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The Silver Supply and 761 Million Ounces

Though there are 761,000,000 ounces of silver mined annually, accounting for more than three quarters of a billion dollars, the number is relatively small.

761,000,000 ounces of silver represents the ounces of newly mined silver worldwide in 2011. Though 761,000,000 can be an imposing sum in many circumstances, doing the math shows it’s no big deal to the silver supply.

The metal is treasured worldwide as a store of value and it possesses hundreds of industrial uses. Each person’s share of this newly discovered ore would come to just one tenth troy ounce per person, or roughly a nickel and a dime sized round of silver.

Stated another way, 2011 silver production averages out to a little over $3 per person. Saying silver is a thin market compared to gold is a vast understatement, as the current value for 2011 mining production comes to $22.5 billion.

The rush to precious metals in recent years combined with the surge in demand has led to much higher prices. Many analysts see silver benefitting more from these current trends than gold, which already holds a fairly high market price point. Investors already choose to purchase silver ounce coins in place of an ounce of gold in order to reap a higher yield on the multiple more coins one can attain for the same cost as one ounce of gold.

Investors who purchased gold at $400 to $750 per troy ounce are now priced out of that market at current levels. Often, newcomers to the market are purchasing precious metals on a modest budget, with silver being much better suited to these circumstances than gold.

The supply of new silver compared with supplies of new gold is minimal at best. Worldwide, there are less than 30 mines exclusively dedicated to silver. Most of the silver supply as is consists of the byproduct of zinc and copper mining. Many of the very large silver deposits, including the Comstock Lode and the first generation mines of Mexico and South America are long depleted and gone. Silver deposits are now measured in a few ounces or grams pert on of rock and dirt. The main factor that motivates retail demand for silver, economic instability, also serves to put a damper on new supplies, as demand for copper and zinc declines during such scenarios.

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