Forecasting of silver, like gold, is done by comparing the current futures price of the commodity. Like gold, silver is somewhat dubious in that it can be both a currency and commodity.
Sound Money Campaign points out that because of silver’s dual role, investors should pay attention to all of the factors that influence its price. Those being the role that silver plays in industries such as healthcare, and high-tech.
It also includes political pressure such as the civil conflict in Iraq. Supply and demand also plays a role in the price of silver.
The Iraq Civil War
The civil war in Iraq is a conflict that will be rehashed in the political arena’s of the United States. It is another reason for the American leaders to focus their attention elsewhere instead of on the economy.
It is another ticket to a fight between left and right. What that means is that people will lose faith in the economic recovery and begin to buy hedge investments such as silver.
Gold is still priced too high for many investors, but silver fits the ticket nicely when you are considering a hedge against inflation.
Industry uses of Silver
Silver has always is in a hot spot in many industries, literally. Silver has a high melting point, and that makes it a great choice for circuits, solar, and transformers for electricity.
In the medical world, silver is used in wound care management. There is concern that the demand from industries such as healthcare may cause a shortage.
The Role of Silver
There is demand for silver despite political and economic problems. In current trading, silver is outperforming gold in terms of gain. Gold too is gaining, but that is due to the political and economic events of the world.
Silver is reacting to both the world political and economic problems and out of the need by industries that require silver to create products and technology.
In terms of economic recovery, silver plays two roles. One it is a safe-haven for investors, and it is also a metal that used to make a variety of products. Either way you weight it, there is demand.
The rule of a free market system says that when there is demand, price will rise. From July to August, the demand for silver has risen by 13%.
When you compare that to the price structure of gold, you begin to see that silver is out-distancing gold.Gold weighed in with a 6% gain. Silver outperformed Gold by a 7% rise in price gains.
What does this mean?
It means that silver is tied to many sources that are both positive and negative. This weeks posting of national economic data shows a lot of disappointments. The US economy shrank by nearly 3%.
The Job outlook continues to be shaky. This is offset by the fact that Silver is in demand in industrial settings.
Where does that leave investors? Silver still seems like a good bet. It has more to offer right now than other precious metals because of its dual demand.
