Stock Market Downturn Leads To Increased Silver Demand?

There are a few speculations as to why silver bullion demand is so high at the moment…

Bullion.Directory precious metals guest post 15 January, 2016
By Nick Adamo
President at Bullion Shark LLC

First off, silver is extremely cheap. It has been years since a mere $14 could buy an ounce of silver. In 2011, $14 couldn’t even buy a third of an ounce. Now that silver has dropped over 70% over the past 5 years or so, it has become an affordable investment that has the potential to show large returns if the market turns around.

Even if the market goes back to the status quo from 2011, an investor with a cost average of around $16 could triple his or her money.

Secondly, the stock market has been taking huge hits as of late. Day after day, the Global Stock Market is getting pounded without much relief besides the 227.64 point run the Dow had today. The underperformance of the stock market has caused some investors to buy up the precious metals.

And the statistics from the U.S. Mint prove that it may very well be more than just a few investors.

Don’t believe demand for silver bullion is high? Let’s take a look at the largest Mint of silver coins, the United States Mint.

2015 was a record breaking year for the American Silver Eagle. 47 million of these 1 oz silver coins were sold over the course of the year. Sales of the 2016 Silver Eagles went underway on Monday, and the numbers are unbelievable. In the first day of sales, over 2.7 million Silver Eagles were purchased, which is about half of the total sales in all of January of last year and almost 6% of the entire year’s sales.

These numbers are quite impressive. This kind of demand for silver bullion has never been seen and if demand keeps up this like this for the rest of this year, Silver Eagle sales will be higher than ever.

This demand may partially be owed to the fact that 2016 is the 30^th year of issue of the Silver Eagle. Essentially, collectors are placing big orders to get their hands on these 30^th Anniversary 2016 Silver Eagles. However, logic should dictate that the demand that we saw cannot possibly be all from collectors, rather from investors who are buying in bulk.

Prudent investors are buying these coins hand over fist while these prices last. If the demand from the U.S. Mint is not enough to convince someone that demand for silver bullion is astronomical, then no evidence will.

Now may be the time tobuy silver bullion while it is still cheap. Diligent research shows that the fundamentals are strong for the metals in the years to come.

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