from primary silver mines and as a by-product of lead/zinc mining activity, whereas silver volumes produced as a by-product of gold fell 4 percent last year. Mexico eclipsed Peru as the worlds largest silver producing country in 2010, and Peru is followed by China, Australia and Chile. Global primary silver supply recorded a 5 percent increase to account for 30 percent of total mine production in 2010. Top 20 Silver Producing Countries in 2010 (millions of ounces) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Mexico Peru China Australia Chile Bolivia United States Poland Russia Argentina Canada Kazakhstan 128.6 116.1 99.2 59.9 41.0 41.0 38.6 37.7 36.8 20.6 18.0 17.6

13. 14. 15. 16. 17. 18. 19. 20.

Turkey Morocco India Sweden Indonesia Guatemala Iran South Africa

12.3 9.7 9.7 9.2 6.9 6.3 3.4 2.8

Primary silver mine cash costs remained relatively flat year-on-year, falling by less than 1 percent to $5.27/oz. from a revised $5.29/oz. in 2009. Net silver supply from above-ground stocks increased to 142.9 Moz in 2010, primarily due to higher scrap supply, a shift of net-producer hedging to the supply side, and a considerable rise in net-government stock sales. Regarding scrap supply, 2010 witnessed a 14 percent increase over 2009 as gains in industrial and jewelry recycling exceeded an ongoing decline in recovery from photographic sources. The swing to net-producer hedging of 61.1 Moz ended a four-year run of de-hedging and is attributed to higher silver prices and was limited to a group of by-product, rather than primary silver producers. Net government sales of silver rose to 44.8 Moz, primarily the result of increased sales from Russia, with China and India remaining relatively silent for the second consecutive year. Supply from Above-Ground Stocks (Million ounces) Bullion Implied Net Disinvestment -120.7 -178.0 Net Producer Hedging Net Government Sales Sub-total Bullion Old Silver Scrap Total -22.3 15.5 61.1 44.8 2009 2010

-127.5 -72.1 188.4 215.0 60.9 142.9

World Silver Supply and Demand

To document these and other market fundamentals, each year the Silver Institute works with GFMS Limited, of London, a leading research company, to prepare and publish an annual report of worldwide silver supply and demand trends, with special emphasis on key markets and regions. This annual survey also includes current information on prices and leasing rates, mine production, investment and fabrication. To learn more about the general production and uses of silver, please see our Production and Uses pages. For articles related to supply and demand, see the Silver News archives. World Silver Supply and Demand (in millions of ounces) 2001 2002 2003 2004 2005 2006 Supply Mine Production Net Government Sales Old Silver Scrap Producer Hedging 606.2 593.9 596.6 613.0 637.3 641.7 63.0 59.2 88.7 61.9 65.9 78.5 665.4 42.5 199.0 --907.0 681.9 28.9 193.7 --904.5 718.3 15.5 188.4 --922.2 735.9 44.8 215.0 61.1 -1,056.8 2007 2008 2009 2010

189.0 196.3 194.0 195.2 198.6 203.3 18.9 -18.9 -1.6 9.6 -27.6 ----

Implied Net Disinvestment -Total Supply

877.1 868.3 881.0 879.7 929.5 923.5

Demand Fabrication Industrial Applications Photography Jewelry Silverware Coins & Medals Total Fabrication Producer De-Hedging Implied Net Investment 349.7 355.3 368.4 387.4 431.8 454.2 213.1 204.3 192.9 178.8 160.3 142.2 174.3 168.9 179.2 174.8 173.8 166.3 106.1 83.5 30.5 31.6 83.9 35.7 67.2 42.4 67.6 40.0 61.0 39.8 491.1 117.6 163.5 58.5 39.7 870.3 24.2 12.5 492.7 101.3 158.3 57.1 65.4 874.7 11.6 18.2 403.8 79.3 158.9 58.2 79.0 779.2 22.3 120.7 487.4 72.7 167.0 50.3 101.3 878.8 -178.0

873.6 843.5 860.1 850.6 873.6 863.5 -3.6 24.8 -20.9 --29.1 -55.9 6.8 53.2

Total Demand

877.1 868.3 881.0 879.7 929.5 923.5





Silver Price (London US$/oz)

