The Gold bearing on the image of Silver

The current state of positive beliefs about gold is impacting silver’s impending predictions as forecasters believe it will possibly rise to $50 an ounce, riding high on gold’s success. HSBC relies on its gold’s affirmative forecast, where it has prophecised that the precious metal will cost $1,850 per ounce in 2013. Investors depend on these and similar forecasts for gold as they continue to analyze silver’s future. But what holds for gold may not be for silver. They need to have a neutral view of silver, irrespective of what lies ahead for gold. In such situations, the future outlook for silver is raising concerns.

Analysts at Barclays Capital and Deutsche Bank called attention to the loopholes existing in the silver market. Spencer Patton, investment officer for Steel Vine Investments, forecasted that the silver futures contract on COMEX would dip to $38 by the end of September.

Moreover, silver’s performance could also be affected by the decline in the use of metal for industrial purposes like photography & silverware.

Again, some investors invest in silver because they desire a hedge against the risks of other assets. But whenever they relate silver to an unbalanced economy, its industrial relevance comes forth, making everyone realize its importance.

The European debt crisis is presently driving most investors in and out of their investment, whether gold, silver, equities or currencies.  Although European leaders’ meetings decide a feasible solution, the sway in governments attitude is not exactly creating a ‘safe haven’ image for silver.

There’s another issue hovering over silver, and that is the increasing supply of silver compared to other metals. For silver prices to continue strong, one needs to remember that the investment demand needs to remain strong.

As of present, the industrial demand for silver is going strong despite economic concerns. However, one must remember that silver will not always remain the ‘little brother’ of gold as both of them could traverse different paths. In future, silver prices may take a hit, whilst gold prices could reach the pinnacle of success.

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