Another of my favourite commodities, and one that I trade frequently and also write about daily is silver, and you can follow my latest market forecasts for silver futures here. Silver is the great unsung commodity, often left in the shadows of its more precious cousin, gold, and yet in my view, silver offers a significantly better long term investment than gold, and is probably the most undervalued metal in the commodities market at present, and here’e why.
As I am sure you know, silver is classified as an industrial metal and not a precious metal like gold, and as such is now set to see demand increase dramatically over the next few years as world economies begin to emerge from the recent long and deep recession, with demand for the metal increasing as a result. Its industrial properties are well known – it is one of the best thermal and electrical conductors available, and is also an great sterilizer. However, in terms of gold which it has traditionally correlated with positively, it lags well behind in terms of performance. At present gold is trading at around $1200 per ounce, whilst silver currently trades at $18 per ounce, at a factor of 67. The 20 year range has seen this ratio swing from 100 in early 1993 to just over 40 in 1998, with the current ratio currently at the mid point. However, gold spiked higher in 2008, and the reason this is important is that in previous peaks for gold in both 1993 and 2003, the effect in silver was not seen until several years later. If history does repeat itself then we can expect to see spot silver prices and silver futures rise dramatically in the next few years, a trend that I have been forecasting for some time in my daily analysis for the commodity. Below is a chart of the latest spot silver prices and I look forward to welcoming you as one of my regular readers of my silver futures forecasts.
