Silver has long been overlooked by many investors. However, though 2011 was a volatile year, more investors are now paying attention to silver, given that it has grown in value by 150% over the last three years, outperforming even gold. Added to this statistic the fact that demand for silver is set to increase, its price is predicted by many analysts to continue rising at a significant rate throughout the rest of 2012.
Why silver prices will rise in 2012
The precious metal surged 8% in January. The Global X Silver Miners ETF (SIL) is up around 19% in 2012. Commodity Online has reported that demand for silver will exceed supply levels this year. They go on to speculate that silver could reach record levels in 2012. Similarly to gold, silver´s price is predicted to rise due to some of the same factors, namely low U.S. interest rates until 2014, China´s relentless bulk-buying of silver for monetary and industrial use, and political unrest in the Middle East and North Africa. Silver is a tangible asset which attracts investment as more investors are losing their trust in paper assets. Some analysts believe that this is a change that is merely beginning. With considerable rises in food and oil prices, tangible-asset investment looks set to increase.
Silver stocks to consider investing in
With Greece´s parliament passing the new austerity measures bill, the country will not default on their debt repayments. This should calm the markets once more after the losses recorded on Friday 10th February. Investors will no longer need to worry about thew possibility of a Greek default. This will likely be reflected in the stock market this week. The iShares Silver Trust (SLV) closed 1.19% down on it´s last day of trade. Coeur d´Alene Mines Corp. (CDE) fell significantly, by 2.2% on Friday though it will likely recover after Greece announced the passing through parliament of their austerity measures bill. Despite the shockwaves felt in global markets on Friday over Greece, Pan American Silver Corp. (PAAS) still closed on a minor rise of 0.08%. Silver Wheaton Corp. (SLW) was down 0.28% while First Majestic (AG). recorded a loss of 1.09%. Silvercorp Metals Inc. (SVM) closed on a loss of 5.91%. Silver Wheaton´s stock has tripled in five years and is tipped to be a strong performer for the rest of the year. What´s more they pay their shareholders a quarterly dividend. In particular Pan American and Silver Wheaton are looking good for 2012.
Predicted by some commentators, February will probably see silver floating around $33 to $34. However, it will likely begin to rise in March if it can break through the $35 mark. 2012 could see silver make huge gains. Many commentators such as Aaron Kutchinsky are imploring investors to put their money in silver stocks claiming that silver prices could "reach for the sky".
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.