Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing Access Your Profit Alerts

Silver Set to Double, According to… Apple?

We all have our reasons for following Apple. I track it because this tech behemoth is a massive global consumer of metals – base, rare earth, and precious.

And right now, Apple is giving us some surprising indications that the demand for silver is much higher than its current price would have us believe.

Actually, the first "sign" came to us back in January when Apple had to delay new 27-inch iMac deliveries by up to four weeks.

Of course, the company never specified exactly what was causing the delay… but the rumors flew.

The most intriguing rumors centered on a possible shortage of industrial silver in China.

Regardless, the Apple "indicator" is just one reason silver could double over the next 12 months.

There are five other compelling clues that indicate silver's price has temporarily decoupled from what the demand data dictate…

Bullish Silver Demand Indicator No. 1

Huge Silver Premiums

We all know about the drubbing that silver took in mid-April. While silver dropped from $32 in February to $18.50 by mid-June, something amazing happened.

Buyers stepped up, and supply became so scarce that premiums nearly quintupled from 8% to 37% above spot prices.

And that's if you could even get your hands on it.

Essentially, almost no one was selling. Yet a lot of buyers recognized that silver was "on sale" and decided to stock up.

But no one saw this next one coming…

Bullish Silver Demand Indicator No. 2

U.S. Mint Sales Record

In the first three months of 2013, the U.S. Mint sold more than 15 million American Silver Eagle bullion coins. That's the first time ever the Mint has sold this many coins so early in the year, setting a record in the 27-year history of the series.

Then in early November, the U.S. Mint reported that its year-to-date silver coin sales had reached a new record. The mint had sold 40.175 million ounces, surpassing the previous annual record set in 2011 with sales of 39.87 million ounces.

Demand has been healthy right through the year, with January boasting 7.5 million ounces, 3 million in October, and 1 million in November.

And there's still the month of December to count, but the last allocation for buyers was December 9th. New orders can only be placed as of mid-January.

But coin buyers aren't the only ones who are stocking up.

Join the conversation. Click here to jump to comments…

About the Author

Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.

Read full bio

  1. edward | December 10, 2013

    was good comments on silver, may come good again in new year,

  2. Martin | December 10, 2013

    No way is silver going back up to where it came from. The stuff's as common as scrap metal. The buyers are riding for a fall when they hit the exits and the institutions sensibly aren't grabbing any silver either.

    • Zach | December 10, 2013

      Include some information to back that up, or stop being such a fool and close your mouth.

  3. David | December 10, 2013

    Central banks + TBTF banks + federal reserve + federal government will suppress prices on gold and silver a long as they can. They can't afford prices to peak like in 2011 and have that compete with their fiat currencies, equities, and financial "products". HFT manipulation is much more sophisticated than in 2011. They will hold the prices down until they can't any longer. The next time spot prices rise substantially this will be a bellwether of major coming social, political, and economic upheavals.

    Silver is more common than some think it is, but not as common as Martin seems to think. I don't know what sources he draws on to make a comment like "The stuff's as common as scrap metal". That is far from true. I've communicated with far too many of the people who are most knowledgeable about supply…the ones who have the credentials, write the articles, and are sought after for interviews. I also have a degree in Geology.

    • Wolfgang Rech | December 15, 2013

      Let's not forget that scrap metal is and always will be…used and reused. The very name "scrap" implies continual usage.

      Silver, on the other hand, has the distinct feature of NOT being able to be reused. Once it has served its purpose in commercial production, it's gone….forever.

      It's best to view silver in a comparison to a match. Use it to light a cigar. Fine and dandy. Once it served its purpose, it can never be used again. That's silver. Don't count on continual and excessive supply, it simply won't happen.

  4. AK | December 10, 2013

    @ Martin, you obviously didn't read the article. And as far as Silver being as common as scrap metal, you may want to verify your sources. Only 9 to 10 ounces for Silver are mined for every ounce of Gold but since most of the Silver is used for by industry only 3 times as much Silver is available than Gold for investment purposes. And with so little Silver available for investments, Gold is over 60 times more expensive than Gold, which is a ratio that can't last.
    Furthermore, Governments used to have billions of ounces of Silver stock piles that have all been used by various industries and at these prices only very little Silver is recycled. There are no more known Silver stock-piles so whatever is pulled out of the ground is consumed by industry and investors.
    You better get your facts straight because Silver is likely one of the best investment opportunities of our lifetime over the coming years.

