Silver's Mine Supply to Hit New Record This Year, Surplus to be Absorded by investment Demand

Outperformance of silver over gold has sent the gold/silver ratio to around 36/37, the lowest level in almost 3 decades. Geopolitical tensions, natural disasters and subsequent radiation leak in Japan, and ongoing sovereign debt problems in the European periphery have increased demand for safe-haven assets. Meanwhile, rising inflationary pressures resulting from surges in commodity prices and maintenance of expansionary monetary stances by the Fed, the BOE, the BOJ, etc, have raised the need for inflation hedges. Gold is a traditional alternative to fiat currencies and risky assets in such an environment. However, silver has been increasingly appealing in recent years as many investors view it as ‘poor people's gold.

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Silver's Mine Supply to Hit New Record This Year, Surplus to be Absorded by investment Demand