For well over 2,500 years, silver has been recognized as a holding of substantial value. The Lydians (present day Turkey) were one of the earliest makers of silver currency, a bas relief coinage which differed markedly from the bronze and copper coins that the Chinese had been using years earlier. Fast-forward two-millennia, and we find ourselves still loving that lustrous precious metal.
In July 2015, the U.S. Mint sold out of silver bullion coins.The high demand for silver is simply a derivation of low spot price and the (potential) upside of buying bullion in bulk. It’s also important to note the value of silver futures. Now trading at $14.65 an ounce, spot value is higher than what futures are predicting. CME data suggests that October futures will be trading about $0.10 lower than current market value. For large investors, this fractional difference screams ‘opportunity’ from the rooftops. There’s a big upside to selling now and buying again in a few months. Taking advantage of the current-spot-versus-futures situation would ultimately lead to an increase in the futures value.
But not all of us are large investors with cash flow ad infinitum. For the small investor, the answer is simple: buy more silver, and soon. I say this as an investor and also a student of the market. With prices of silver reaching affordable lows and demand for the precious metal reaching unfathomable highs, it seems that an increase in price is right around the corner. We have to remember that the large corporate investors play a pivotal role in market prices. When the supply is struggling to match the increasing demand, there has to be a squeeze coming. This means that in order to combat the excessive buying, the price of silver will soar in an attempt to manage the supply needed on a day to day basis.
History has told us that a decline in price is proportional to a decline in demand for precious metals. This is due to individuals and corporations not wanting to wait for (potentially) decades to see a significant upside. However, investors as a whole seem to be taking note of the global financial issues as well as the stock market circus. Stemming from uncertainties in Greece and its effect on the Euro, as well as the recent roller-coaster ride on Wall Street, precious metals are a sign of consistency. Silver is the lighthouse in rough seas, shining a clear ‘buy’ message!