(BullionStreet): India had the largest silver reserves in the world till a decade ago when gold finally overthrown it from both peoples mind and government warehouses.

Country's silver reserves depleted to nearly 25 million ounces now from as high as 87 million ounces a decade ago.

India began to sell silver reserves after prices crashed due to increased silver production as new mines started producing more of the white metal in the 90s.

India's decision was also prompted by moves by major country's to shift to gold standard which released more silver to markets, reducing prices further.

China on the other hand, also sold in excess of 50 million ounces of silver during the last decade and another 35 million ounces on the open market. That puts an approximate two year total of bullion sales for China at 85 million ounces.

However, China retained most of its reserves after stopping selling from last decade and now became the largest silver user who could control prices.

Analysts however said China and India are perfect examples of how countries with very large holdings of silver stock piles cannot maintain high enough levels of sales over an extended period of time to meet production shortfalls. Their stockpiles could soon be exhausted.

They are also raising a sample question as what happens to the price of silver if these large sellers decide to start trading their humongous forex reserves and accumulating silver?

China is moving along that line, said many analysts after the dragon nation stops silver sales against worthless fiat currencies while India continued to sell silver.

The Chinese may very well decide it is better to hang on to what they have left in their stockpile, rather than continue to trade it for increasingly worthless fiat currencies. The Chinese are aware of the fact that silver bullion stockpiles are depleting and prices may go up soon.

Chinese authorities even advertised to encourage people to buy silver after introducing silver bars for investment. They knew that these millions of Chinese silver investors could raise silver prices and they have plenty of them in hand.

The Chinese clearly understand the simple fact that silver is a less-active and lower-volume market than gold, which means that purchases even by individual investors can make an impact on silver prices.

Better said, 100 silvers buyers purchasing the same amount as 100 gold buyers will have a bigger impact on the market. Think how much prices can spike when millions of Chinese investors flood the market with silver purchases. Now, combine that with the global return of industrial silver demand.

China’s silver consumption already accounts for 70% of the global total of industrial use, and its middle class isn’t even close to reaching its spending potential.

Many analysts said China is playing a smart game by creating a price hike for a commodity by accumulating it now, only to sell in the next best available oppoprtunity. China has grown enough to control global silver prices, they added.