4.370 4.599 4.879 6.658 7.312 11.549 13.384 14.989 14.674 20.193

SOURCE: World Silver Survey 2011

Silver Uses
Demand for silver is built on three main pillars: industrial and decorative uses, photography, and jewelry & silverware. Together, these three categories represent more than 95 percent of annual silver consumption. In 2007, 455.5 million ounces of silver were used for industrial applications, while over 128 million ounces of silver were committed to the photographic sector, 163.4 million ounces were consumed in the jewelry market, and 58.8 million ounces were used in the silverware market. Why is this indispensable metal in such demand? The reasons are simple. Silver has a number of unique properties including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light and the ability to endure extreme temperature ranges. Silvers unique properties restrict its substitution in most applications. Choose from the following list to learn more about some of the various applications of silver:

Traditional o Coinage o Photography o Silver Jewelry o Silverware and Table Settings Industrial o Batteries o Bearings o Brazing and Soldering o Catalysts o Electronics Emerging o Medical Applications o Mirrors & Coatings o Solar Energy o Water Purification

Price: Background
Silver is a commodity that is traded 24 hours a day in the worlds market centers London, Zurich, New York, Chicago and Hong Kong. The London market started trading in the 17th century, and it like other major markets provides a vehicle for those who wish to trade in physical silver on a spot basis, or on a forward basis for hedging purposes. The London market has a "fix" which offers the chance to buy or sell silver at a single price. The fix begins at 12:15 p.m. and is a balancing exercise; the price is fixed at the point at which all the members of the "Fixing" can balance their own, plus clients, buying and selling orders. Although London remains the true center of the physical silver trade for most of the world, the most significant paper contracts trading market for silver in the United States is the COMEX division of the New York Mercantile Exchange. Spot prices for silver are determined by levels prevailing at the COMEX; and although there is no

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A primary factor affecting the price of sil er is the available supply versus fabrication demand. In recent years, fabrication demand has greatly outpaced mine production forcing market participants to draw down existing stocks to meet demand. As these available sources continue to decline, silver's fundamentals continue to strengthen. owever, since silver is a tangible asset, and is recogni ed as a store of value, its price can also be affected by changes in things such as inflation real or perceived), changing values of paper currencies, and fluctuations in deficits and interest rates, to name a few. !"!  o read about the evolution of the silver market from through present li      .

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actors that Influence Silver Prices

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The Effect of Silver Stockpiling: Silver is one the best conductors of energy which makes it an important component in most electrical devices. It is also a very good reflector of light making it valuable to producers of mirrors, windows, and other glass products. When silver prices rise, large companies that are dependent on the metal tend to horde it.[12] This can further drive up demand, as was the case with palladium. In 2000, the Russian supply of palladium was disrupted causing prices to rise. In response, companies who used palladium in their products began to stockpile the metal.[13] This drove prices up to $1,100/oz from $330/oz previously.[14]

Silver is a Byproduct Metal: About 80% of mined silver is gathered as a byproduct of other metals, such as copper, nickel, zinc, and lead.[15] . Most of this metal comes from mines outside of the U.S. When the dollar falls against other currencies, the cost for importing these metals rise and demand falls, driving down silver production.. Shorting Silver: On the Commodity Exchange (COMEX), the silver short position is very large. In fact, silver is the world's only commodity that has a short position which is larger than both its global production and inventories.[16] The extent of this position has been created by naked short selling, which means shares are sold without an arrangement or promise of a borrower. This large short position helps to keep silver prices lower than they may be otherwise. Countries Buying and Selling Silver: When countries sell their reserves of silver in the market they increase the supply of silver available. However, in 2007, sales from countries dropped 46% because China and India did not sell as much silver as they did in the past. Mine Production: Although the majority of silver is produced as a byproduct of other metals, 20% comes from actual silver deposits. Mine production grew only 4% in 2007 to 670.6M oz and additional silver deposits are becoming increasingly difficult to find. [17]



Summary Silver prices are strong and having overcome the 2008 highs at $21.36/oz, the next upside target is likely to be $25/oz. This will represent something close to a 50% retracement of the fall to $3.53 from the high in January 1980 wh en, on the 18th of the month, Silver fixed at $49.45. Investment demand remains all important as it has in recent years been absorbing the supply surplus. There are some signs that investor demand is slowing. Even though the recovery after the 2008 reces sion has been much stronger and more robust than we thought it would be, we still feel there are downside risks. The debt legacy remains a big unknown and we feel it might have further negative consequences for the dollar that could lead to a dollar cri sis. The economic and fiscal uncertainty suggests investors are likely to keep their interest in Silver for some time to come, but watch out in case that changes.

