The Silver Institute
With Silvers meteoric rise in 2020 we decided to kick off 2021 with a blog Q&A all about Silver with Michael DiRienzo, Executive Director at The Silver Institute.
1. Michael, can you tell us about yourself and we will get into The Silver Institute next?
Sure, I was raised in Southern California and moved to Washington, DC to work for my local U.S. Congressman after I graduated from college. I fell in love with DC within weeks. I then became a lobbyist for a member company of the Toyota Group and several years later came to the Silver Institute. I am an avid movie buff and active tennis player and fan.
2. Can you give us some background on the beginnings of The Silver Institute?
Next year is the 50th Anniversary of the founding of the Silver Institute. The Institute was established with eleven member companies on February 11, 1971, at an organizational meeting in New York City. Originally formed as a technical and educational resource for members and the general public, the Institute has blossomed into an essential clearinghouse for all things silver, a market development association to create greater demand for silver, and a reliable reference for accurate information on the global silver market.
3. What is The Silver Institute doing today to help promote silver to a younger audience consumed by all things digital?
We market all aspects of the silver marketplace to all age groups. Some of our programs include investment, and others are focused on growing demand globally. Our jewelry promotion arm, the Silver Promotion Service (SPS) www.savorsilver.com, based in New York City, focuses on stimulating demand and enhancing the image of sterling silver jewelry in major international markets. It surveys and targets retailers to encourage jewelry consumption to millennials, among other groups. In 2021 we will launch a series of podcasts, which are popular among all age groups, but especially a younger audience.
4. The members of The Silver Institute are mostly mining and refining companies, are there plans to expand that to other areas of interest in Silver?
You need to be in the silver space to be a member company or support our work. We also count bullion suppliers, manufacturers of silver products and wholesalers of silver investment products as part of our membership and supporters. We welcome all interested parties in the silver market to explore membership. I don’t envision us expanding into individual memberships.
5. Silver production is down this year but investment in Silver is up 10% in the first half of this year, what are the miners doing to pull back production to healthier levels to meet future demand?
Silver mine production is expected to fall by 6.3 percent in 2020. This reflects COVID-19 lockdowns implemented by several major silver producers during the first half of the year, which required mines to temporarily halt production. This led to lower output from Mexico, Peru and China. The last countrywide restrictions on mining were lifted at the end of May and most mines have now returned to full production rates. However, there is a continued risk of localized outbreaks of the virus, which may impact output from individual operations in the future.
6. Silver always plays second fiddle to Gold but when Silver takes off it flies right past Gold in terms of percentage gains, why do you think Silver plays the laggard to Gold?
I think silver holds its own, as evidenced this year. It outperformed in the precious metals complex. Silver is a safe-haven asset like gold, but also an industrial metal used in products including automobiles, solar panels, and almost all electronics. It is vital to the Internet of Things, 5G development and many analysts say its dual role and its greater volatility mean it could fare better than gold as economic growth picks up, and as U.S. President-elect Joe Biden’s push into clean energy prompts more usage.
7. There is a severe shortage of silver coins being produced by Mints globally, premiums were at their highest during Covid but have remained high due to demand, what changes can be made from the industry perspective to ensure production meets demand going forward?
This is a supply issue from the beginning of the production process, Taking the US Mint, for example, they contract with other providers to produce the planchets, or blanks, that are used for the American Eagle Bullion Coin. Even with these providers working around the clock, when demand spikes, it’s difficult to meet the demand. We’ve met with the mint and urged them to expand their providers, but it becomes difficult due to their exact standards, which cannot be adjusted. Ideally, we want Mints to have a better plan for anticipating growing demand as this is not the first time this has occurred.
8. Do you see institutional money such as pension funds coming into the physical sector as part of a portfolio balancing play?
It already is. Retail and institutional inflows into silver ETPs were impressive this year. Traditionally ETP investors were primarily retail investors, but this year institutional investors came in leading to silver-backed ETPs posting record highs in 2020.
9. What advise would you give someone looking to start investing in Silver?
Figure out which option is best for you. Do you want to buy coins or bars? What about storage? Exchange-traded products? Go to this page on our website for more information on investing in silver – https://www.silverinstitute.org/silver-price-investment.
10. For anyone that wants to connect with The Silver Institute and of course your good-self where can they find you online?
Feel free to visit www.silverinstitute.org and please sign up for our free publications, such as Silver News and our press releases. You can also download our entire library of World Silver Survey’s, the most authoritative and reliable source on the silver market. We are on Twitter @silverinstitute and please follow us. I also have a LinkedIn profile and soon we will build at a page for the Silver Institute on that platform.