After reaching an historic high in 2011, the price of silver has dropped. In a matter of months, the price went from around $50 an ounce to almost half that in December 2011. This silver price drop creates the perfect opportunity for silver investors. Smaller investors should follow large investors’ lead and invest continuously as long as the silver price remains low.
Silver investors should not try to wait it out and see when the silver price hits bottom. No one knows when or where the bottom will be, so it is best to continuously invest as long as silver is low. The price of silver could suddenly jump at any time, leaving the investor who waited too long without the opportunity to buy inexpensive silver.
Investors can rest assured that silver will always have an intrinsic value. The recent price drops were the result of a bubble in the silver market. Bubbles always burst and prices drop before returning to a more reasonable level. In the last decade, silver has made steady, sustainable gains. Because of its uses in electronics and growing Asian markets, industrial demand for silver will increase with time. Also, the recent silver price dip has caused a silver purchasing frenzy. India has seen an enormous growth in demand for silver. Indian companies purchased hundreds of silver coins at a time to give as holiday bonuses to employees. Jewelers have pushed silver as a less expensive precious metal.
This increase in demand has caused many experts to believe that there will be a silver supply crunch. Because it is a metal, there is a finite supply of silver in the world. As demand increases and silver mining cannot produce enough ‘new’ silver to supply demand, prices will rise. The supply shortage could begin at any time, causing the silver price dip to reverse rapidly. This is a reason why investors should continuously invest while prices remain low — prices could rise unexpectedly at any time. Experts speculate that, if silver drops even a few more dollars an ounce, the price of silver could jump back over $50 an ounce in a matter of weeks. This would be because of a physical supply crunch. Everyone would rush to buy inexpensive silver, causing a shortage. The shortage would cause a drastic price jump. An investor who tried to wait it out could wake up in the morning to find silver prices had jumped $10. This individual would have wasted the opportunity of a lifetime by being too nervous to invest or hoping to catch the ultimate bottom of the silver price drop.
Successful investors known the secret that it is best to invest continuously in a silver price drop. Small investors get nervous and hold back, which is what separates them from the successful investors. By investing continuously in a slump, an investor can become part of the buying trend that will eventually lead the silver price to turn around. Since rising silver prices mean profits for those who invested in the slump, investing now is a great way for investors to contribute to their own future success.
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