Monday, 5 August 2013

How I See the Silver Market

People have been fascinated by silver for thousands of years. Civilizations from long ago found silver deposits on or near the surface of the earth. Many relics from these civilizations including religious artifacts, and jewelry have been documented over the years. Mesopotamian merchants used silver as a bartering tool early as 700 B.C.

In 1792, silver became a key part of the United States monetary system. Congress based the currency on the silver dollar. Silver was used for the nation's coinage until 1965. Silver became an important industrial raw material early in the 20th century, as the industrial revolution was really moving forward.

In today's modern world, silver is used as a valuable and practical industrial commodity. It is also an appealing precious metal for investment purposes. Silver is relatively scarce, but it is still the most plentiful and least expensive of the precious metals.

Silver demand is based on three main areas: industrial uses, photography, jewelry, and silverware. This represents more than 95% of the annual silver consumption.

Fundamentally, there is a declining supply and increasing demand. Around 90% of all the silver that has ever been mined, has been consumed by various global industries. Industrial demand has been outstripping supply for 20 years or more. Ground supply is currently as historical low levels. The U.S. government stockpile of silver is all, but gone. Sales from other major countries, such as China, Russia, and India are declining also.
There are very few pure silver mines remaining. Most of them have depleting reserves. There is almost no chance that significant mine supply, will depress the price of silver as it continues to rise. There appears to be a powerfully bullish outlook for silver.

As of this writing, silver is priced at about $18.50 an ounce. Technically, silver is in a major uptrend in price. On a monthly chart, silver could drop in price to just over $12.00 an ounce, and still keep its major uptrend intact. On a weekly chart, silver could drop to just under $17.00 an ounce, and keep its uptrend intact. On a daily chart, silver has been in a downtrend channel since early June. This is a normal price correction in a major uptrend. The monthly and weekly charts give you a long term view, which is used to analyze long term trends, or major trends. For long term traders, the daily chart can be used for timing purposes, such as entry and exit of a position.

Fundamentally and technically, silver looks very strong. Silver is quite unique, because its both a monetary and industrial metal. Gold is a good buy, but I believe silver has the most potential in coming years. There is a good chance that silver could be valued well over $50.00 an ounce in the next few years. It could go up double, or even triple that level. The silver train could well be the ride of a lifetime in the next few years. I plan to be aboard this great opportunity.

Gary E Kerkow is the founder of This site provides information to help traders and investors become successful. Kerkow has over 20 years of trading experience including stocks, futures and options. He implements the strategies, methods, techniques, principles and psychology of the world's best traders and investors. This includes Jesse Livermore, William J O'Neil and others. Visit my website at

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