The price of silver seldom reacts as one predicts. Historically, the silver price increases when inflation rises. On the 14th of December 2021, the US House voted to raise the US debt ceiling by $2.5 trillion.
The raising of the debt ceiling will fuel inflation. China is also printing money to stimulate its economy. With the two major economic powers in the world racing towards an inflationary abyss, one expects that the price of silver will rise.
Not so, the silver price is firmly in a downward spiral. One expects that the price of silver will rise since production costs will increase in the future. Strangely enough, mining costs do not affect the price of silver.
Although industry uses 60% of the silver produced worldwide, it is not a commodity that is consumed. There are many tonnes of silver bullion reserves in storage above ground. When the production of silver is, the supply of silver does not disappear.
When the production costs rise, mines tend to work more economically. Miners will close unproductive mines and focus on more productive mining methods when profit margins are lower. It causes production to fall and will balance the demand and supply in the market.
When the silver price is higher, mining companies invest in better methods to extract silver. The mines then operate deeper and lower-quality ores. It means that the production costs increase. The mining production increase to cope with the demand in the world.
Is this a good time to buy silver? Yes, if you buy silver at a low price such as now, you are entering the silver market at a low. Due to current inflation scares, some analysts predict that the long-term outlook for silver is quite bullish.
If you want to buy silver, many dealers are reputable and have a good track record. Buying silver coins or silver bars has never been easier. You can research the dealers online and compare the prices that they offer.
If you want to buy silver, dealers will not hesitate to sell you the popular silver bars and coins from their inventory. Some of the most popular silver coins that dealers stock are the Philharmonic, British Silver Britannia, Kangaroo’s, Canadian Silver Maple Leaf.
Silver dealers will also sell you silver bars. Silver bars minted or poured by well-known or brand name companies. This includes brands such as the Perth Mint, ABC Bullion and PAMP.
It is also possible to buy silver from refineries, or pawn shops. However, they process could be quite tedious and the stock range will not be as rewarding as going to see a proper gold bullion dealer.
Many analysts predict that a market boom will take place as the effect of money printing raises inflation to unprecedented levels. There are also concerns about the high unemployment rates worldwide and the stagnation of the economy.
The long-term outlook for a better silver price in the first quarter of next year seems to be very plausible. If you believe “a bird in the hand is worth two in the bush,” now is the time get in before it’s too late.