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The Silver Institute, working with Metals Focus, defines a deficit as when mine production plus recycling falls short of total annual demand. By that measure, we’ve seen record deficits in recent years — on the order of 200 to 250 million ounces annually from 2021 through 2024. They attribute the shortfall to drawdowns from above-ground inventories — coins, bars, LBMA vaults, and COMEX stocks. It’s a straightforward message: new supply isn’t keeping pace with demand, so we’re eating into existing stockpiles.

CPM Group looks at the same market through a different lens. They count those above-ground stocks as part of total supply, along with less visible flows like melted silverware, industrial scrap, and private holdings. In their framework, as long as those sources can be tapped, the market is balanced — there’s no “true” deficit. What the Silver Institute calls a shortage, CPM calls disinvestment.

Who’s right? In a way, both are. The Silver Institute measures current mine and recycling output against current demand — the metric most investors are familiar with. CPM takes a system-wide view, including all above-ground reserves, which delays the point at which the market tips into an actual shortage.

From an investor’s standpoint, here’s the takeaway: if the Silver Institute is right, we’re drawing down the pantry every year. If CPM is right, the pantry is still stocked — but eventually, those shelves will be bare. When that happens, we’ll see the kind of price moves that only occur when supply can’t meet demand. That’s the moment to prepare for — and the reason I continue to see silver as one of the most compelling opportunities in the resource space.

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