Investors have been flocking to precious metals such as gold and silver as the value of paper currencies has declined. The euro is incredibly weak right now and the U.S. dollar appears to be on the verge of a major collapse. In fact, the entire financial system is highly unstable right now. In such an environment, investors seek some place safe to park their money, and right now gold and silver are seen as safe harbors.....
One reason which I can think of is that...according to geologists there is approximately 17.5 times as much silver in the crust of the earth as there is gold. But today the price of an ounce of gold is about 30 times higher than the price of an ounce of silver.
That would seem to indicate that the price of silver still has a lot of room to grow relative to the price of gold...
This is all driven by demand and supply. Till now gold prices were rising but there is a limit to which they can rise. Now more and more people are turning towards silver as it was cheap till few days back. With dollar weakening and instability in the stocks, silver was considered better bet....
Economic uncertainty, decline in value of paper currency are some of the reasons for the raise in gold and silver prices.
Simple prediction you can make on day to day basis whether the precious metal price would increase or decrease.
> If share market increase similarly the precious metal price will decrease on particular day.
> If share market decrease similarly the precious metal price will increase on particular day.
Here when you look the price of silver compare to the price of gold, investment in silver has given good returns.
Over the last five years, silver has given a return of over 240%. Similarly, if you had bought silver worth Rs 100 a year ago, it would now be worth more than Rs 200. In contrast, gold has given a return of 150% over five years and 25% over the last 12 months