Why silver price is surging

Gold  |  2011-03-11 01:49:03   |   By

Overall, the fundamental outlook has favored large price rises in the metal. After the use of silver in photography was heavily lessened by the advent of digital photography, many thought that that was the end of silver, but its price continued to rise when gold rose and fall when gold fell.

The PRICE OF SILVER is hitting new 31-year highs at $36.55 today in a more vigorous performance than even gold, writes Julian Phillips at the Gold Forecaster.
Silver Price is running away with itself.
 Silver Bullion. Clearly a physical shortage of the metal has arisen. Why?
 Silver Investment demand, which is also thriving and should continue to do so.
 Gold Price rises. And yes, we may see a rapidly growing supply of silver from scrap or re-cycling sources in time, which may slow down demand in addition to rising supplies. But again, this will take some years still after which we will see a change in silver's price patterns.
 
 
 Silver Bullionin trust to back its shareholders stock. While New York's Comex derivatives market is not a physical market for silver (only 5% of the deals done there ever involve the movement of Silver Bars), the gradual drain of Comex silver inventories seen in recent months continues, leaving them at 4 year lows. Total dealer inventory is now 1,311.35 tonnes, and total customer inventory is now at 1,887.40 tonnes, giving a combined total of 3,198.97 tonnes.
 Silver Investment is proving a more than credible alternative to gold. The price of silver has, this century, followed that of gold. It falls further and rises higher than the Gold Price, but goes up when gold does and falls when gold does. We believe it will continue doing so for the foreseeable future. 
 Silver Price continues to move with the price of gold, not because they have the same demand and supply fundamentals or there is the same quantity of the metal available, but because investors and users perceive that the silver andGold Prices reflect the state of the current global monetary system. Such coordinated movements are saying that both metals are not being priced themselves. They are both pricing the monetary system and its prospects, as they have done for millennia. The huge growth of the investment side of the two metals is confirmatory evidence of this.