Silver Supply Is Sufficient, Experts Assert

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"In 2010, total demand for silver rose 12% to a 10-year high."

CNTV

Futures investors are also paying close attention to the fluctuating price of silver. Some worry that supplies will run short. But experts say that's just rumor designed to push prices higher.

General Manager of Futures Investment Company Wei Dong has gotten used to the soaring price of silver—the message was clear in all of the data that the price was heading one way.

Dong said, "The open interest in silver is increasing, with new capital being injected. . .in many cases, silver price hikes are mostly caused by the selling of investors who planned to trade short."

Some insiders are paying close attention to the supply of silver. In 2010, total demand for silver rose 12% to a 10-year high after the scope of silver appliances broadened from traditional industries to new energy areas, like solar energy. Some are nervous that the increasing consumption of silver might cause a shortage in supply. Experts disagree.

Dr. Ma Guangyuan, of the Chinese Academy of Social Sciences said, "Those rumors are created based on fear, not scientific data."

Experts say those who believe silver will be in short supply neglect that the market supply will be replenished.

Jia Mingxing, vice president of China Nonferrous Metals Industry said, "Based on the current output and reserves of silver, the production can last at least 10 years."

Experts also say investors don't need to worry about silver supply, as there is a special feature about silver exploration—it usually comes along with the extraction of other nonferrous metals—which means as long as other metals are under exploration, there will be silver supply.

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