Introduction The Silver market promises to be interesting over the next few years as there is likely to be a change-over in the primary driver of demand. In recent years investor buying has been the swing-factor that has driven prices higher, but demand for safe-havens is likely to wane in the years ahead. However, a few new applications for Silver have the potential to become swing factors. In the short term, the global economic situation remains uncertain and there may well be more turmoil in the financial markets before a more sustainable economic recovery gets going. In this case Silver pric es have potential to rise further. The longer term outlook for Silver is also interesting with demand seeming likely to undergo a structural change as new technology (including Silver -zinc batteries) emerges, some of which could consume meaningful amounts of Silver. This new technology could substantially reduce Silvers recent dependence on investor off-take to balance supply and demand. The prospects of this new technology are also likely to make investors even keener to own Silver, although at the moment it maybe too early for them to do so. The biggest risk to Silvers bull market is if investors start to reduce their exposure to safe-haven investments. Silver has been in a supply surplus since 2003, so a lot of Silver has been bought by investors and now that prices are at levels not seen for 30 years there may be increased interest in taking profits if investors feel that economic growth will provide better investment opportunities elsewhere. The short-tomedium term outlook therefore is very much depen dent on how long such investors feel the need to keep, or even increase, money invested in safe havens. In turn, this will depend on how the global economy performs. New technology promises a new era for Silver, but between now and when this technology takes-off is likely to lead to some wild swings in Silver prices and hence produce numerous risks and trading opportunities.

INVESTMENT DEMAND With Silver supply outpacing fabrication demand in recent years, investors off take has been critical in driving the overall bull market and the emergence of Exchange Traded Funds (ETFs) have been central in facilitating this growth in

investment demand. A slight concern is that although the combined holdings in the ETFs have continued to grow, the rate of increase has slowed in 2010. In 2008, holdings in the ETFs grew 39%, they climbed 49% in 2009, but on a pro rata basis they are so far only showing growth of around 10% this year . The fact that redemptions up until now have been light is one thing, but new purchases have to be made if the supply surplus is going to be absorbed. If ETF buying does not pick-up soon we will start to get nervous, especially as Gold is setting fresh record highs.

More room for speculators Although the level of buying by ETF investors has been slow, as discussed in the section above, funds have been active buyers. The net fund long Silver position dropped during the broad market correction in May and again in late July, but it has bounced back with vengeancein late August and throughout September. This run up in the net fund long position has happened while both longs and shorts have been adding to their exposure, which suggests increased volatility in the near term as one party is likely to have to throw the towel in. From the most recent dip in the net position, which was seen on 27th July, the longs have increased their exposure from 25,308 contracts to 66,066 contracts, a gain of 161%, while shorts have increased their exposure by 265%. Ho wever, compared to previous peaks in the net long position, the present position is still 30% below the 2005 peak. As such, there seems good potential for prices to rise if the situation remains bullish

Supply from Scrap Silver supply from scrap has been falling in recent years as the photo industry has used less Silver and therefore generated less scrap. However, scrap supply is expected to pick-up in 2010 as high prices both in dollar terms and in some key local currencies, such as the Indian rupee, have attracted more old scrap supply to the market. The dramatic rise in Gold jewellery recycling, which is a relatively new phenomenon in developed countries, is believed to have attracted a significant pick-up in old Silver jewellery and silverware recycling too. With the prospect of higher Silver prices, we expect more scrap to come on to the market, especially from Asia, even though we suspect that there will be solid gains in developed markets too. In 2009, scrap supply fell 292 tonnes, but we believe it may climb 3% in 2010 and 4% in 2011, on the basis that higher prices will attract more old Silver from households. However, should prices start to spike higher, supply from old scrap, jewellery, silverware etc, could pick-up markedly as it did in 1980 when Silver spiked up towards $50/oz.

