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In my opinion, silver is the next big thing in the global markets. Why?
There are lots of factors that are being discussed on why you should invest in silver, but I will just explain some of the main reasons why I think silver is the next big thing.
Since gold and silver are the closest competitor, I will give a brief introduction on the two metals and discuss why I think silver is the better investment than gold.
Gold is mined and accumulated. Silver is mined, consumed in micro amounts and then vanish. Thus, the above ground stockpile of gold is increasing, while the above ground stockpile of silver is decreasing. Therefore, it might not be difficult to see that gold-to-silver ratio will become narrower in the future. For your information, the gold-to-silver ratio currently stands at about 1 to 68 (Silver price to Gold Price) In other words, a single ounce of gold is worth about 67 ounces of silver.
Silver has more meaningful industrial uses than gold. Silver is used in virtually every electrical appliance in the world due to its low resistivity. Gold, on the other hand, has limited industrial uses. Jewellery, particularly in developing countries like India, accounts for over two-thirds of annual gold demand. But one has to wonder: If the price of gold keeps going up, at what point will demand decline because it’s too expensive? For example, will consumers in developing countries continue to buy jewellery if gold goes to $2,500 or $3,000 an ounce?
Do keep in mind that the key to this market will not be INDUSTRIAL demand as it is fairly constant. It will be INVESTOR DEMAND that theoretically has NO LIMITS. If you don’t think that investor demand will kick-in in a big way, you should lower your expectations for silver’s highest attained price. However, having said that, it is clear to me and you that the world seems to be moving into a period of greater anxiety, which should fuel a rise in the price of all metals (gold and silver). From the demand and supply reasons that I have explained above, I personally believe that silver is the better investment than gold.
So how can you expose yourself to the silver market?
There are different ways of investing in silver such as owning physical silver bars, investing in silver mining stocks, investing in physically-backed Exchange Traded Funds (ETFs), speculating on silver futures and spread-betting. In order to prevent any counter- party risk, invest in physical silver bar or coin is the way.
Any feedback or suggestions are welcome:)