The Silver Institute commissioned a new study by Precious Metals Insight to assess the complexity of above-ground silver stocks and the price of the precious metal.

“Silver’s scarcity and value means there has always been a powerful incentive to safe keep and hoard the metal in its purer and weightier forms, such as coins, bars, and jewelry,” says Mike Dirienzo, president and chief executive officer of The Silver Institute. “For other fabricated products, the silver content may also have some inherent value related to the precious metal content. These various forms of silver constitute the Above-Ground stocks of silver.”

According to Dirienzo, some key conclusions found in the 33-page report note:
* There is no correlation between the overall level of above-ground stocks and the silver price;
* Annual changes in total Above-ground stocks and the silver price are likewise uncorrelated;
* In contrast, movements in bullion stocks have an impact on the silver price and vice versa;
* The vast majority of above-ground stocks are “immobile,” with only small net additions to or subtractions from stocks on an annual basis;
* Increases in bullion stocks are often positively correlated with the price, as investment demand grows when silver prices increase, which stimulates still higher prices;
* Multi-year drawdowns in bullion stocks have tended to occur in bear markets for silver and have exacerbated these. However, these drawdowns have typically set silver up for more substantial rallies as investors have rebuilt their bullion holdings; and
* Above-ground stocks of fabricated products are less price-sensitive than bullion. Only specific subsets of silver fabrication demand show a sensitivity to the price, such as jewelry and silverware.

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