Silver price outlook very positive in August 2012

What is the outlook for the silver price in the near future? There is not one single answer on the question, so let’s have a look at the answer from different angles.

First, in the light of the most recent evolution, we see the silver price is outperforming the gold price. That’s a logic price movement, but we saw an inverse price evolution during the past months. If the current price movement can hold, it favors a better price evolution of the silver price.

Second, the past months were difficult for both gold and silver. “What hasn’t silver done much recently?”  The same question was asked to James Turk from GoldMoney. This is the answer from James Turk: “Silver does not appear to have done much recently because its price has been in a sideways trading range for 3 months. But the markets are always telling us something, even when prices go sideways. In the case of silver, the market is telling us that a big base is being built. Bases like these usually result in big rallies, which is what I am expecting for silver. It is subtle, but the rally I believe has already begun. The low in silver was $26.12 on June 28. Silver has been in an uptrend since then.”

Third, looking into silver’s fundamental value in the future, we find a clue in the most recent interview with Stephen Leeb on King World News. Mr Leeb describes the bright outlook for silver as far as it’s industrial value in the energy sector is concerned. He thinks that silver will even replace water in photovoltaics. He concludes by stating that “Silver has two drivers going forward.  One is the monetary aspect because silver is money.  But the other is the industrial component, and the demand for silver to cultivate energy is going to skyrocket.  Later on, people will not believe you could buy silver in the $20s.  It’s a gift right now at $29.”

Silver price outlook is bright. The price action in 2012 and today’s price movements are supporting this thesis. If the industrial usage of silver plays out as expected, silver will outperform gold.


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