Many gold investors deride silver as the "poor man's gold" because of its low relative price to gold. Additionally they do not just like the fact that it because it's used mainly as an industrial metal it can be negatively affected by a cyclical downturn in the economy. This is opposite of gold that is viewed almost entirely as a precious metal. Many years ago, the silver market was so oversupplied because there had been huge artificial inventories of silver. This was because the US took currency (coins) out of circulation due to its physical silver content material. Because of this artificial situation, massive surpluses hung over the marketplace until these excess inventories had been depleted. This led to silver prices crashing as low as $2 and then traded about $5 for years. Because silver had so decoupled from the price of gold throughout this period, it began to become thought of as just another industrial metal and not a precious metal.
There are nonetheless skeptics who believe of silver as just another industrial metal. Nevertheless following a 600% rise in price from $5 to $30 since 2003, it has begun once more to become viewed as a precious metal. I believe that silver has only completed about fifty percent of that process. As this transformation continues there will probably be extra substantial moves higher in price. That will attract more investors to silver again until it once again retains its true status as a precious metal. Gold Coins, Silver Coins, Rare Coins Learn More >> http://www.silverdollar.cc/
1) The amount of silver consumed annually and purchased for investment exceeds currently exceeds total annual mining output and has for years. Sellers prepared to sell from existing inventories have filled that gap and as prices rise. As time passes this may naturally push prices significantly greater until this fundamental imbalance reaches a true equilibrium price exactly where supply is closer to demand.
2) Each industrial and investment demand for silver is expanding in excess of the annual increase in mining production development. The available inventory is low and can get even tighter over time. These two factors will result in a continued tighter supply-demand scenario going forward.
3) The lower price of silver at $32 appeals more broadly to small investors relative to the more expensive gold at $1705, particularly if gold prices continue to rise.
4) Most silver is not found in mining websites in any significant concentrated type. It's generally chemically bound to other metals; much of it's actually the byproduct of mining for lead, copper, and so on. In the last few decades this produced it less attractive from a profitability standpoint to invest in pure silver mine. Now prices have lastly recovered sufficient to create new tasks feasible once more. So there is new investment in the sector however it is really a lengthy multi-year process to bring on substantial new production.
5) The last time silver was discovered in massive concentrations or veins that significantly affected the amount available and consequently significantly lowered prices was in the Comstock Lode in Nevada in the late 1800's. The Comstock Lode produced a lot of ore that was very pure with concentrations of 25-50% silver. Silver mines today have a lot lower concentrations, generally usually less than two ounces per ton of refined ore.
6) Silver will be the most conductive metal on earth. Gold is also conductive but is prohibitively costly due to its a lot greater price for most industrial uses in comparison to silver.
7) Silver is an industrial metal with over 10,000 commercial applications. Because it is one of the best electrical and thermal conductors, that makes it perfect for electrical utilizes such as switches, multi-layer ceramic capacitors, conductive adhesives, and contacts. It's used in some brazing and soldering also. Silver is also utilized in solar cells, heated automobile windshields, DVD's and some mirrors.
8) Silver is an important element in the electronic gadgets that are an expanding part of our digital age. It's in every cell phone, smart phone, tablet, pc keyboard, solar cells and every radio frequency if ID device (RFID). This tends to make it an essential element going forward because the globe becomes more addicted to gadgets. The development and increasing residing requirements of individuals in the emerging economies will drive long-term growth of new customers that will demand more and more electronic devices.
9) Silver's industrial demand ought to increase 60% to 666 million ounces per year by 2016 from 487 million ounces in 2010. Current annual mine production is only about 700 million ounces per year expanding a few % annually.
10) Of a total of fifty billion ounces of silver that have been mined in history, only two ounces (estimate) or 5% remain in above ground inventories accessible to be purchased and sold. This really is due to silver being utilized up in industrial applications in very small quantities, which makes it unprofitable to recycle at today's prices. A lot of silver is utilized in minute quantities in industrial products that are used up and discarded without being recycled.
11) This really is unlike gold exactly where 5 billion ounces have been mined and two and half billion ounces (estimate) are still accessible in all inventories. Since gold is hardly ever discarded because of its very high price, utilized primarily in jewelry or for investment purposes, the total inventory is so a lot bigger than silver.
12) The supply demand equilibrium in silver is extremely tight. There is now less than one year of inventory of silver, in comparison to over eleven years of inventory in the 1970’s.
13) Exchange Traded Funds (mainly SLV, SGOL, PSLV, and CEF) have opened precious metals investing in silver to countless investors around the globe. When investor make net new purchases, the ETF purchases physical silver and removes it from the accessible market, which increases the scarcity of accessible supply. This really is the first time many investors worldwide aren't required to actually buy physical silver bullion and coins and store it themselves. Now they have an investment vehicle that offers liquidity and ease of trading to get exposure to precious metals. My advice is to buy silver and store it away safely to protect your wealth. How High Will Silver Go? Learn More >>> Kitco Silver >>> http://silverdollar.cc