Silver Demand in US Vs India

The United States has a rich history of silver mining and investment. American investors have long had a predilection for physical silver, favouring coins and bars to stash investment cash. On the retail side, many smaller investors like the portability of coins and smaller bars,and the discretion that comes with such investments. More sophisticated investors have sought to leverage silver investing with mining shares and mutual funds and more recently with exchange-traded funds (ETFs).When examining current silver investment in the United States and India, it is important to look at the global picture. Over the course of the last three years, world investment has more than tripled, rising from 61.7 Moz (millions of ounces) in 2007 to 215.6 Moz in 2009.From 2008 to 2009, global silver investment leapt by
a staggering 184%.Perhaps one of the most important developments in the silver investment market in the past 50 years was the advent of precious metals ETFs in 2004. These investment products, which trade like stocks, have served to ‘democratise’ global silver investing by making it convenient for retail investors who might otherwise have eschewed silver investing because of the difficulties of storage, insurance and assaying. That convenience, coupled with a global financial crisis and greater shifts toward portfolio diversification, has pushed the silver
price higher in recent years. Examining ETFs more closely, total holdings in 2009 rose by 132.5 Moz, ending the year at 397.8 Moz. The growth was the product of increased holdings of the three funds that were active at the beginning of 2009, and the launch of new silver ETFs in Australia and United States last year. On the whole, between 2005 and year-end 2009, the silver price increased a staggering 141%.
Turning to global silver coin and medal fabrication, this segment of investment demand grew by a hearty 21% to a new record of 78.7 Moz in 2009, driven by a spike
in retail demand. This increase was led primarily by the United States andWestern
Europe. Looking at the table below, silver coin and medal fabrication increased nearly 60% between 2000 and 2009.