The Price of Silver – Investing in Silver

Historically silver has been a volatile commodity, and although the price of silver has steadily rose over the last few decades it is poised to become one of the top performing commodities in the years to come. The price of silver has delivered some of the best gains since the turn of the decade beating gold’s rise by 25% which was second best among commodities. The reason silver outperformed gold as the best safeguard investment can be largely attributed to the high demand for industrial uses, and this has also contributed to the strong rise in the price of silver.

A major contributing factor to the rise in the price of silver is that there have been a myriad of new users of silver looking to take advantage of the metal’s unique properties (such as electrical conductivity) in the electronics and medical fields among others. In addition, there is the continued investment demand for silver from new investors. We have many more Bullion Investing Help Articles Now Available.

Naturally it’s still all about supply and demand and with declining inventories of silver indicates the eventual acquisition of silver by investors will also drive up the price of silver.

An additional factor affecting silver is the gold/silver ratio, which historically has been around 16 (meaning that the price of gold has been 16 times higher than the price of silver). Today this ratio is about 54, which indicates that if we use this ratio as a standard, silver “should” be over $100 an ounce. Of course, several factors have to be taken into consideration, most importantly the history of this ratio occurred when silver was considered money and not demonetized as it is today.

The key for investors to keep in mind is that during periods of economic crisis, such as the 1970s, the price of silver tends to increase much more than the price of gold. We have many more Bullion Investing Help Articles Now Available.