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Silver prices happen to be steadily increasing over the past few years. The cost of silver has grown about 84% this year and then up another 20% in 2011. Based on analysts, the value of precious metals continues to rise later on. If you're planning on investing on coins, then you should do it now before the prices get too high. The more you wait, the smaller the profits you get from purchasing silver. If you do not believe that the price of silver is only going to continue to increase in the future, look at this list of some of the reasons why the cost of silver is continuously rising.
Reasons Why Silver Costs are Rising
For decades, central banks happen to be selling their reserves of silver in order to meet excess demand. It has kept silver prices low for many years but it also made mining unprofitable. As a result, now there is a shortage of the mined capacity of silver developing over the next two to four years.
Most of the mined silver is consumed for industrial purposes. Therefore, the majority of the mined silver is consumed quickly rather than being stored. Silver is really a previous metal which has a store value quality similar to gold, but it is used as an industrial metal. This provides it a useful value in growing industries for example chemicals, computers, and mobile phones.
Since The second world war, america government has sold over 5 billion ounces of the precious metal. The U.S. government currently has no reported silver in storage.
The above-ground available stores of gold have by 600% since 1980, as the above-ground available stores of silver have decreased by 90% since 1980.
Silver costs are also rising because starting and operating a mine costs a lot of money. A significant silver mine needs requires about tens of millions of dollars (in some cases it might need 100 million dollars) in capital to get started. It takes about Three to five years for a single silver mine to produce a tremendous amount of silver.
Most of the mined silver didn't come from silver mines. It's found while mining for other minerals like zinc, lead, copper, and gold. Therefore, silver isn't the focus of new investments in the mining sector. Only 30% of mined silver originates from silver mines. They are not many since there are few places that can sustain silver mining.
Silver has hundreds of industrial uses in the current modern economy. IT is used in water filtration, wound care, health care, solar power, mirrored glass, DVDs, cell phones, smartphones, tablet computers, and computers. It's also used like a catalyst for chemical reactions to be able to produce products for example plastics.
Silver may be the preferred metal through the average investor once the prices of gold are more than $1000 per ounce. When gold prices become higher, silver turns into a good replacement for investment for gold because of its less expensive and it is similar qualities.
