Analysts look for the price of the white metal to rise to between $14.50 and $24 by the end of next year's first quarter. December gold has rallied already from a 2008 low last month of $739.80 to a Oct. 10 peak of $936.30. Silver could soon follow that trend. This is especially the case since above-ground silver inventories are less than in gold, says Jon Nadler, analyst with Kitco Bullion Dealers.
"Even though we didn't have a significant gain in the last two weeks of total chaos, it could still happen," Nadler says, noting that silver historically was viewed as currency before gold.
Silver lagged in the past month, since it relies on demand, unlike a monetary asset, says Bart Melek, BMO Capital Markets commodity strategist. Uses include jewelry, dentistry, electronics and more. "Those will be impacted by the slowdown globally in manufacturing and consumer spending," Melek adds.
When the economy turns around, it should add luster to silver by increasing industrial demand, analysts say. Furthermore, newer uses for silver are replacing lost photography demand. Silver conducts electricity at lower heat loads than other metals, and is used in laptops, cell phones and iPhones.
One sign of investment is that holdings in iShares Silver Trust (ticker: SLV), an exchange-traded fund, hit 200 million ounces for the first time in July, and were up to 220 million on Thursday. Since many types of coins and bars are hard to obtain, Christian says, some haven-seekers "buy the ETF instead."
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