Thursday, March 8, 2012

Silver long vs silver short

So far this year silver has risen 20 percent. This has outperformed gold and platinum and investor interest in silver is increasing in many ways.

According to the Silver Institutes recent press release, "Globally, silver-based exchange-traded-funds (ETFs) account for 586 million ounces (Moz) of silver, up from 576 Moz at the end of 2011. Demand for physical silver bars is also strong. According to several precious metals dealers silver bar sales continue to be brisk."

Investor demand for silver on the commodities exchanges around the world continue to be strong and net silver long positions, the difference between total long positions and total short positions, continue to steadily increase showing a much more confident bullish attitude to buying silver for investment.

Silver investors are also looking at accumulating coins, such as silver eagles and maple leafs for example as an easy way to build up a silver stock over a period of time.

According to "The Future of Silver Industrial Demand," a report commissioned by the Silver Institute and released last March, silver industrial demand is expected to grow by 36 percent to 666 Moz from 2010 through 2015 and silver industrial demand continues to "…remains positive primarily because of the lack of substitution and the wide range of established and ever-growing new uses of silver that are vital to industry."

It is very likely then that even if the occasional shorting of the price of silver, occurs, a practice employed by a few bank, it will only be a temporary halt to the onward and forward march of the price of silver.

By trend the silverprice is showing increasing stability as a result of demand. There will be the occasional hiccup and it would be a mistake to check the silver price on a day by day basis. Look at the trend as that will tell the real story and demonstrate the logic of buying silver on a regular basis.

Silver may be considered as the poor man's gold by some but it can potentially make those 'poor men' well placed in the wealth stakes over time.

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