Government stocks continue to fall In 2009, net government sales from stocks totalled 426 tonnes, which was down from 858 tonnes in 2008 and an average of 2,040 tonnes seen between 2001 and 2007. Sales were therefore 58% lower in 2009, than the recent average. An absence of government sales from China and India and lower sales from Russia accounted for the lower level of stock disposal. Given that India and Russia are buying Gold for their strategic reserves it seems they may be holding on to their Silver too. Likewise, although China might not be looking to diversify its reserves by buying Gold in the open market, it may well be accumulating bullion from domestic producers. Given the trends in official sales in Gold and Silver in 2010, we expect government sales from stocks to continue to decline in 2010 and 2011. It is now estimated that government stocks had

fallen to 1,906 tonnes at the start of the year. Although accurate data on government holdings are hard to come by , if the figure now stands around 1,800 tonne level, then the large burden of 23,000 tonnes that was overhanging the market in 1997 has been severely depleted and is likely to limit sales going forward. For 2010 and 2011, we expect sales to drop around 200 tonnes.

Balance The Silver market swung from a supply deficit to a surplus in 2003 and has remained in one since. Whats more, the surplus has been escalating, which makes it even more surprising that prices have performed the way they have. This has happened because strong investment demand has soaked up the surpluses. In recent years, the high level of ETF buying has managed to absorb the net of total supply less fabrication demand, even when fabrication demand has fallen. Another supply surplus will be seen in 2010, but that has not stopped prices rising further and with yet more oversupply forecast for 2011, you have to wonder when investors will slow their buying, let alone start to liquidate what they already hold. Cumulatively, since 2003, the i mplied physical surplus is estimated at around 11,700 tonnes

TECHNICAL OUTLOOK :: After strong gains in 2009, Silver prices corrected in early 2010, but then ran higher again between February and May. Prices then consolidated in a symmetrical triangle until late-August when they broke higher. The count on the triangle was for a $2.70/oz move and a target of $21.50/oz which has now been reached. If you draw a line along the tops since February 2009, then that line is now around $24.80/oz, which has been hit, but prices have since pull back from that line, suggesting it is a valid resistance line. In the year ahead it would not besurprising to see prices extend into the $25 -$27/oz range. This is approximately the area that corresponds to a 50% retracement of the fall back from the historic highs near $50/oz, in 1980. If prices were to continue to rise strongly, the 61.8% retracement level would be around the $32.25/oz level.

Conclusion and Forecast The situation in Silver remains very interesting in that the market continues to be in a supply surplus but prices are rising strongly. On the surface, the rally in Silver looks quite vulnerable but the economic and fiscal outlooks suggest there is still room to remain bullish and there are also some exciting po tential developments in industrial demand, namely solar cells and Silver -zinc batteries. The time-line of various events is therefore going to be all important. If sustainable economic growth is seen sooner rather than later, then there is likely to be significant investor long liquidation that is likely to lead to a tumble in prices. However, while concerns over economic recovery remain in place then the markets are likely to continue to be concerned about governments fiscal policies, their debt burden and methods they will use to try to correct the economic malaise. If the economic uncertainty drags on long enough for demand from new technology to become meaningful then Silver prices could stay up in a higher trading range. Investors interest will remain critical. Demand from ETF investors has slowed so far in 2010 and that is a worry as continued high investor off -take is needed to absorb the supply surplus. Given the economic uncertainty, the potential for more quantitative easing and concerns over the dollar, we would not be

surprised to see investor demand pick-up again and in that case we could see Silvers rally continue. However, if investor interest remains subdued then it will likely make investors nervous and in turn that would increase the risk of a correction.In the near term, there is a risk of a deeper correction in equities and industrial metals as the rebounds in these seem to have run ahead of the economic fundamentals. A correction in equities and industrial commodities would likely cause a pull back in Silver prices too. However, we think the secondary reaction would see more safe -haven buying, especially if another period of economic weakness forced the US to take steps that further weakened the dollar. Overall we think the longer term outlook for Silver has improved as new technology looks set to provide new areas of significant consumption, which in turn is likely to see Silver prices trade at a higher price. In the short -to-medium term we feel that the economic climate will keep safe-haven demand strong and that could see prices rally further - we would not be surprised to see $27/oz at some stage. However, Silver could experience some very volatile conditions before the new industrial applications become a reality, if investors feel confident enough to liquidate their safe -haven positions. In this case prices could drop sharply and a return to around the $17.00/oz level would not be surprising.

