There Are Many Great Reasons For You To Purchase Silver Now, Despite Higher Prices!

Feb. 21, 2011 - PRLog -- Silver prices have been going up for a while. On Saturday, Silver closed at an all-time high. Within the last one year, silver has given a return of over 100% in dollar terms. Still, it makes sense to purchase silver now. Here are some great reasons to purchase now!

China has switched to being a net importer. China, the greatest commodity guzzler within the world, is importing silver big time. Actually, in 2005, China exported 100 million ounces of silver (one troy ounce = 31.1 grams). In 2010, five years later, the country has turned a net importer, importing 122.6 million ounces, which is around 14% of the global production. Now, we all know the impact China has on the cost of a commodity it takes liking to. India, the greatest consumer of gold and silver in the world, imported 1,200 tonnes of silver in 2010, up 20% from the prior year. This increase in imports has largely been attributed to increase within the cost of gold, therefore making gold jewelry extremely costly. This has made individuals in these countries turn to silver jewelry. Actually, as the cost of silver keeps going up, more and more individuals are most likely to take a liking to silver jewelry. CLICK HERE to check out Silver Dollar Values Silver Prices now! http://silver-dollar-values.net has all of the details for an intelligent investing choice.

Supply and demand mismatch. This is really a extremely fundamental point, which is behind each and every cost rise. Silver demand is much more than silver supply, and therefore the costs have been on a run. The Silver Institute, which tracks silver inventory, reports that from 2000 to 2009 (the newest information obtainable), the supply of silver went up to 709.6 million ounces, up from 591 million ounces. This exhibits an increase of around 2% per year.

Information from the CPM group shows that mining production rose to 741.5 million ounces in 2010 (up around 4% from 2009). Silver demand in 2009 stood at close to 889 million ounces and also the distinction between supply and demand was largely fulfilled out of scrap sales. Given this, almost 19% of silver demand is being filled from the sale of silver scrap. This isn't sustainable. Visit http://silverdollar.cc for more silver and gold tips.

There is no easy recycling of silver. One method to improve supply would be to recycle silver like gold has been over the years. Silver is largely utilized as an industrial metal. It's a extremely great conductor of electricity, the very best heat transfer agent and a reflector of light, a extremely great lubricant, catalyst and alloy. However it is utilized in extremely little amounts as an industrial metal. Given this, it isn't simple to recycle silver. Also, at its present cost, it isn't monetarily feasible to recycle silver. Specialists are of the viewpoint recycling will turn out to be monetarily feasible only as soon as the cost of silver crosses around $50 per ounce (presently it quotes at around $32-33 per ounce). Given these factors, increasing sale of silver scrap isn't extremely simple.

It is not simple to ramp up production. Specialists who closely track silver think the world is running out of silver. Probably the most vociferous of this lot, Adrian Douglas, the operator of Market Force Analysis and also a director of GATA (the Gold Anti-Trust Action Committee), has gone on record to say the world will run out of silver in 2020, and therefore turn out to be the very first element of the periodic table to turn out to be extinct. Theodore Butler, silver analyst at Butler Research, has said in the past that silver stocks have declined from 10 billion ounces (one ounce equals 31.1 grams) in 1940 to 1 billion ounces these days. In contrast, gold inventories stand at a total around five billion ounces. So, if we were to believe these specialists, there's five times more gold on this earth than silver. But does that reflect within the cost of these metals? Definitely not. This decreasing inventory can't be built up via increases in production. The earth’s crust has around 17 times more silver than gold. Regardless of this, silver production can't be ramped up rapidly. The main reason for this is that it's rare to discover a pure silver deposit. Hence, almost two thirds of the silver that's mined has come about as a by-product of mining other metals, like copper, zinc and lead. Therefore, increased production of silver consequently depends on the price of the other metals it's commingled with. Furthermore, the silver “mine-cycle” is close to 10 years, i.e. the time it takes from beginning to explore for silver until the mine finally starts to produce silver. Through the years, the low price of silver has ensured that the mining businesses haven’t gotten around to searching for silver. CLICK HERE to check out Silver Dollar Values Silver Prices now! http://silver-dollar-values.com has all of the details for an intelligent investing option.

Brand-new uses of silver. As mentioned previously, silver has plenty of industrial uses, given that it's probably the most malleable and ductile metal, following gold. Silver is presently utilized in electrical applications like conductors, switches, fuses etc. It's also utilized in photography, and silver alloys are utilized as cathodes in batteries. Interestingly, the new uses of silver keep increasing. As a recent document from Hinde Capital points out, “As a bactericide, silver is used in water purification and air handling systems. Silver is also a natural biocide and is very effective against bacterial infections as such." New goods utilizing silver’s biocidal qualities are being developed every year; clothing, bandages, toothbrushes, door-knobs (flu-protection), keyboards, the list keeps on growing.” All this may make sure the demand for silver keeps expanding.

The investment argument. Investors are gradually recognizing the potential of silver. It has led to an increased demand for silver coins as well as exchange-traded funds globally. The US Mint sold more than 6.4 million silver eagles this January -- the largest sales in a single month since the coin was introduced way back in 1986. Eric Sprott, who runs Canada-based Sprott Hedge Fund and who lately launched a silver fund, created a extremely fascinating point during an meeting. His new fund entered the marketplace to purchase 1 million ounces of physical silver. The silver wasn’t readily obtainable and it took the fund almost 10 weeks to acquire the whole lot. Now, this was the effect of just one fund. Envision what would occur as soon as a couple of more silver funds are introduced. Actually, information from the Silver Institute shows that the investment demand for silver went up by a whopping 184% to 136.9 million ounces in the year 2009 (the newest information obtainable). Moral of the story: Purchase silver now!

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