As with any commodity, silver prices can fluctuate rapidly. I am going to what has been the best silver rates of the year so far for silver and what is predicted for the rest of 2016. So let’s take a look at silver prices in 2016.
Silver has been one of the stars of the commodity rally in 2016, with prices increasing 0.55%. With the gains already made in silver prices in 2016, the prospect of prices going up further seems likely.
Let's take a look at some figures here. At the beginning of January prices were sitting at 13.98 an ounce and in April 2016, silver prices surged to a 10-month high, hitting the $17 per ounce mark. At the beginning of July, silver was trading at $20.12 and is expected to continue climbing in 2016 to over $22 per ounce, which would mean another 8% gain on current levels.
Silver in Industrial Use
People often forget about silver's important as an industrial metal as much as it is important for its use in jewelry. Half the world’s demand for silver is for industrial use.
Silver prices in history have fluctuated greatly. Silver was in massive demand before the 2008 financial crisis, as global manufacturing was booming. Everything from water purification, electronics, medical technology, and glass among others things use silver. Solar energy uses silver as one of its major components in photovoltaics. Solar accounted for a mere 1.4% demand for silver a decade ago. Today it accounts for over 13% of industrial silver demand.
The solar industry has rapidly expanded. China accounts for half of the world’s use of solar paneling while Chile already has 29 solar farms with another 15 planned. This means that the demand will for silver will soar.
Demand for Silver Coins
The growing demand for silver coins looks like it is going to be robust and will help silver prices to be driven even higher. In 2015, 12% of physical demand was due to 130 million ounces of silver coins being sold. Even with rapidly rising silver prices in 2016, you will see that it is an attractive investment as it is still significantly less than the price of gold, giving investors more potential. For years, silver was on the decline, but in 2016, it has hit an 11-month high.
The fact is, investors want precious metals. Silver prices in 2016 are attracting more average investors due to its price point compared to gold, which is the, well, gold standard in safe haven investment. The US alone has an insatiable demand for silver coins.
Click here to check prices for the most in-demand silver coins.
Decline of Silver Production
Due to production levels being projected to fall, the huge demand for silver will continue to rise. 2002 was the last time that there has been a reduction in global silver production. With prices being what they are in silver production, there is very little incentive for producers to expand their operations. Because of this, silver mine productions are expected to decline until about 2019.
If you look at the shrinking supply of silver, upward pressure will be put on silver prices in 2016. High demand and slower production was the cause of the third annual silver deficit in 2015.
Brexit had a huge impact, causing increased anxiety over the stability of the EU and the UK. As precious metals are considered a safe investment, you will see more investors turning to silver and the price can only be expected to rise.
Junk Silver Prices
Even though it is called junk silver most definitely is not junk. This can be a nice little nest egg that you have tucked away for a rainy day or any time when money is needed urgently.
Junk silver is U.S. quarters, dimes and half dollars minted before 1964 are made up of 90% silver and 10% copper. These coins are valued for the bullion silver and tend not to have any collectable value.
Junk silver is sold in bags with a face value of $100 which holds 1000 dimes, 400 quarters, or 200 half dollars. If you look at recent prices of around $20 per ounce, a $100 bag brings in around $1530 at today’s junk silver prices–a very nice profit indeed.
To put this into perspective, a person who invested in a $100 bag 9 years ago would have paid $312. With junk silver prices today, the bag would be worth five times what was originally paid–about $1650.
Junk silver should be a part of an investor’s portfolio, but as with anything, be sure to do your research and find a good dealer who can help you. You will surely profit from this.
Silver Prices in History
As with any commodity, prices can fluctuate rapidly. Silver is no different.
The 1950’s and 1960’s saw a huge rise in demand for silver fabrication due to rebuilding after WWII, as well as housing construction and electrification. March 27th, 1980 saw the worst crash ever with the silver price collapsing 64% in one session alone. Moving forward to 2000, silver prices were under pressure due to the widening gap between the supply and demand of the 1990’s. From 2011 until the present day, we have seen record silver prices related to record demands for metals, coins, and physical bullion bars.
The rising prices in silver may also be driven by Chinese investors trading on the Shanghai Stock Exchange. The demand for silver jewelry in the U.S. rose with over 60% of jewelers averaging an increase of 15% in sales. This is due to rise even more because jewelry is seen as a safe investment. With silver prices being much cheaper than gold, it is view as being more achievable by investors.
So what does the rest of 2016 hold for silver prices? We may see junk silver becoming even more popular, a downturn in mining and production, and the use of more solar energy pushing prices further up.
As an investment, you should definitely consider putting your money into silver. With junk silver being a major player in the precious metal stakes, it would be beneficial to add this to your investment portfolio as well.
But as with any venture, it is wise and prudent to get your bearings first and do your due diligence before jumping in. If you're looking for something more advanced, here's a webinar by wealth adviser Minesh Bhindi in which he shares some valuable techniques in investing in precious metals and cash-flowing them for annual returns of up to 26.4%. The button below lets you sign up for that webinar for free.