Loading ...the prime driver of the silver shortage is the chronic structural deficit. silver (unlike gold) is not only a precious metal, it is also an industrial metal – it gets used and used up. for decades the world has been using more than was produced, slowly chipping away at the huge inventory that had been built up (strategic reserve, hoarding, coinage, tableware and jewelry etc.) that inventory has been largely depleted. thus the situation on the supply side.
the demand side? hoarding and jewelry demand will decrease with rising prices (economics 101). industrial usage? not so much. silver is the best conductor of both heat and electricity. it has excellent light reflecting ability and interesting musical and medical uses. in these usages, the cost of the silver is a very small fraction of the cost of production. a $500 computer may have a gram of silver in its chips and printed circuits. if the cost of silver doubles (ten – touples?) it will not greatly raise the cost of the computer. other industrial uses have a similar dynamic. civilian industrial demand will be relatively price – inflexible.
military – industrial (a tomahawk missile has 30 toz of silver, mostly in its batteries.) price seldom bothers military procurement.
yes, rising prices will restrain demand, but not as much as with other products.