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How High Will Silver Go?

July 2, 2012

    How High Will Silver Go? – Silver Report

    As an investment and industrial metal, silver plays an interesting role within the precious metals market. For millenia, silver has been trusted as a sound form of money. It is silver’s reputation as a historic monetary metal that has driven investors around the globe over the last several years to silver as a wise hedge against inflation.

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    However, in addition to its historical monetary use, silver has the highest electrical and thermal conductivity of any known metal. These unique properties makes silver an extremely important industrial metal that is heavily used in global manufacturing. Today, silver is used in nearly all electronic equipment including mobile phones, computers, televisions, and even medical devices.

    This global industrial demand for silver is what separates it from its yellow cousin, gold. In fact, an oft-repeated phrase among those in the know is that “gold is hoarded and silver is consumed.”

    In other words, the world’s silver supply is being consumed at an extremely rapid pace while the mining production of silver cannot keep up with demand.

    And as our world continues its relentless technological revolution, new industrial applications for silver will be discovered. Understanding this massive pressure on existing silver supplies is important to the crisis-minded investor. Some forecasts show that silver could be depleted from the earth’s crust sometime within the next 7-9 years. (Read a U.S. Geological Survey silver report here.) This dual role for silver makes the price of the metal much more sensitive to the ups and downs of global economic growth perceptions.

    Despite the multi-year pullback in silver after its near-$50/oz peak back in 2011, I remain firmly bullish on this important metal and believe we will see another major rally in price of silver. I believe that this next rally could see silver reach above $100. All of my physical metal holdings are long-term. I use ETFs and mining stocks for speculative trading purposes.

    I personally believe that owning the physical metal itself is the best way to get started in precious metals investing. After you have built a good solid foundation of the physical metal (in your possession), you can then consider specific mining companies or broader ETFs.

    We provide our subscribers with weekly precious metals analysis including charts, news, and commentary.

    For more of our free precious metals commentary, click here.

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