With today's economy as it is, could silver restore the economy? For many years investors have favored gold over silver, but with the high prices of gold now days, it is time for silver to take a new stand.
Like in India, now you have consumers buying both gold and silver, as it is affordable. This seems like the route that will be repeated in other countries due to the cost of gold rising so high. Gold was $1,000 an ounce because of the banking crisis. Prices have tumbled about 13pc, around $875 an ounce since then, and silver has fallen 16pc to about $12.20 an ounce from a six-month $14.60 peak in February.
Around 100 years ago, gold and silver were of the same monetary value. Money from central banks and governments are expected to support prices of both metals. In short-term, silver and gold prices could slip as investors switch back to riskier assets such as equities. If a real uptake in growth does materialize, silver will remain relatively untouched.
Industrial demand for silver, including from the photography industry, is reckoned to be about 65 percent of total global supplies estimated at 895 tonnes. Part of the boost for silver will come from investment demand. With gold prices still near $900 an ounce, silver is expected to rise.
The iShares Silver Trust, the largest silver-backed exchange trade in New York, holds a record of 8,413 tonnes, which is more than 20 percent since early January. This is so much more than the 40 percent rise in the SPDR Gold Trust, with holdings near record highs of 1,127 tonnes. It seems that with these numbers and things as they are, silver may just be the new gold.
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