Silver Prices Surge in 2016 – Opportunity or Risk

Silver, Gold Bars
The precious metal silver prices have increased by leaps and bounds since the beginning of the year 2016. It has shot up by almost 50% and has reversed the losses of investors for the last 3 years. Can this grey metal go further high?… is the question amongst the many. This year the prices on silver have shot up almost one third in a month’s time. Speculations say the prices would definitely touch or cross $30/ounce by the end of 2016.

At the same time the investors, especially the smaller ones need to be cautious before entering into the trade for short gains. The present volatile situations across the globe, such as low interest rates, failure of assured income bonds by various governments, Brexit has helped the price rise of these two precious metals – gold and silver.

Over and above silver has its own appeal as a commodity in the industry. The usage of silver is widespread in the electronics as well as solar power industry. With the awareness of global warming and the boom in renewable energy sector, the solar energy has become an inevitable part of renewable energy sector across the globe and the dependency on it is increasing day by day. “When you consider the millions and millions of photovoltaic cells that are being made around the world, there’s obviously a big demand for silver,” says Peter Strachan of StockAnalysis.

It should also be seen that if one looks at the silver price trend over the last 15 years, the moving average has been always showing an uptrend. Though the fact is after the tremendous surge in the year 2011 it showed down trend in last three years up to end 2015.

Very highly respected metals and mining analyst John Embry in his latest interview says, “Silver is now performing more positively, despite the best efforts of the usual suspects to suppress the price. The absolutely spectacular performance of silver mining equities so far this year tells the real story. I firmly believe we are on the cusp of an explosion in the silver price that will ultimately see silver trade at many multiples of the current $20 prices (new all-time highs). And if the hyperinflation occurs, which I believe is inevitable due to the current global monetary policy, who knows how high the price can go?”

But since silver has a low liquidity rate versus gold, all the speculations about its prices may come at a slower speed than anticipated.

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