The recent market activity of silver has seen a substantial price plunge after its meteoric rise in the first half of 2011. Silver, though historically volatile on commodities markets, became the record precious metals performer in mid-2011. Although its recent devaluation was seen by many as the purchasing opportunity they’ve been looking for, some analysts predicted furthur dips in silver prices, before year end.
As is often the case on today’s fluctuating market exchanges, a short passage of time can make a world of difference. If you ask analysts about where the price of silver is going in the next few months, chances are, you’ll get a majority of positive responses. What’s changed?
It looks like there will be no swift end to the European debt crisis. This undeniable fact supports the rising price of gold, although it too has seen a hit in recent weeks. Silver typically hangs on the coat tails of gold’s market momentum, but more than that, historically low interest rates make owning precious metals more attractive. Silver could see a surge of buying demand, simply as a hedge against inflation.
However, the greatest fundamental that could drive silver higher, is the continued expansion of emerging markets, particularly China. The position of silver, the most frequently utilized industrial metal, will likely experience continued increasing demand from the Chinese. Economic growth in China is currently outpacing the US economy by nearly five times.
The price of silver, still down from its mid-year highs, is alreday showing signs of a rebound. There’s still time to take advantage of downward momentum to increase your portfolio strength with physical stores of silver, the most easily liquidated asset on earth.
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