December 30, 2011 – Despite the recent dip in prices, gold is still the best performing asset of 2011, up 9.9 percent, but you may want to consider purchasing some silver along with your gold in the coming year. The fundamentals of the market show the Bull Run will continue, possibly with a kick up in prices after the New Year when all those bankers get their bonuses. As the days drift into 2012, more and more sources are reporting about the critical industrial need for silver and how it will positively affect the price.
Silver is an industrial metal. In addition to being a monetary metal, as is gold, silver is a vital component in electronics from your cell phone to computers to cars. The silver that goes into most electronics is never recovered. The silver that gets minted, and the US Mint has been selling out of Silver Eagles for a few years in a row now, typically doesn’t resurface for use in industry. This leaves quite a demand gap for industrial silver for use in machinery, electronics, and advances of the modern world.
The developed nations, specifically China, have produced a stir in silver because they are such big markets. China accounts for three quarters of the world’s gold market. China used to be a net exporter of silver, but it is now a net importer of silver and will continue to be through 2012. Talk of China’s economy slowing may be accurate and may not be. Analysts seem almost split down the middle. But China’s economy is so massive that even a considerable slowdown would produce enough demand for silver to propel the price higher.
Interestingly, renewable energy technologies rely very heavily on the industrial use of silver. Silver is a vital component in solar cell technology, which continues to gain ground going forward. Rapid-rising Asian economies with an eye to the future are diversifying their energy consumption strategies to include the renewable energies and that will, in time, exponentially increase the demand for above-ground, usable silver.
Recent price dips aside for the time being, the future of the precious metals is looking very good. Considering the technologies we’re now seeing in the process of definitely coming to market, silver may even outperform gold and it is strongly advisable, based on the macroeconomic trends alone, to own some silver with your gold.
Senior Staff Writer – GoldSilver.org