MCX launches futures trading in silver micro

PTI, Feb 18, 2011, 11.09pm IST Tags:
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silver| MCX

MUMBAI: The Multi Commodity Exchange of India Ltd (MCX) on Friday launched futures trading in silver micro. The exchange has launched silver micro April and June 2011 contracts. The trading unit fixed at 1 kg and tick size (minimum price movement) fixed at Re 1 per kg.

Silver Report: Commodity Trading

Posted on November 4, 2010 by admin


Silver Commodity Since moving above $10/oz in March 2006, Silver prices have been on a roller-coaster ride with some fast and long rallies interspersed with steep and aggressive sell-offs; none more so than the drop from $21.36/oz to $8.50/oz between March and October 2008. However, the strong rebound after last years sell-off does indicate ongoing steady interest.

Silver has benefited from being both an industrial metal and a cheap precious metal, as industrial metals have rallied strongly in anticipation of an economic recovery and as a cheap precious metal, it has won market share from Gold jewellery. Also as a precious metal it has been sought after as a hedge against dollar weakness and financial distress. Given the diverse nature of Silver demand, prices are expected to perform well as even if weakness is seen in one area of demand; the other areas should hold up and indeed could see demand accelerates. Silver also does not have the threat of IMF sales overhanging it. General for these reasons we feel there is still good upside potential for Silver and with prices (Basis$17.50/oz) still 18%below last years highs and arguably still 185% below the 1980 highs, the outlook remains bullish.

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However, given Silvers supply/demand situation the outlook for Silver can only be bullish while investors remain as committed to buying Silver as they have been in recent years. Over the past five years fabricated demand has on average been around 2,000 tonnes lower then supply. Overall, we remain bullish for Silver as it is likely to follow in Golds footsteps and at times Outperform it. Silver Supply Crisis Looms: The supply/demand dynamics of the silver market are vastly different from the gold market. It is those differences which guarantee that the looming spike in the price of silver will be several multiples greater than the increase in the price of gold. Primary mines produce about 30% of the worlds silver, while about 70% comes as a by- product of gold, copper, lead and zinc mining. Considering the phenomenal recovery in prices of industrial metals across the globe, backed by a bounce in manufacturing activities, silver prices may not look back in the near future. Scrap supply of silver is declining consistently since 2006 and is expected to remain under pressure in the future Scrap supply of silver is declining consistently since 2006 and is expected to remain under pressure in the future. Tweet with us & Stay updated on Commodity trading & More.. Overall, it sees supply set to decline by around 2% this year. On the other hand, fabrication demand is expected to decline by about 8% to 10% this year. However, it is not hard to believe that the huge accumulation by institutional investors can easily fill this gap. In contrast, when the looming silver supply-crisis strikes this will produce a global, industrial crisis. Unlike gold, which must only satisfy investment/monetary demands, silver is becoming an essential raw material of the 21st century global economy. This can be illustrated by simply listing some of the current and future industrial uses of this most-precious metal.

