From January this year silver prices were rising with a steep curve and were expected to continue to do so for a longer time or at least keep on rising. But post-July 2016, the prices of white metal have experienced tremendous volatility.
And recently the markets have seen a continuous decline. This has put the small investors really in affix and dilemma. These investors are also worried as for whether the prices are doomed to decline for a longer time.
The first half of the year 2016 was not only proved good for the precious metals (silver, gold) but also the miner companies had a great time on the stock market globally, helping many of them to wipe off their debts and come out of the red. This particular phenomenon had many reasons contributing to it. In early January 2016, the Chinese market crashed very badly also they devalued their currency, Yuan, which caused a lot of concern globally. Global economic cues were also making investors refraining themselves from investing in the markets. When such things happen investors automatically turn to what is called as ‘safe heaven investments’ (investment in precious metals), due to fear of losing the value of their money. This scenario helped silver skyrocketing its prices as the demand surged unexpectedly.
But post-July the situation started changing dramatically on the global economic front. Conditions in the United States, China, Japan, Europe and the UK all were improving. Also, the economy of fast-growing countries like India showed up trends. The stiff stimulus efforts around the world taken by developed and developing countries are further expected to generate economic growth.
The effect immediately showed on the global markets and started showing incredible improvements, causing investors to get attracted again and their appetite for percentage returns and risk increased. The investors started selling their precious metal investments to liquidate the cash so as to enable them to invest in the stock market. Also, the demand for physical silver for investment dipped, all this consequently caused the price of silver to take a dive.
But as per the experts, the prices are not going down but correcting and if one knows the bear and bull markets this was very much expected to happen. Only thing is it coincided with the uptrend of the economies. The good thing about silver is that it may temporarily lose its “worth”, but will never lose value. Investors will immediately turn to silver and other precious metals again and again when they want to invest for the long term. This necessarily means that current low rates are not as worrisome.