  5. fallingman | December 10, 2013

    "Can the silver price continue to languish in the face of such strong physical demand?"

    Yes. Most of those supply/demand fundamentals have been in place for some time.

    Supply/demand fundamentals don't rule the futures market in silver. JPM does. That will change only when the CFTC actually does its job…fat chance…or someone calls JPM's bluff and forces them to deliver against that massive short position, which they can't possibly do.

    Don't hold your breath.

    We can talk all we want about fundamentals and then scratch our heads as to why they haven't mattered or we can call a criminal a criminal and raise hell till the miscreants have been fully exposed as criminals.

  6. Rogers Varner | December 10, 2013

    May I differ with the cost of production of silver at an average of $20~. While there may be a few high cost producers at that level, the majority are in the $5 to $12 range, with an average around $8. Silver is also unique in that 90% of the world's silver comes from mines producing other metals. Silver is mostly a by-product, and its production depends largely on how eager companies are to mine other metals. Silver at +$20 thus has a huge risk, which is toward cost. One needs only look at the trading range from 1980 to 2000, when silver touched $3.50, and hovered around $5 for years. That was app cost of production during those 2 decades.

    • David | December 10, 2013


      Before you continue saying silver's cost of production is around $8 you need to read this article:

    • SRSrocco | December 10, 2013

      Rogers Varner,

      Actually, according to the 2013 World Silver Survey, By-Product silver metal production was 70% globally not 90%. Furthermore, the top 12 Primary silver miners average adjusted break-even Q3 2013 is $21.50 an ounce.

      For some very odd reason, Cash Costs are still being thrown around as "Real Costs." Cash costs are a bogus metric that is not even GAAP – Generally Accepted Accounting Principle.

      Cash costs are low because the miner deducts all his by-product revenue from the equation. So the higher the by-product revenue, the lower the cash cost. However, it does nothing to determine the profitability of the company.

      For example, Hecla had a cash cost of $7.40 an ounce Q3 2013, but it still lost $8.4 million — even after cost cutting measures.

      There's a lot a BS out there, and it ain't good for you.

      SRSrocco Report

  7. SRSrocco | December 10, 2013

    David….LOL… I thought I beat you to it…LOL

  8. James Parker | December 11, 2013

    I agree with you that silver seems like a safer bet compared to gold due to the consumption nature. I would believe that silver would continue its bullish uptrend for the next couple of years until new supply source can be identified.

  9. Tom | December 12, 2013

    Silver can double. Sure. There is a lot of demand, both industrial and as a precious metal. Okay. It just seems that predictions like this are kind of shady. Can the production of any one company cause a doubling of silver prices? I don;t think so. Of course other things are mentioned, and COMBINED they can conspire to double the price. Then, this prediction will be trotted out as a winner when it was just a newsworthy headline due to the name "APPLE" and it really means nothing since Apple alone didn't, or couldn't, accomplish what all of these things together might.

  10. Wolfgang Rech | December 15, 2013

    Nice article, Peter. Should open the eyes of many.

    However, I would very cautious regarding ETF's. As an investment vehicle, one could wind up being wrong….even if they are right!

    I'm not implying that you recommend ETFs. Just advising readers that if they wish to hold precious metals, then hold the real thing, physical.

    I view ETFs as a vehicle for the diversion of investment flows from the the actual metal to an essential worthless piece of paper, similar to fiat currency. In fact, the ETFs can, are are, being used for the manipulation of physical prices on the exchanges. For one thing, their "paper" can be issued and delivered in lieu of the actual metal (try to make a bracelet, provide antibacterial properties, or produce any of today's electronic products with an ETF share). This takes the pressure off the principle of supply and demand in the precious markets.

    If the ETFs were to back every share they issue, with physical gold or silver, then I would place more faith and credence in such instruments. And as we all know, yet refuse to acknowledge in our hearts and minds, this is simply not the case. They (ETFs) are under no obligation to back their shares fully with physical. Hence, once the shortages in gold and silver become obvious, we will see a divergence between the prices of physical metals and their paper counter part.

    To put this in a clearer and more simplistic manner, think back to Coca Cola's slogan: "It's the Real Thing" Well, just remember this: A share of KO will never satisfy your thirst as well as a bottle of the the "Real Thing."

Leave a Reply

Your email address will not be published. Required fields are marked *

Some HTML is OK