The price of silver rose by 27 percent last year, and several indicators point to continued strength:
- Limited supplies. Mining companies largely neglected silver in the past few years, as prices stagnated. Even though today’s higher prices will generate more exploration, it may take 10 years before any newly-discovered silver comes to the market.
- Increased demand India, China, and many oil-rich countries have long histories of using silver as a store of value. The richer those nations become, the more demand for silver coins, bars, etc.
- Industrial use For years, reduced use of silver in photographic film has dampened prices. Now, though, more uses of silver are emerging, especially in electronics.
- New vehicle. The U.S. Securities and Exchange Commission has just approved a listing of an exchange-traded fund (ETF) that will buy silver. When this ETF begins to trade, perhaps later this year, there will be even more investor interest in silver.
For now, you can buy silver coins or bars yourself. Alternatively, you can invest in Central Fund of Canada, a fund that holds both silver and gold bullion, which is available on the American Stock Exchange.