What is Gold?
Gold has been a part of history in all parts of life such as religion and a medium of exchange for goods and services, and more importantly as a safe haven.
Over 165,000 metric tonnes of Gold stocks are in existence above ground. Around 60% of today's gold becomes jewellery, where India and China with their expanding economic power are at the forefront of consumption accounting for approximately 65% of consumer demand in 2011. India, Greater China (China, Hong Kong and Taiwan), US and Turkey represented well over half of consumer demand. On June 25, 2014, Chairman Xu Luode of the Shanghai Gold Exchange (SGE), said that China's gold demand reached 2,000 tonnes in 2013 (Click here to view more China Gold/Silver data by Koos Jansen of Bullion Star Blogs).
A key change in the gold industry is that after 18 years as net sellers, collectively central banks are now effectively net buyers, causing not only a significant decrease in supply but a corresponding, simultaneous increase in demand.
With different sets of socio-economic and cultural incentives driving each market, as well as rapid demographic changes in many of the key consuming nations will also likely produce new patterns of demand in the foreseeable future.
In creating supply, gold mining companies operate on every continent of the globe. This broad geographical dispersal means that issues, political or otherwise, in any single region are unlikely to impact the supply of gold. Beyond mine production, recycling accounts for around a third of all current supply.
Wit the introduction of the newly created Pan Asia Gold Exchange (PAGE) in China, brings a new source of investment into the Gold & Silver bullion markets. Chinese citizens are able to purchase physical Gold or futures contracts through an Renminbi (RMB) account with a bank or broker. Other Asian precious metal exchanges include the Shanghai Gold Exchange & Singapore Exchange of which both exchanges offer kilobar contracts via physical settlement.
Source: World Gold Council, China Briefing, Shanghai Gold Exchange, Singapore Exchange
What is Silver?
Silver is a dynamic metal, both for investment and industrial consumption. Investment demand is sourced from individual and institutional investors into physical or paper based silver transactions including coins and bars, Silver ETFs and other Silver focused funds. Industrial demand includes applications in electronics, medicine, jewelry, silverware, solar and water applications and most recently for possible application in cancer treatment.
In 2010, global Silver production reached 736 million ounces and 215 million ounces of Silver from recycled scrap. In total, brings a ratio of nine ounces of Silver to one ounce of Gold. In 2013, global Silver production reached 820 million ounces and 192 million ounces from recycled scrap.
Silver Institute Silver News: US Mint Runs Out of 2013 American Silver Eagle Coins.Click here to read
Silver Institute Video Series: What is Silver?...Click here to view video
Source: Silver Institute, SilverStrategies.com