Analysing silver prices is more complicated than gold. Although the silver metal tends to follow the same course as its illustrious sibling, the white metal tends to swing from lower lows and higher highs than the yellow metal.
The specifics of the silver market are not as well-known as gold either, primarily because silver analysis is conducted through the performance of gold and thus prices are forecast on figures based on the mirror market. Timing and the extent of price shifts also affect the value of silver.
If you are considering investing in silver, you want to be assured you will make a profit as the margins are much smaller than gold. Prices for silver are a lot lower than the yellow metal, currently hovering around $21 an ounce. It is therefore easily accessible to the average investor although premiums are higher.
In 2013, the British government introduced capital gains tax levies on silver purchases for UK residents make investments look less attractive – but silver has a good history of recovering well – especially in times of an economic and geopolitical crisis.
Volatile silver market
The precious metals market is volatile, and silver has more swings than a children’s playground. The main reason for that is because investment banks do not invest in gold for storage, but to make quick gains. Silver is not considered “money” in the same way as gold so traders look at it short-term rather than long-term.
However, to play that game you need huge sums of money to invest. For the casual investor, looking at long/term silver is the only way to make substantial profits – and historical charts show there is plenty of profit to be made from silver bullion.
The last significant rally for silver saw prices increase from $10.80 an ounce in November 2008 to $40.92 in September 2011. Another economic collapse like the 2008 banking crisis will see silver prices rise sharply again – and there is not one analyst who does not predict another financial collapse is imminent!
When to buy silver
Because silver is so affordable it is a safe purchase the majority of the time – except of course when prices have spiked dramatically. With current prices expected to reach $22 an ounce now is a good time to buy. However, silver prices are forecast to slip this year so you may decide to wait until the value falls below $20.
That is presuming analysts have got their predictions right. Since the turn of the year silver prices have held firm due to fears the global economy is not recovering as quickly as initially thought. And now the Ukraine-Russia conflict has escalated into the deployment of troops traders will stay with precious metals for security.
Silver prices are not going to slip just yet and will continue to rise –perhaps for another three months or more. As a safety measure silver looks a secure investment right now – but prices could be even more attractive once tensions in the Crimea peninsula has died down.