With silver at multi-year lows and demand at all time highs, it seems as if now is the perfect time to start stockpiling this shiny metal. In 2011 silver hit highs of almost $50 per ounce and now 5 years later, the price is back down near the $14 mark. One would naturally wonder, why the price is so low if demand is so high. This price drop seems to defy all economic logic and the law of supply and demand. However, many prudent silver investors are using this low price as a buying opportunity to bring down their cost-averages and obtain more silver bullion at extremely low prices. Major mines are pulling silver out of the ground at approximately $17 and ounce, which means that they are selling to mints and other buyers at a loss. How and why is this possible? Why would the mines take a loss on a product that they are supposed to be making money on?
These questions have no definite answers, but many speculations exist. There have been talks of major precious metal price manipulation by many major banks, countries and other entities for their own personal interests. Maybe these big economic players are giving kick backs to mining companies to keep the prices of gold, silver, platinum etc. low. Even though no one has a crystal ball, there is definitely some possibility of a “malevolent force” keeping the price of silver and other precious metals at artificial lows.
However, the law of supply and demand always prevails and will eventually outweigh any outside manipulation that may be occurring. If this occurred, silver could have tremendous upside potential that could be endless. As stated before, the demand for silver is extremely high, and this demand exists on both the investment and industrial sides of the spectrum. Besides the many ounces of silver sold every year to investors countless ounces are sold every year to companies that use it for industrial purposes. As of the last few years, half of annual silver sales are for industrial purposes, while only 10-15% of gold sales are used for industrial purposes. Silver is a multi-faceted investment with huge investment and industrial uses. Silver and gold are the only currency that has been around since man’s early years, which should say to wise investors that these precious metals may be even safer than physical currency issued and backed by a government. With low prices and high demand, this may an opportunity of a lifetime to buy silver while it is still affordable. Let us know what you think will happen with the price of silver to come!
*These are solely the opinions of Bullion Shark, LLC and are not intended to be used as investment advice. Please consult an investment professional before investing. *