EFTs are large investors in silver. Some funds own about 50% or more of the annual production of silver. So if you are trading silver, a focus on what the EFTs will do is essential. Any loss of interest by retail investors and, consequently, their drop in investments in EFTs, or redemptions from silver EFTs, can send silver prices hurtling down. On the other hand, when retail investors remain interested in silver, prices would go significantly higher.
Silver usually picks up after a lag when a gold rally starts. The ratio of gold to silver prices is also used to assess if silver will rise. Silver's
investment demand has been driving up prices and absorbing the steep fall in demand for photography. The key factor that can drive silver prices up or down is demand from exchange traded funds and investors. Supply of silver from scrap and sales is flat, and the mines seem to have produced only 40% more than their production levels a decade ago.
Silver is found in mines, as a by-product of gold mining, and is also found with zinc. The cost of mining silver is around $5/ oz. It is also a by-product from processing and smelting copper, gold, and lead-zinc ores.
Silver is used for coinage, silver jewellery, batteries , bearings, solar energy, water purification, medical appliations, and electronics. Since silver has both industrial and investment uses, it is not necessary that it will lose value if gold reverses.
The top ten silver producing countries include peru, Mexico and China. Australia, bolivia, Russia, Chile and the US produce about half of the production Peru, Mexico and China.
Most recent silver discoveries have been associated with gold occurrences; however, base-metal occurences that contain silver as aby-product will continue to account for a significant share of future reserves and resources.
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