Power: Silver has reflective, chemical, and conductive properties which are superior to all other metals. This provides two key uses for silver in the production of solar energy. As the worlds most-reflective metal (reflecting 97% of all solar energy), silver is used to make the worlds best mirrors a vital component of solar energy production. In addition, because silver is such a superb catalyst, it also can improve the efficiency of solar cells, by being blended with these semi-conductor materials to increase the power-output of any such power unit by approximately 12% . In an energy-starved world, it is already a given that the entire world will have to dramatically increase the percentage of power from such clean-and-green power sources. With peak oil an obvious reality, and thus oil prices certain to increase to multiples of the current price, even a sharp rise in the price of silver would not reduce the demand for this power source, and there is no substitute for silver as peak efficiency of these solar power units must be achieved for solar energy to be a viable energy source (in any kind of large-scale applications). In the U.S. alone, 5 million ounces of silver are used each year in the production of mirrors. However, the vast majority of such production are of conventional mirrors (i.e. what we hang on our walls), since solar power is in its infancy. As this application grows in importance, those U.S. consumption numbers can be expected to jump dramatically. Projecting that consumption over the entire globe and it is easy to see global demand for silver just for mirrors/solar energy amounting to several, hundred million ounces per year. In the massive, global battery market, the newest generation of batteries uses a silver-oxide compound, replacing the previous generation of lithium-ion batteries. The silver-based batteries are not only much more environmentally friendly than the lithium batteries, but also contain no flammable compounds which have caused (for example) a number of laptop computers to spontaneously burst into flame. This is making silver-based batteries the new battery of choice for mobile phones and laptop computers (along with many other electrical applications). With these markets increasing exponentially on global basis silver consumption in batteries is also just in its infancy. Medicinal/Hygienic: As important as silver is becoming as a power source, that usage of silver is destined to be eclipsed by the consumption of silver due to another one of its superior properties: as an anti-bacterial agent.

In the former category, the first use of silver on a massive, commercial level has been to use silver in clothing. It is used in socks and other military-issue clothing because its antibacterial properties retard the development of bacterial infection eliminating a hygiene problem which has plagued armies for thousands of years. However, because it is bacteria which is the source of human odor from perspiration, the use of silver in sportswear has exploded into one of the largest, single applications of silver. This one usage already consumes more than 1,200 TONS of silver per year used in the manufacturing of 50 million tons of polyester sportswear (annually), alone. The potential usage in this one category of silver consumption is nothing short of mindboggling. Obviously, every hospital will at least consider the cost/benefits of using silver upholstery in all of its furnishings given that the spread of (anti-biotic resistant) bacterial infections in hospitals is one of the most serious health-issues in the worlds hospitals. With this bacterial infection problem spreading globally on an exponential basis, silverbased applications to fight this problem must also increase at least as quickly. In the world outside of our hospitals, we can expect the usage of silver as an anti-bacterial agent to amount to somewhere between ten times and 1,000 times the amount of silver used inside of hospitals. Obviously if silver is being widely used in hospitals then such usage must also spill-over into all the worlds doctors offices and clinics both medical and dental. Lack of space prevents me from getting into dozens of the other huge, current uses for silver (for instance, 1 out of every 7 pairs of glasses sold in the U.S. has a silver coating). What this means is that unlike the supply-crunch which is coming for the gold market and which will (eventually) take gold to several multiples of its current price, when the silver supply-crisis hits, we can expect the price of silver to increase to several times its current price virtually over-night. Trade in Commodities with Us in LOW Brokerage ~ Click Here What makes Silver Investments so Promising?

Silver Report Why are so many market analysts predicting rising prices for silver throughout 2010 and years beyond? The demand for silver is soon set to soar. In the current economic climate, with the value of a dollar decreasing steadily, investors are turning to commodities - real, tangible value for a viable hedge against inflation, and many experts feel theres never been a better time to consider silver investments. History Repeats Itself History has demonstrated that fiat currency, what some investors would refer to as fake money, has a poor success rate as virtually all civilizations that have adopted similar systems in the past have crashed and burned; however, in 1971, President Nixon passed a law that effectively stripped the worlds paper currency of its gold backing. This resulted in a rapid acceleration of money-printing, and with the governments perpetual printing of paper bills, the value of the overall currency pool continues to dilute. Rising Silver Investments

While gold has traditionally performed better than silver as a commodity, many predict silver investments will continue to rise in price, attaining heights never before reached by this precious metal. This is largely because, of all the precious metals, silver is the best heat and electricity conductor and is therefore used throughout the world for a variety of purposes. For this reason, silver is now scarce unlike gold, a precious metal of which we have no short supply of; a material thats primarily held onto and hoarded indefinitely. With increasing demand and scarce supply, silver investments will continue their growth as a primary financial venture, silver prices will continue to appreciate over the next ten years. SHORT TERM FACTORS LEADING TO A POTENTIAL RISE IN PRICE As our western economies expand and silver demand remains strong in the developing nations, 2010could see record demand levels. There is an increase in demand for industrial purposes stemming from the improvement of the world economy and global stimulus measures. Also, the increase in silver demand for investment purposes is getting viral not quite on golds level, but it doesnt have to be in order for us to see a huge spike in price given the lack of supply. Eventually investors will stop buying gold and start buying silver. How many investors do you know will buy gold at $1200? $1500? $2000? At certain price levels the risk/reward for investing in gold isnt good enough and investors will move to the next asset to hedge against inflation. Future of silver prices:

