Another major catalyst for silver is about to surface – goldsilver. com
There are lots of reasons silver is poised to rip higher over the next few years. Currency converter aud to usd Here’s another one, and it’s a new development that’s flying under the radar of most investors…
Indian citizens buy a LOT of gold.
Convert us dollars to pounds sterling Macquarie bank estimates that 78% of India’s household savings are held in gold, more than any other economy in the world. Usd canadian exchange rate Right or wrong, this much savings in gold creates a drag on growth, because the available funds for bank lending decrease.
So as you probably know, the Indian government has been trying for years to curtail demand. Swiss market index futures Just since I’ve been a precious metals analyst, there have been three separate gold monetization schemes offered by government officials. Euro to usd conversion ” Deposit your gold in the bank and we’ll pay you interest!” goes the offer.
The first ones didn’t really work, partly because the rate of interest offered was too low. Dollar pound conversion rate But the Indian government didn’t give up, and their recent efforts have started to make a dent in gold demand. Gender definition sociology Not only has the most recent monetization scheme been more effective (due in part to higher interest rates), but the government’s demonetization of 500 and 1,000 rupee notes last November has had an impact, too.
Beginning in 2013, silver jewelry demand in India has skyrocketed. Taux de change euro dollar australien It’s more than tripled in three short years (2016 data is not yet available). Venezuela money to us dollars And in the past 10 years it’s up over 600%.
As the tariffs and taxes and tricks and teases from the government have had a deeper impact, Indian citizens have increasingly turned to silver, which has almost none of the government interferences that gold does.
Did you know that India was the world’s #1 buyer of silver long before they were the world’s #1 gold buyer? They bought so much silver, in fact, that in the early 1900s the government ran into the same fiscal problems that it has today with gold.
The fall in silver demand was attributed to not just the tax increases, but also due to—and here’s our point for today— a substitution of gold for silver in people’s savings, because gold became more affordable on a relative basis.
Silver imports continued falling and gold imports continued rising until India eventually became the world’s largest gold consumer, a title they held for almost 100 years.
So we have historical precedence that not only have Indians been huge buyers of silver, but have willingly and overwhelmingly turned to another precious metal when one got too expensive or difficult to buy. Asian stock market futures It is certainly no stretch to think that they could do it again, and as the chart above shows, the process of switching to silver may already be underway.
Let’s be conservative and estimate that Indians shift just 10% of the money they would normally invest in gold and instead buy silver. Binary to english translator Look at what would happen to worldwide silver demand.
You can easily see that just a 10% switch from gold to silver inside India would result in a massive increase in global demand. Hex editor windows 10 Overall demand would grow an incredible 65% in that scenario.
The bottom line is, if Indians begin to earnestly substitute silver for gold, we can expect a major silver supply crunch and a subsequent massive increase in its price.
Keep in mind that the investment community is unaware of this possibility. Binary music A development of this nature would catch most investors completely off guard—and spark a run on silver in addition to whatever else may be occurring at the time. 1 usd to krw It won’t happen overnight, but if this trend gains some headline-grabbing traction, look out… prices will catch fire, and the supply deficit would last for years since it couldn’t be easily corrected.