Silver - Two Sides of the Story

Source:

...the main driving force for silver prices will be investment demand! It seems even Gold Fields Minerals Services (GFMS), which compiles the study, agrees with us...If one considers that the main silver ETF holds almost two hundred million ounces of silver out of a possible five hundred million ounces, we can see investment demand is strong and getting stronger...

What drives the price of silver? Certainly it is a function of buying and selling pressure, and primarily, this price setting mechanism takes place on the COMEX. However, so much has been written recently about short selling, price management, and naked sales, and on and on, that I wanted to take a more basic look at demand. Real demand and investment demand, regardless of how the price is set, fall into two main categories. We have investment demand (monetary demand), and we have industrial demand. In this year’s World Silver Survey 2008, sponsored by the Silver Institute, under the Investment Chapter it states, “Investor activity was the main driver of the high and volatile silver price in 2007.”

Ah ha! Just as always maintained by me (and others), the main driving force for silver prices will be investment demand! It seems even Gold Fields Minerals Services (GFMS), which compiles the study, agrees with us.

If one considers that the main silver ETF holds almost two hundred million ounces of silver out of a possible five hundred million ounces, we can see investment demand is strong and getting stronger...

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe