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Data Shows Investors Fearful of Paper Precious Metals

A quick glance at the data might not reveal a trend we’ve noticed in the silver market. However, careful analysis will show that investors have become fearful of investing in paper precious metals. When carefully examining all data available as a whole, trends appear that weren’t noticeable before.

After the financial crisis in 2007, the data will reveal that Silver ETF‘s inventories increased while silver coin and silver bar demand increased. Silver ETF’s inventories increased over 100 million ounces in just two years. In 2008, physical silver coin and physical silver bar demand increased over 130 million ounces in a single year. In 2009, with the price of silver at $14.67, Silver ETF inventories again increased.

Then in 2010, the price of silver went to just over $20. For this year, the Silver ETF inventories fell by 27.4 million ounces. The demand for silver again increased in 2010. Fast forward to 2011 and the price of silver skyrocketed to almost $50 an ounce. For 2011, Silver ETF inventories showed a 24 million ounce decline while physical silver bar and physical silver coin demand increased a whopping 210 million ounces. There was a slight increase in 2012 of 55 million ounces in the Silver ETF inventories. However, the next two years there wasn’t much change at all. The inventories increased a mere 1.6 million ounces and 1.4 million ounces in 2013 and 2014 respectively.

When you look at silver bar and silver coin demand in the same years, demand was up 243 million ounces in 2013 and 196 million ounces in 2014. Some might argue that there was a lack of investment demand and lower pricing, but physical silver was not affected in this way. For four years, the Silver ETF inventories and demand for silver bars and coins were pretty close. The next four years saw a 92% decline in Silver ETF’s with a 70% increase in demand for physical silver. 2011–2014 shows an increase of 788 million ounces of silver coin and silver bar demand while the increase in Silver ETF’s was only 34 million ounces. The data is pretty clear. Investors prefer buying physical silver rather than investing in Silver ETF’s.

The data reveals investors have chosen to stockpile physical silver. Having the precious metal is winning by leaps and bounds while having a promise of silver in the future just isn’t cutting it anymore. The trend of physical silver demand increasing shows no sign of slowing down. With the current volatility in the markets, it’s hard for investors to put their faith into paper investments. It’s totally understandable.

A physical asset provides a level of safety that paper investments cannot provide. Physical silver has an intrinsic value and due to the value that silver has, there’s little to no chance that a physical silver investment could ever be worth nothing. Paper investments carry a lot more risk. There’s risk that the silver would never materialize. While financial institutions have claimed that the silver exists, banks have been caught without the necessary silver on hand. If a financial crisis were to happen, there’s no guarantee the financial institution will have all of the investors’ silver. ETF’s also come with lower capital gains.

Well known precious metals firms like Capital Gold Group recommend investing in physical silver. It reduces risk because the investor has the hard asset. The investor does not have to trust that the silver exists. The benefits of investing in physical silver are clear. Reduce your risk with a Precious Metals IRA or Silver IRA that contains physical silver.

To invest in your own physical silver, contact Capital Gold Group today at 1(800)510-9594!


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On January 8, 1835, President Andrew Jackson proclaimed that the last installment of our national debt had been paid, and that the United States was debt free! This was the only time in American history that the U.S. had no debt.

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