Something is Brewing in the Silver Market

While the silver price has moved less than gold this year, there has been a decisive move by investors.

You and I don’t buy paper silver products, but this is where much of the mainstream first goes when wanting exposure to precious metals.

Check out the jump in net purchases of SLV (iShares Silver Trust) last month:

Net purchases by SLV holders surged to two-year highs last month. And July is on track to be even higher, as that data is only through the 16^th.

Further, as Mike Maloney pointed out last week, the total amount of transparent silver holdings… the number of physical silver ounces held by mutual funds and ETFs, required by law to be reported publicly… hit a new all-time high last week.

The amount of silver holdings globally has surged to new highs in just the past few weeks.

The chart doesn’t show it, but it’s now 130% higher than in April 2011, when the price hit $48/ounce.

We have all this movement in the silver market, and yet…

• No central bank stockpiles silver
• No one talks about silver on CNBC
• Sentiment for silver remains near record lows
• Purchases of physical metal remain below average.

It’s becoming clear that investment in silver has woken up in a big way — and that more is ahead once more investors begin to notice this market.

As we pointed out the other day, we don’t know if this is the breakout or not, but this level of activity suggests these investors see an opportunity.

As you know, silver remains a deeply undervalued asset. One we believe strongly is inevitably headed higher. A big group of investors is jumping in now.

We are, too.