The silver value has soared to its highest silver spot price in 30 years. So what is the outlook for silver prices, the most preferred profit strategies or favoured profit plays for the rest of the season? Well it depends on which expert you talk to. The silver price per ounce rose above $42.00 in mid-April, a 31 year high. That is up 32% for the year so far and more than doubled since last September. The question the majority are asking is where is it going from here, and just how should one position themselves?
The consensus from many of the market professionals would be that the long term outlook for silver remains bullish. But that it must be currently over bought as well as a pullback even perhaps back to $30.00 may happen. Most appear to agree that silver is likely to run as much as a high of $50.00 at the end of year, the bearish outlook says that it may take 3 to 5 years to access $50.00.
If you look at the silver gold ratio over recorded history you locate that it is between 16:1 and10:1. At 16:1 and a $1500 current gold price would indicate silver is under valued and must be trading even closer to $92 per ounce. Why aren’t we in that level? Either gold is overpriced or silver is under-priced or even the world is different. In my opinion this is the later.
Many of the current investors want to www.spotsilver.net being an inflation hedge, but which is really only area of the story. Not only is silver undervalued versus gold, but silver is really a hedge having an industrial kicker. Silver is used in 1000s of industrial processes and is also on the go. Over half of the silver being produced today gets used up buy industry. We’ve all seen the uses of silver continually grow within this electronics age. Thirty years back we experienced a twenty year availability of silver above ground for industry. Today that supply has dwindled to less than a year’s supply.
Something’s wrong here, as well as the only explanation I will see is some sort of government or central bank manipulation has been happening for several years. That may be great for silver investors because when corrections do occur, they inevitably over shoot the equilibrium mark with a quite a bit.
There exists another issue driving gold and silver prices at this time that numerous are unaware of: precious metals are in high demand by nation states. This is a game changer. The CPM Gold Yearbook reports the aggregate total of the quantity of ounces of precious metals bought or sold by nations worldwide. Because the early eighties governments happen to be selling. In 2008 it absolutely was predicted that 5 million ounces would be purchased in 2009. The 2010 CPM Gold Yearbook shows a net purchase of 15 million ounces. This rqihjx a sign that governments worldwide are starting to distrust the need for the American dollar. Which doesn’t include some countries including Iran and China who don’t report their actions but who definitely are rumoured to get buying large volumes.
Finally, silver coins have grown to be the “common man’s metal”. Should you be you are looking to buy precious metals and your option is between gold at $1500 per ounce and silver at $40 per ounce, many people are choosing the $40 since it is apparently a bargain.
So provides the silver chart shown that silver has moved very far too quickly? Some are expecting a significant pull in price before continuing on to test the 1980 record cost of $50. Others consider the 1980’s record price and adjust the purchase price for inflation and see that this spot silver price needs to attend $130 per ounce in order to equal that record. So there may be a long way to visit yet, without even taking into consideration around the globe financial situation today. I don’t plan on selling any silver bars or silver bullion coins any time soon.