Silver as an investment

PAPER vs. PHYSICAL: The Amazing Amount Of Leverage In The Silver Market

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While many precious metals investors realize the massive amount of paper trading leverage taking place in the gold market, they should see what is going on in the silver market.  In a previous article, I provided data showing that an amazing $9.8 trillion of notional gold paper trading took place on the world’s exchanges in 2016 versus $42 billion in actual physical gold investment.  This was a paper to physical ratio of 233 to 1.

However, the amount of paper trading leverage in the silver market is much higher than that.

But, before I get into the specifics of the paper silver market trading leverage, let’s take a look at the pathetic amount of physical silver investment versus Central Bank asset purchases.  According to the data in the recently released 2017 World Silver Survey, total physical silver investment for 2016 came in at a whopping $4.4 billion.

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