Get your silver while it's hot

May 13, 2015 11:30 AM

Indeed, we view the opportunity in silver bullion today as very much like that seen in the period from 2003 to 2006. Then, silver traded below $10 per ounce prior to sharp gains during and after the financial crisis which saw silver surge to $20 prior to a sharp correction and then surge to nearly $50 per ounce in April 2011.

Gold remains under-covered in the mainstream media rather than specialist financial media such as Bloomberg, CNBC and the FT. It is very rarely covered in mainstream media and when it is covered it is frequently done so in a very unbalanced way. 

Poor man’s gold, silver, is covered even more rarely and is therefore not on the radar of the majority of investors internationally and remains a hugely under owned asset. Therefore, it is encouraging to see the UK’s Telegraph publish an interesting piece this week making a strong case for owning silver.

The main thrust of the article, written by the commodities editor Andrew Critchlow, is that demand for solar power is increasing globally and this will impact positively on the price of silver as it is a crucial component of photovoltaic cells.

Indeed, the fundamentals in the silver market remain strong due to its role as an industrial commodity as well as a precious metal used in jewellery and for investment or rather store of value purposes.

New industrial applications for silver are constantly being discovered. It is an excellent electrical conductor, withstands corrosion and has anti-microbial properties making it very useful to a wide array of technologies.

These factors, coupled with its function as a store of value, would suggest that the strong demand currently seen for the precious metal will continue.

Demand has indeed, been strong – outstripping supply by almost 22% last year. Total global demand amounted to 1.07 billion ounces while total mine production worldwide came to 877.5 million ounces, according to the Telegraph.

The shortfall was made up from existing stocks of silver. How long this trend can continue is unknown.

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About the Author

Mark O'Byrne is executive director of Ireland-based GoldCore.