Tag Archive | "silver prices"

Silver Prices Suggest Future Advances

Silver Prices

Silver Prices and Your Precious Metals Investments

Making a change in your investment portfolio now could garner some serious earnings for you if silver prices live up to their possibilities. This precious metal is often overlooked by people coming freshly into the market because they are dazzled by gold prices. However, gold may have hit a ceiling. Prices are so phenomenally high right now that many experts foresee a great deal of resistance if prices try to inch forward.

On the other hand, every bit of historical data suggests that silver prices have a lot of ground to gain. Silver usually holds second place behind gold at a certain ratio of values in gold’s favor. Presently, gold is fifty times more valuable than silver.

This low performance for silver prices is unusual. The price of silver is customarily closer to gold in proportion. If the distance between these prices were to return to something more ordinary, such as a 20-to-one ratio, then silver investors would more than double their money.

Historical Silver Prices

Silver has already given us some signs of covering this distance. At the turn of the century, an ounce of silver went for an incredibly low $4. It has since increased in value magnificently and is now trading for more than $30. This performance is due both to high demand for silver in industrial and technological manufacturing and to its service as a jewelry setting as well.

Like gold, silver went through a summer doldrums stage just a few months ago. Many observers began to talk about a precious metals bubble. However, gold and silver prices have since recovered all of that the lost ground and gained some additional value as well.

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Bullish Silver Price Projections

Demand For Hard Assets Is Positive For Silver Price Projections

Silver Price ProjectionsMaking price projections for commodities is very difficult due to all the variables that affect commodity prices; however, a credible case can be made for bullish silver price projections over the next few years.  Many in the investment community do not realize that silver has actually done better than gold over the past two years, with a gain of 76% for an ounce of silver and only 49% for an ounce of gold since December 2009.

While silver peaked out at $48.58 in April 2011 and now trades in the vicinity of $32.00 per ounce, there is no reason to abandon bullish silver price projections for the foreseeable future.  The reasons for the silver rally to nearly $50 per ounce in April 2011 are still present.  Silver is a hard asset that is desirable during times of economic upheaval and currency debasement.  With the European Debt Crisis increasing the chances that the European Central Bank will be forced to start printing Euros, and the possibility that the United States Federal Reserve Bank may engage in additional quantitative easing if the economy slows down in 2012, hard assets such as silver will remain in demand and should increase in price in coming years, as fiat currencies are devalued.

The Bullish Case for Silver Price Projections

Besides the likelihood that central banks in Europe and the United States will increase the supply of Euros and Dollars in 2012 to bolster their economies and ease their debt burdens, there are other reasons to be bullish regarding silver price projections for 2012 and beyond.

Supply and demand fundamentals for silver indicate bullish silver price projections.  Only one Billion ounces of silver bullion is available for consumption by industries that use silver in industrial processes, commercial outfits that make jewelry and silver products, and silver investors.  Unlike gold, silver is an industrial metal which has an industrial base of demand beyond jewelry and investment.  The current supply of silver is barely adequate to keep up with demand for silver.  Any uptick in demand for silver, will lead to an increase in the price of silver.

Declining base metal production is a bullish indicator for silver price projections.  Much of the silver that is currently mined out of the earth is a byproduct of base metals mining.  If the rate of base metal mining decreases in coming years, due to less demand from stagnating industrialized economies for base metals, the supply of silver will decrease, which will lead to an increase in the price of silver.

The advantage that silver has over gold is that since silver is an industrial metal, demand for silver increases as the world economy strengthens, so if 2012 and beyond are surprisingly strong economic years, then the case for bullish silver price projections remains intact.  On the flip side of the coin, if 2012 and beyond are weak economic years, central banks are likely to flood their economies with money, which also keeps the bullish silver price projections intact.

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In Commodities Silver Prices Look Ready To Resume Acceleration

commodities silver prices

The Red-Headed Stepchild of Commodities Silver Prices Are In Hot Pursuit Of Gold

Everybody loves gold, even as commodities silver prices plot a comeback. Nowadays, gold is so ubiquitous that the closing spot price is routinely quoted in ordinary newscasts aimed at the average citizen who only has gold in his teeth, or in his wife’s jewelry box. That same person would be surprised to know how much silver lurking around his house.

In addition to its function as a store of value, or as an ornamental metal, silver also has many industrial applications. This added utility is why silver and gold prices sometimes diverge, even if they are frequently coming out of the exact same hole in the ground. At those times when industrial demand is raging, silver can outperform its illustrious cousin. During recessions, where industrial demand for silver slows down, its price can fall behind. It is this basic underlying difference in purpose that can bring superior profits to the savvy silver investor.

For Many Who Trade In Commodities Silver Prices Are Expected To Closely Track That Of Gold

Put another way, most investors look at the daily spot price for gold, and simply presume that silver has moved up or down in rough proportion to that of the more prominently-known metal. Because this is not the case as often as common knowledge would have you believe, great opportunities for contrarian plays exist in the spread of commodities silver prices.

One simply has to drill deeper into the industrial output reports than the other, more careless traders are likely to trouble themselves over. This gives some players a range of options that gold cannot offer.  Future demand tips off investors as to whether commodities silver prices are likely to be turbocharged for an advance beyond gold, or dragged down by industrial malaise to the point where it becomes an attractive short play against the herd instinct.

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