The Grey Precious Metal – Silver Prices Likely to Continue to Soar Further in 2016!

Various factors are affecting the silver prices in commodity trading, investment, jewellery and industry. The year 2016 has seen a continuous uptrend in this grey precious metal price.  The silver prices soared by 27% in the first four months of this year.

Due to its versatile metallurgical properties, silver is very widely used in industries. Keith Neumeyer CEO, of First Majestic (second-biggest silver producer in Mexico), says, “Silver is not a precious metal, it’s a strategic metal, silver is the most electrically conductive material on the planet other than gold, and gold is too expensive to use in circuit boards, solar panels, electric cars. As we electrify the planet, we require more and more silver. There’s no substitute for it.” Due to its antibacterial and reflective properties, it is beneficial in new areas such as hospital paints and Band-Aids to windows of the buildings. Its demand in industrial applications is on the continuous rise. In the year, 2015 half of the world’s silver consumption was for manufacturing mobile phones, flat-panel TVs, solar panels and alloys and solders. With renewable energy gaining, tremendous importance across the globe and solar power is preferred over others, silver demand in the industry will be on the continuous rise and hence the prices too.

With the volatile global economic scenario, the investment in precious metals is considered safe rather than in the stock market. Gold is very costly compared to silver and is not within the easy reach of people for investment. Demand for buying physical silver is also consistently increasing in 2016 due to its “haven” appeal. It’s a type of investment wherein the investor is assured of definite returns if or at least the investment will remain safe during the highly volatile or fluctuating economic situation in the market as the silver prices have come out of the five-year slump it faced and are not likely to look back. “The demand for American Eagles silver coins skyrocketed in 2016”, U.S. Mint reports.

Another precise reason for rising silver prices is a demand-supply formula. Not only in the industrial sector but the ornamental market, silver has seen a huge resurgence. The days where only Gold jewellery was considered fashionable are gone. Exceptional are the countries like India. Such a rising demand on all fronts on the one hand and the other hand the silver mining is decreasing. According to the experts’ reports, the silver production will be 784.8 million ounces in 2016, which is 2.4% less than the earlier year. In contrast, the demand, including jewellery, electronics, and solar panels, will rise 1.6 % to 889.7 million ounces.

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