The iShares Silver Trust (NYSEArca:SLV) and ETFS Physical Silver Shares (NYSEArca:SIVR) are tumbling as both of the silver exchange traded products are lower by more than 6% over the past week. However, an important catalyst could come into play that could lift the white metal in the second half of this year.
Declining silver production could crimp supplies going forward, in turn lifting prices.
“2016 was the first year in more than a decade wherein the primary silver production (coming from mines either as a main product or a by-product credit) decreased. After seeing a total silver production of approximately 668 million ounces in 2007 increasing to 891 million ounces in 2015, we saw a (first) decrease to 886 million ounces in 2016,” reports ZeroHedge.
Some metals market observer see silver supply falling coupled with rising prices.
“Silver supply is expected to fall this year, but it won’t fall as hard as demand, according to a new report by a leading precious metals consultancy,” reports BullionVault. “This will widen the metal’s “major surplus” say London-based analysts Metals Focus. Yet it expects silver prices will rise for a second year running thanks to strong buying by institutional investors.”