Looking across the metals market, it is easy to be concerned that the high points may have been reached. After all, there are so many things in the present market that are at their zenith. Plus, after the sharp downturn in asset values over the last three years for many other asset classes – stocks, bonds, and real estate, for example – the last thing you want to do is get in at the top of the market.
However, if you are asking yourself whether there is room for upward movement on the silver price, the answer is yes. The current silver price may be going up, but it definitely has more room to rise. To prove the truth of this statement, it is only necessary to look at the price trajectory and the underlying demand factors for the metal.
Examining the price trajectory, you see a strong upward trend. Silver has been on a rising path for several years, and the recent quarters are no exception. You can look at the different price support points that have been tested on the charts and find a very comforting pattern of testing and support for ever increasing prices on the metal.
Compare this with the stock market and the difference is clear. Stocks have a very shallow trajectory. Though last year turned in a strong market performance, the market is still severely depressed from its highs of 2007 – 2008. The current uptick is not considered to have widespread support, and most daily trading moves in a very narrow band.
Next, you will want to look at the underlying demand factors that are driving the silver price. The metal itself is an asset class that is in high demand. Investors, collectors, and business groups all want to have a piece of the silver market. However, there are not enough pieces to satisfy demand for everyone who wants a share.
Thus, the demand for the metal exceeds the supply. This provides a very strong price support for the metal, and drives the momentum to create further upward movements for the silver price. It’s not all that crowded at the top for the metal in terms of upward limits. Collectors may drop out, but commercial groups are bound into paying higher prices because they need the metal for their goods. Therefore, it is apparent that the answer is an unequivocal affirmative: There is room for upward movement in the silver price.