Silver Prices As silver supplies have continued to shrink, some Forward-thinking investors have seen how bright the possibilities are for silver investing and have taken the plunge, driving silver prices up substantially in 2009. As the stockpile of silver continues to dwindle, its production shows no signs of slowing it only continues to increase. With this precious metal having such a low supply, worldwide, and an increasingly high rate of consumption, can this pace really be sustained? In fact, many actually believe that silver may become the first property on the periodic table to become totally extinct. By contrast, the above ground supply of gold is increasing. Gold is never used up. Its just hoarded or circulated around. Gold always remains the same. Technical Outlook: Mcx Silver Weekly Chart: CMP: Rs 28240

Technical Outlook: Mcx Silver Weekly Chart

In March 2008 Silver has make a high of Rs 27500. After a strong rally it makes a low of Rs 16779 in November 2008. It has fallen almost to 40% in the span of 8 months form the march high. After a long period of Consolidation Silver has again made a life time high of Rs 29580 in December 2009. Silver prices are in process of making a fresh high which is likely to be seen in coming months. As far as pullbacks are concerned, 26500 should provide down trend line support. Silver prices are facing a small resistance near 29000. The Bull Run in September 2009 has taken the price from Rs 23600 to Rs 29500. We could see a similar bull run once price gives a sustainable closing above 29000 to new high in the coming months till 32000-33000. A move below the downtrend line would then suggest a possible pull back to around the 25000 area. Before this rally, we expect Silver to consolidate between 27300-28800 levels. This Consolidation is likely to follow for make the price to rise for the next upside move. The best buying area for Silver is in the range of 27800 -28000 for the expected target of 31000-32500 with a Stoploss of 26300. Overall we expect Silver to extend its gains higher than gold in 2010. Conclusion: We expect silver to continue to trade higher in the coming year as the demand-supply dynamics are beginning to reflect a return to a normal economy. We feel that silver is a unique metal in terms of performance as it wins whether the economy is in good or bad shape. Demand for the metal rises in both situations because if the economy improves then the industrial demand increases and if there is a downturn then investors buy it as a hedge against the downturn in the economy. In the coming year, we expect silver to witness a bullish phase as new avenues of demand open up amid the existing traditional applications of the metal. We also expect investment demand along with industrial demand to drive silver prices higher in the coming year.

Various permutations and combinations indicate that silver will have to outperform gold in order to achieve the past average of $50/Rs 45000. Its for this reason Jim Rogers is saying, Id rather own silver than gold.

Silver is available as a commodity in a number of grades. In India, for example, silver trading involves 6 grades of silver commodity, depending on whether or not it contains any impurities, and these grades are named for their degree of fineness (9999, 9995, 9990 etc). However, in order to be eligible for commodity trading on the Commodities Exchange (COMEX) the quality of the silver commodities cannot drop below .999 fineness.

Silver has many special features as a commodity. Firstly, it has a huge array of industrial uses. It can be used as electrical components in computers and household appliances such as washing machines. It also has less conventional uses, such as in photograph development and in odour control in shoes and clothes. It is also more commonly being used in trace amounts in bandages and is still used in X-rays. Silver also currently enjoys a relatively low cost when compared to other commodities such as oil and gold. This is in stark contrast to the beliefs espoused by many industry experts: silver is one of the best investments a speculator on the commodity market can make.

Silver futures are traded on several commodities exchanges, with India's Multi Commodity Exchange being the largest. The Commodities Exchange (COMEX) and the National Commodity and Derivatives Exchange (NCDEX) - the latter also based in India - are also major centres for silver trading. The commodity ticker code for silver when is SILVER when traded on MCX, SLVPURAHM when traded on NCDEX, and SI when it is traded on COMEX.


