Reason 1 : In recent years, the price of silver has become a lot cheaper than that of its historical brother, gold. In the past, the silver:gold price ratio was 15:1 or 16:1, but now (as of 2013) it is an amazing 60:1!
Although the price of silver was even lower in January 2003, with the ratio being an even lower 75:1 (with silver being at $4.89/oz. and gold at $368/oz.), the ratio has since again risen yet has also remained at a steady constant ever since. This makes silver one of the most undervalued precious metals in the world.
With it being incredibly cheap right now, you can understand why it is a more worthwhile investment in silver than gold!
Reason 2 : The demand for silver is amazingly high. For around 12 years, the growing demand has been gradually outstripping the world’s available supply – although people are recycling their old silverwares and scrap, and although mines are producing the metal in large amounts to add to the supply, the world’s industries are still consuming it at a breakneck pace.
Analysts believe that the world has already used up all the silver that has been mined in the last two millennia. The yearly demand for silver is up to and slowly surpassing 810 million ounces, but the supply per year is only at 650 million ounces, meaning that there’s a shortage/deficit of between 150 million to 200 million ounces.
Thus, because of this growing gulf between supply and demand, we believe that the rates of silver is going to skyrocket in the near future.
Reason 3 : There is a lot more gold in the global gold reserves than there is silver in the global silver reserves – 150 million ounces of silver against 4000 million ounces of gold.
Reason 4 : Did you know that there are only a few dedicated silver mines in the world? Much of the world’s silver supply is the result of it being a fortunate by-product of gold and copper mines, or lead and zinc mining operations.
Because of this, it’ll take more than just a small price hike for exclusive silver mining to become more widespread.
Reason 5 : Silver is a critical component in many, many electronic devices – it’s in huge demand for entertainment industry electronics, such as computers and televisions; it’s in huge demand in Hollywood, for photography usage; it’s in high demand in the medical industry, for it has a lot of critical uses.
The set demand and the set supply will not change the fundamentals: to rebalance the supply, a drastic rise in the price per ounce will be needed.
Reason 6 : In the last two decades, many famous millionaires and billionaires have stashed away a lot of investment in silver for future. Warren Buffet, for example, bought 135 million ounces in 1997. Because of this purchase, anyone who desired to mimic his example was and still is unable to do so, as there is now a lot less silver around to be purchased at COMEX and other, smaller silver reserves.
Another example would be George Soros – he owns a large slice of the Apex Silver (SIL) reserve pie.
Another is Bill Gates – he owns over 10% of the Pan-American Silver (PAAS) fund.
Reason 7 : At the moment, the gold market is being artificially suppressed by a large amount of paper futures contracts. When this is resolved, gold prices will dramatically increase, taking silver prices along for the ride. The silver market has even more paper contracts than the gold – the investors holding such contracts will most likely be forced to either buy the silver, as per their contracts’ specifications, or go bankrupt, if and when the price of silver rockets off.
Either way, this would likely cause the price to rise very quickly. If the investors holding the contracts default on them, then it would be a signal flare to every buyer out there that the severe silver shortage would be a fruitful opportunity for investment.
A good way to buy and hold silver is to simply purchase junk bars.
A few investment councillors advise that taking physical ownership of your silver bars is much better and safer than trading silver “on paper” – investment banks are sadly known for not always maintaining accurate records of their current inventories. By keeping your investments safe by your own hand, you’re not relying on a second-party that could fail.