Shaffer-Lienhard’s researches, conducted in February 2010 had various gold and silver predictions.
Kowloon, Hong Kong (WiredPRNews.com) To forecast spot silver prices for 2011 one needs to consider large economic trends, interest rates, gold prices, and international politics. With historical silver prices in 2010 oscillating between $15 and $30 per ounce, what could happen to future values of this industrial and precious metal in 2011?
2011 Price of Silver Forecast and Prediction
One of Shaffer-Lienhard’s researches, conducted in February 2010 had various gold and silver predictions. Over 7 months later the majority of the forecasts were fulfilled fairly accurately. The research estimated that the silver price forecast for 2011 would hover around $26.20 per ounce. A June revision boosted that number to $28 per ounce.
Factors Affecting the Price of Silver
Although silver does have some use as jewelry, its main use is in industrial applications. Silver has high conductivity, the ability to withstand very hot temperatures along with anti-bacterial properties. Because of this and other attributes, silver is used in:
• Coating switches and buttons in electronics
• Circuit boards in computers
• Medical applications such as bandages
• Solar energy
• Soldering and brazing
Many investors prefer to hedge the market with the precious metal gold instead of silver. While silver does receive some sympathy investing when gold prices rise, it also receives a boost in value when industry picks up. Many analysts are anticipating the gradual return of a more robust economy in the coming year. As manufacturing and production increases, the demand for silver should go up as well. The increased demand may help the price of silver per ounce grow faster than gold in 2011 according to some futures commodity analysts.
How to Profit From Strong Silver Prices
There is a debate of which is more profitable: silver commodity futures or silver based stocks. When purchasing silver futures contracts for 2011, money is only made if the price of silver rises. In theory, one can still make earn profit when silver prices are falling if they are invested in a strong mining or production company. Regardless of which is more profitable, both methods should yield decent returns when the spot price of silver per ounce is rising. But how can money are made when the price is stable albeit high?
• One method would be to use this strategy with high implied volatility stocks in the silver sector.
• Another approach would be to use various options strategies found here.
Mathew Lundberg, head of the Shaffer-Lienhard research department, said: “While analysts purport many price ranges for various commodities, the investor should be cautious when actually allocating capital towards such advice. A cautious approach is often best. We expect silver to hover in the 40$ range towards the last quarter of 2011, and will have a conservative approach toward the silver market in the coming months.”
contact name: Vincent Cheng