The Silver Market suggests, at the current prices, that investing in silver could offer investors one of the single best long-term investments today. Most people know that both silver and gold are very valuable but many do not know that while gold has demonstrated a solid trend of price appreciation since 2001, more than doubling in price, the price of silver has recently outperformed that of gold.
Longer term trends have shown that between 2003 and 2006, the price of gold increased by 84% while the price of silver increased more than 200%. The argument for silver is that it is a good investment because the economic and monetary fundamentals that are still in place as of today are tougher than they were in the 70’s when silver cost more than $50 per ounce. The market for silver today is under $20 per ounce but the projections for the future far surpass that.
Silver is still a favorite among investors because it has a proven potential to multiply capital over and over, it has a fairly small global market, and because of its hyper-volatility. Silver is totally unique among all commodities and because it is mined as a byproduct of base metals no matter how high the silver price goes the majority of supply is inelastic. Industrial demand is also highly inelastic, very unlikely to fall on rising prices, because silver sports unique chemical and physical properties that make it irreplaceable in all kinds of products.
Silver has long enchanted speculators and the higher its price goes the more speculators love to bid on it. This creates a demand curve that is inverted. Rather than acting conventionally and retarding demand, higher prices accelerate it. Silver can offer inflation protection and profit opportunity.