by Amber Zhai
Industrial demand for silver has always been high due to the use of the metal in electronic gadgets, medical applications, satellites, weapons systems, etc. Now, however, investment demand for silver seems to be heading toward a sharp increase in years to come as well.
While silver’s natural abundance in comparison with gold below ground is typically estimated to be 9 ounces of silver per 1 ounce of gold, the recent trading ratio of silver to gold is almost seven times higher, 62 to 1, making silver remarkably cheap right now.
The Economic Phenomenon
Not only is silver’s low price remarkable, it’s contradictory. It seems to defy the golden supply and demand rule of economics that dictates that with increase of supply, there comes a decrease in demand, and vice versa.
However, the opposite seems to be true in this case.
This year, Apple experienced a production delay for its 21.5-inch iMacs perhaps due to a shortage of silver in China. The U.S. Mint also reported record sales in their silver Eagles, selling over 6.4 million in January alone, more than any other month since the coin’s introduction in 1986.
Meanwhile, it is averaged that for every 1 million ounces of silver mined, 1.5 million ounces are being consumed. Mine production can’t keep up with worldwide demand; rather, scrap supply and urban mining are more and more heavily relied on to meet the demand.
So considering the shortage in supply, the high industrial demand, and the rise in investment demand for physical silver, the price of silver should theoretically be performing better—but it has not yet reached expected levels. However, this might pave way for an extremely bullish market for silver in years to come and cement silver as an even more solid long-term investment than its traditionally entrusted gold counterpart.
Take Advantage of Demand and Sell Your Silver
While the market may be in a relative state of flux, you can always get top dollar for your unwanted silver jewelry, watches, and coins at Cash for Silver USA! To find out how easy the process is, visit CashforSilverUSA.com today.
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