gold investment, silver investment

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Size of the Silver Market

How big is the silver market? It should be easy to answer this question, right? After all, the silver market is a market for silver. And we now that about 780,000 tons of silver are in existence above ground (as of 2014). That’s about 25.1 billion ounces. At today’s dollar price (a little above $14 per ounce, as of November 11, 2018), that comes to about $350 billion. It’s a pretty large number, but significantly smaller than in the case of gold (about $7.3 trillion).

However, we are interested in silver as part of the financial market, i.e. private investment and perhaps official reserves. Hence, although jewelry also serves as a store of wealth in many cultures, we subtract it from our calculations. Neither do we include silver for technological applications. Therefore, after these corrections, we estimate the silver market capitalization at about $0.5-1.0 trillion.

But we can also interpret and measure the size of the silver market in terms of its liquidity. According to the LBMA, 218 million ounces of silver worth $3.1 billion were cleared in the London market in September 2018. If we add futures and silver ETFs, the trading volume was even be higher. Hence, silver is heavily traded, although less intensively than gold.

To sum up, the silver market is quite big, which makes it one of the largest and most important financial markets in the modern economy. Given its size and liquidity, silver is clearly a monetary asset, although not as attractive as another reserve currency - gold. The impressive trading volume also explains why annual mining production (and its cost) is not the most important factor in silver’s price formation (its equivalent is cleared during several trading days in the global silver market).

We encourage you to learn more about the silver market – not only how large it is, but also how to successfully use silver as an investment and how to profitably trade it. A great way to start is to sign up for our Gold & Silver Trading Alerts. If you’re not ready to subscribe yet and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!

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