For people who have an attachment to investing in silver, $50 is the new magic number. Getting the price of silver over this level would meet an important psychological marker for many investors and would likely be quite a thrilling day in the commodities market, if it happens anytime soon. At some point, it’s likely that silver will hit over $50 an ounce, simply because of inflation. The commodities markets aren’t lotteries and, when you set an arbitrary number and feel disappointed that your commodity hasn’t reached it, you’re missing the point of investing.
Thinking Like an Investor
Silver is a metal that is very important in many different manufacturing processes. The metal is among the precious metals, of course, but it’s common enough that it can be used in silverware, electronics and similar products. It’s not nearly as expensive as gold and, in some ways, it’s more desirable for some manufacturing processes. If you start thinking like an investor instead of like a lottery participant, you can see that there are definitely non-random influences on the price of silver.
If industrial demand increases enough and the value of currency continues to weaken, there will almost certainly be a time when silver will hit over the $50 an ounce mark. The real question people are asking when they wonder about this is whether or not silver will ever become worth more than $50 in today’s dollars. Perhaps, perhaps not is the best answer one can give, and the most honest one.
The economy has shown signs of slow but steady growth over the past few years. More importantly than that, it has also shown signs of stabilization. As people have more money to spend, they will usually start buying more consumer goods. This means that manufacturing picks up and that, of course, means that there’s more demand for silver. Conversely, things remain somewhat shaky economically, which drives many people to precious metals. Perhaps it will actually economic uncertainty that might push silver over the $50 per ounce mark.
Silver, as of the first week of 2012, is trading at around $30 per ounce. Compared to just ten years ago, that number is huge. In fact, 10 years ago, the $30 mark was a significant psychological marker for many people.
Silver is one of the most exciting markets to watch. The fact that so many forces play into the price of silver make it particularly interesting to study.
Tags: $50 an ounce, price of silver