Currently, the main business market for silver is the industrial sector, where it is employed in batteries, TVs, and other electrical equipment such as microcircuits. Silver is also favoured for use in colour paper for printers and this helps to offset the reduced use of silver in photograph development as digital photography rises to prominence. The jewellery market is another major contributor to the silver trade, as is the silverware market.

Silver has additional qualities that make it attractive to commodity brokers and other traders of commodities. Its relationship to gold is one of the most salient qualities. Gold and silver generally trade within a range of 20-70 ounces of silver to the price of gold. This ratio fluctuates constantly, and allows those involved in silver trading who are monitoring the market to sell their silver and buy gold or vice versa as the prices dictate. Silver can also possibly act as a substitute for gold and hence act an alternative currency, as although both metals possess similar qualities silver is markedly cheaper on the market.

Mexico is currently the main silver producer in the silver market, producing around 15% of the global supply. Peru, Australia and China are also prolific silver producers. It must be noted however that only around 25% of silver produced comes from silver mines, the rest is made from scrap recycling or the refining of other metals.


Factors that influence the silver spot price and price of silver futures include increased demand for industrial applications and the hardship in founding new silver mines, both of which will raise the price of silver options. Silver spot prices can also be affected by companies stockpiling silver, which they are known to do when prices begin to rise as it is a crucial component of many electronic devices. This will drive demand up and increase the spot price also. The rising and falling of the value of the dollar can also interfere with daily silver prices and silver futures prices in America, as most silver is imported from outside of the United States.


FEBRUARY 7, 2009

Commodities: Silver - Prices Going Up

The current economic crisis has people faltering a lot concerning their money and what to do with it, and the usual havens of silver and gold during times like these haven't been acting in the usual predictable manner, but prices of silver and gold are starting to rise, and that should go on for some time. Most of that has been because of the forced liquidation period where companies sold off their silver and gold positions, among other commodities, in order to get their hands on much needed cash. That in turn caused the U.S. dollar to remain inordinately high even though the underlying fundamentals

pointed to it being weaker.

When it comes to commodities, don't get fooled or confused about the current economic situation where all the various market forces seem to be makeing it hard for people to make sound decisions on where to put their money.

Gold and silver will start to perform strongly again as the forced liquidation period unwinds, and investing the gold and silver will be very profitable going forward. The one thing about silver prices that are nice is they are lower than gold, and so investing in silver has a much higher probability of moving much more up in percentages than gold. Of course it depends on what your investment risk comfort zone is, as if you're just trying to hold on to your money, gold during these times should be the preferred investment, even if silver futures and prices have a better chance of going higher.

To me there's no doubt silver prices across the numerous ways of investing in silver will move upward significantly in 2009, no matter what the demand for its use as a raw material. Safety is one of the key factors in investing this year, and commodity prices like in relationship to silver and gold prices will be the safest and probably best investments as well in the near term.

What are some of the many ways you can invest in silver in 2009 and beyond? There's of course silver futures, silver bar, silver eagle coins, silver dollars, silver coins in general and silver bullion, among many others.

The key now is to understand fear will drive the market for some time, and gold and silver prices will rise as a result of that fear, whether its deserved and accurate or not. We don't have to figure that out, we just need to know that silver prices will rise going forward, and keep that in mind as make our silver investment.

Some people are even concerned about their safety, with the idea that things could fall apart. To that end their not only buying silver and gold coins, but silver and gold bullion as well.

So silver as an investment, no matter what form you want to buy silver in, will do well for those interested in buying commodities, and will be among those commodities prices going up. Silver, along with gold will be safe, and give a return as well; something not many other investments will be able to say in 2009, and probably even 2010.

Many people are asking which way silver prices are going, and the answer is up, up, and up. The reason why, as mentioned earlier, is the safety factor and the winding down of forced liquidation by companies usually buying gold and silver in large quantities and futures at times like these.

Keep looking at the silver prices going forward, and don't wait too long before participating in buying up silver futures, coins, bullion or bars.

Silver prices and futures are going to continue going up in 2009, be in the silver market to enjoy that upward movement.