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2011 Silver Forecast

Thursday, July 1, 2010

Silver has long been regarded the poorer investment cousin to the flourishing gold market, with its value sitting at a fraction of the gold price, focus has for a long time been fixed on the scarcer, higher demand and more portable gold market - You’ll have to store a fair chunk of silver to match a 1KG gold bar investment…. But silver may soon have its day!

Silver prices have traditionally tracked the gold trend and with popularity in the domestic jewellery and manufacturing markets remaining steady, despite the decline of some major silver consuming markets such as photo reprographics, silver is set for a gradual climb to match that of gold as we head towards 2011.

A few factors that impact the silver price which are worth consideration – While the demand for silver continues to increase, the supply which is still increasing year on year, isn’t keeping pace making silver a gradually more scarce commodity.  The majority of silver is sourced as a bi-product from other mining activates while dedicated silver mines, which extract silver far more economically, are nearing exhaustion.

Scrap Silver, just not exciting… The gold industry has seen huge input from the relatively new Scrap Gold market, powered mainly by private sales of recycled jewellery as people look to take advantage of a well-publicised gold high and free up some much needed cash in a tough economy. Scrap Silver on the other hand hasn’t seen such exciting activity, people just aren’t inspired by the low value of silver to go routing through their cupboards and draws for old silver! And so silver, has become a more use once and throw away metal, especially in industrial applications where silver is often used for minor components and connections.

But the two ultimate factors influencing the future silver fore will be the gold price and the strength of the US dollar – A slowdown in the strengthening rate of the dollar is the trigger for surge of investment in the commodities markets, but with gold already sitting near its all-time high, many potential low level investors, who combined are a sizeable market force, will look to a similar alternative with potential to grow, silver will most probably be the primary choice.

So thoughts on the silver price as we head towards 2011 are positive, over the next three years the generally thinking is silver will make huge gains – but will it match those of gold in recent years?

If you’ve been inspired by this article to invest in silver you might want to now take a look at our 1kg Silver Bullion and 5kg silver bullion bars, you can buy silver bullion or buy gold bullion safe and secure online direct from the Gold Bullion Company or call 0121 523 1047 and order by phone.