Since the economic recession began in late 2007, investors have sought various methods for diversifying their financial portfolios. Precious metals such as silver and gold have become primary diversification assets. These days, many investors are banking on rising silver prices due to global economic recovery and further industrialization in emerging economic countries such as China and India. While precious metals may be used less as hedge investments, many investment analysts believe that people will continue to buy silver bullion as the white metal’s supply and demand ratio widens.
Unlike gold, silver is a widely used industrial metal. For this reason, its value is supported by both investment and industrial demand. As the global economy recovers, emerging economic powers purchase more silver, and the industrial sector finds new ways to use the precious metal, the value of silver is expected to move onto a steeper upward trajectory in 2012. Industries around the world will continue to find innovative ways to use the versatile metal and consumer demand is expected to rise considerably in the coming years. Currently, 51% of the silver demand comes from industry.
Since 1999, silver producers have boosted the output of the metal by 33 percent. However, this increase still does not meet the current silver demand. Just this past year, 667 million ounces of the precious metal were produced. This fell short of the demand, which was 986 million ounces. This discrepancy has caused the silver price to remain bullish.
As consumers gain more spending power, the demand on silver will rise considerably. As a result, the pull to buy silver bullion is also on the rise. Commodity analysts predict that industrial demand for silver will increase by 36% in the next five years. At the same, silver bullion bars will also experience a tremendous increase in value.
Individuals who buy silver bullion will find that transactions are simplified by working with a well-established precious metals dealer. Such dealers will offer hallmarked bullion bars and will ensure that each bar is certified for its weight and purity. The most common bullion bars come in 100-ounce or 1,000-ounce sizes, and are made of pure .999 fine silver.
The combination of investment and industrial demand for silver is sure to support the value of the precious metal for many months and years. The staying power of silver has many investors confident in diversifying their financial portfolios with the white metal.