The silver market recently experienced a major decline in value from $50 an ounce to about $35 an ounce. This was also true for silver bullion. The reason for this decline was because one particular investor decided to sell off some 1,000 tonnes within a very short two week period. Many investors believed that it could bottom out at under $20 an ounce. Since then, though, selling has stopped and buyers have begun to purchase silver again and the value has begun to climb again.
Investors are beginning to wonder if silver can be treated as a financial security in the same way gold is and whether it will ever achieve the status of being a monetary metal recognized by central banks and other gold investors. They are also wondering if the silver market is capable of being manipulated in the same way that large US banks have in the not too distant past.
In today’s world investments are viewed purely as sources of profit. Most investors hold onto their investments with a goal in mind of selling them once they have reached their maximum profit level.
In the third world, wealth is a relatively new concept and new investors are always reminded of their recent impoverished states. For this reason, gold was always the preferred method for investing any newly achieved wealth. Over the years, gold investors have watched both gold and silver perform well for them. Gold and silver are likely to continue to exceed performance expectations over the next several decades. Thus many investors believe that both gold and silver will provide good financial security.
China has recently imported tremendous amounts of silver. This is largely because they will shortly begin upgrading their energy grid in order to meet expected surges in the coming decades. In the past year, there has been a record demand for silver bullion. The higher prices do not seem to be deterring Chinese buyers. In 2010, China imported four times the amount of silver bullion that it imported in 2009. Up until 2007, China was a huge exporter or silver bullion. It is expected that soon India will match this trend seen today in China.
The price of silver bullion can be manipulated. This has certainly been experienced in the past. But there are not very many investors who hold more than 1,000 tonnes of silver and who would be capable of manipulating the silver market.
It is expected that over time, silver prices will continue to rise. Still silver will continue to be a relatively volatile commodity in which to invest.
Because of its relative scarcity, silver will always be a good market for investors to pursue. Even though we have seen steady fluctuations in the silver market, some drastic and sudden, it always regains its value over a relatively short period of time. If you are looking for a way to beat the current rate of inflation, thinking about investing in silver would be a good idea.
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