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Are Silver Spot Prices Poised for an Increase?

Commodities / Gold and Silver 2015 Jul 31, 2015 - 12:23 PM GMT

By: Submissions

Commodities

Jenna Cyprus writes: As anyone with significant investments in silver knows, prices have been on a steady decline for the better part of four years now. In fact, you have to go all the way back to the beginning of 2012 to find prices above $40. Since then, the trajectory has firmly pointed downwards. Currently you can purchase an ounce of silver for less than $15. Analysts suspect this won’t be the case for long. While ‘experts’ have predicted for months now that silver is finally positioned for growth, there seems to be more tangible proof for today’s predictions. Things finally appear to be looking up and now may be the time to diversify your portfolio.


Lowest Point May Still be in the Future

While experts believe silver prices will turn around sooner rather than later, some note that things could get worse before they get better. For example, Mitsubishi Materials Corporation’s price forecast report that was released earlier this year suggests silver could bottom out at $10 per ounce. However, the report sticks to its original 2015 forecast of $16.50. In other words, there could be a lot of movement between now and December 31.

According to Jing Pan, research analyst and editor at Lombardi Financial, “Under this price pattern, investors could sell their silver today in the physical market, and then buy it back in the futures market a few weeks later and profit.” However, it’s likely that most people will hold where they are and wait for the rebound that so many are expecting.

Logic Behind Silver Increase Predictions

But, aside from the fact that silver historically increases in value, what exactly are experts pointing to when they predict silver will climb to $20, $30, or even $50 per ounce in the coming months?

Many are looking at fossil fuel and the rise of solar energy – which puts silver in high-demand. In 2000, only one million ounces of silver were used to make solar panels. In 2013, that number had increased to 64.5 million ounces. By the end of this year, numbers suggest 100 million ounces of silver will be used to manufacture solar panels. You don’t have to be a financial analyst to understand what’s happening: The demand for a finite resource is increasing.

Impending Market Collapse?

While government officials and the national media seem to approve of the current state of the economy, others aren’t so confident in the where the market is going. Michael Lombardi, Editor-in-Chief of Profit Confidential is among this cohort. He believes another crash is coming this year and that precious metals are one of the only ways to protect your portfolio. If his predictions hold true, the ceiling on silver could exceed $50 per ounce.

Closely Monitor the Situation

If the past five years have told us anything, it’s that we really don’t know what silver is going to do. We’ve been waiting for a breakthrough and all we’ve been granted is a steady decline. However, this much we know: Silver can’t stay down indefinitely. If you can afford to do so, now may be a good time to diversify your portfolio with a large amount of silver. The risk is low and the potential rewards are high.

If nothing else, keep an eye on the prices. There will likely be a lot of movement this fall and winter and you don’t want to miss out on what’s happening. For better or worse, silver prices won’t remain in the $14 or $15 per ounce range for very long. Prices will go one way or the other, and many predict we’re in store for positive growth.

By Jenna Cyprus

Copyright © 2015 Steve H. Hanke - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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