Silver investment prices staying low despite high investor demand
Silver investment is gaining ground as Wall Street continues to be flooded with uncertainty this week. Many wholesale silver dealers are saying they have no silver bullion to ship.
Dividend.com is asking why silver and gold prices are not higher than they are. There certainly seems to be a huge demand for physical silver and gold right now, but very little supply.
“The first thing we always tell investors is that the market is the best indicator (in the short-term, at least) for where prices should be. Over the long term, however, markets tend to change course to reflect demand.”
-Dividend.com
With the silver price at around $12.60 per ounce at the time of this writing, it is far below this year’s high of $20.79 back in March. Silver investment bullion suppliers are currently charging a premium for their orders, if they have anything in stock.
But why aren’t precious metals going through the roof?
One reason may be that there isn’t as much of a shortage of silver as it appears. While there aren’t currently any silver bars or rounds to be had, this does not necessarily mean there isn’t any silver in the country (or the world). If you are a silver miner, you can’t simply sell a truck load of silver to a mint and have the problem solved instantly. The mint still has to make the silver bars and coins, and that can take weeks.
While people take their money out of the stock market and choose a silver investment strategy with real, physical silver, there will be a shortage of this silver for a short time. However, the spot price of silver is not affected greatly by this surge, as the vast majority of silver in the world is non-investment silver.
Within a few weeks, silver will again be available, and may be in overabundance as delivery of new bars reaches the market, and cautious investors begin selling their physical silver again. The silver investment market will then be flooded with physical silver, but for the same reasons, the spot price will not crash as a result.
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