The important query for precious metals investors is whether or not silver will continue to become a great performer in 2013. Cash Morning's International Resource Specialist Peter Krauth thinks so. He forecasts that silver prices will hit "north of $60 per ounce" by spring. If his forecast is on target, it bodes nicely for each holder of silver bullion and coins as well as for holders of ETFs like the iShares Silver Trust (NYSE Arca: SLV).
Listed here are 5 important elements that show why Krauth's forecast for silver prices in 2013 might be right around the cash.
Silver Prices in 2013: New Industrial Uses. One positive for silver must be the aforementioned industrial uses. At last month's Denver Gold Forum, the CEO of silver producer Hecla Mining (NYSE: HL) Phil Baker produced a fascinating observation. He stated there was a parallel to what occurred to silver usage in the turn of the 20th century to what's taking place these days. At that time, photography became a significant driver of demand of the silver marketplace.
This time although Baker believes it'll not be one business solely driving demand, but a myriad of new customers of silver searching to take benefit of the metal's distinctive properties (like electrical conductivity)
Investment Demand for Silver
Another aspect favoring silver prices will be the continued investment demand for the precious metal in the average individual about the globe, due in big part to central bank policies. Through Sept. 15, exchange-traded funds' holdings of silver totaled more than 608 million ounces and had been valued at $20.5 billion.
"Investors and analysts are bullish on presumptions that additional central banks will do more to try to stimulate economies in order to increase consumption and spur employment, top to even higher investor interest around the 4,000 year allure of silver as a safe haven along with a store of worth," stated Michael DiRienzo, executive director of the Silver Institute.
Let's not forget concerning the declining inventories of silver either. Based on COMEX, its stockpiles of the metal hit a four-month low in early August. That shows accumulation of silver by investors.
Resource Nationalism
With the mining standpoint, there is a looming risk that could drive silver prices greater in 2013. That is the expanding threat of resource nationalism, the number one international strategic risk for mining businesses, based on Ernst & Young. The risk advisory firm Maplecroft stated in its Political Risk Atlas for 2012 that "where [resource nationalism]
These kinds of scenarios would put a crimp into production of resources like silver, and drive prices greater. One example of resource nationalism is one of the significant silver producers, historically and presently, Peru. Actually, that country still has the largest in-ground silver reserves, according to the U.S. Geological Survey.
The country's president Ollanta Humala came into office as if he had been going down the road of nationalism, like Hugo Chavez of Venezuela. He has moderated his views since the initial fear of outright nationalization at mines, but there are still many questions remaining concerning the future course of mining in the country. Any kind of government action in Peru affecting silver production there would surely raise silver prices worldwide.
Gold/Silver Ratio
An extra aspect affecting silver next year is a historic one. The gold/silver ratio has throughout much of history been at about 16. That is, the price of gold has been 16 times greater than the price of silver.
These days this ratio is about 54. This means, based around the long-term historical ratio, silver "should" be over $100 an ounce! Of course, most of the history of this ratio occurred when silver was considered cash and not demonetized, as it is these days. But the key right here for investors to keep in mind is that during periods of monetary crisis, like the 1970s, the price of silver tends to increase much more than the price of gold.
Jim Rogers and Silver Prices
An additional plus is that some "smart" cash is touting silver. Legendary commodities investor Jim Rogers recently pointed to silver because the metal of choice over gold in the current economic climate. He recently told Tom Lydon of ETF Trends "Governments print cash - that is all they know. So own real assets like silver . . .and you'll survive."
Rogers added in that he owns all the precious metals but stated if he had to buy one these days, it would be silver. He indicated to the fact that silver will be the only significant commodity which has not reached a new all-time high in this commodity bull marketplace and also is still cheaper than it was 32 years ago - a great a reason as any for investors to expect more gains for silver in 2013 and beyond. How High Will Silver Go? Learn More Kitco Silver >> http://silverdollar.cc
