Silver Could Break $50 within Three Years


". . .the introduction of silver ETFs helped spur the demand for silver."

Silver has the potential to break its previous highs of around US$50 within the next three years, and at current levels it looks totally undervalued, Lakeshore Trading precious metals analyst David Levenstein said on Thursday.

"For this reason, I suggest every single investor should own some silver," said Levenstein.

As investors in South Africa are now allowed to own bullion, Levenstein recommends that they use part of their funds to acquire some silver bullion bars.

"For whatever reason, most investors in South Africa are totally clueless when it comes to silver," noted Levenstein.

Although gold has made new historic highs when it traded at over $1,200 per ounce, silver hardly got going.

"This is extremely surprising especially when considering that demand has exceeded supply for the last 10 years. This deficit in supply will erode above the ground supplies, which are already much lower than they were when silver traded at $50 in 1980," said Levenstein.

While gold and silver are both monetary metals, what makes silver more interesting is its many industrial applications.

"I believe that the introduction of silver exchange traded funds (ETFs) helped spur the demand for silver. While I always recommend that clients hold some physical silver bullion, certain investors find the ETFs a convenient way to invest in silver. But for me, there is nothing like owning your own silver bars," said Levenstein.

In 2009, the U.S. Mint sold almost 30 million one-ounce silver American Eagles, and already in January and February of 2010 sales are just over 6 million. In 2008, around 19 million of these coins were sold in the entire year.

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